Unfinished Bathroom

[Chase UW]

What is the best approach when a bathroom is not finished? All rough plumbing is completed and it is in need of surfaces and installation of the fixtures. Should this be included in the sales grid as a bathroom with a functional utility adjustment or not be included as a bathroom in the sales grid all together?

 

[Mark K]

Depends on the needs/wants of the client. It sounds like a closet today. In a week it could be a bathroom.

An appraiser could complete a report either way but if its for a mortgage transaction the client guidelines would dictate how it gets reported. It could be reported "as-is" (closet) or "subject to completion" based on a hypothetical condition that the bathroom exists.

 

[glenn walker]

Most lenders will require it to be completed unless the owner is getting a home improvement loan . BUT you cannot pretend it doesn't exist so I would include it in the bath count with a cost to cure estimate OR make the report Subject to the bathroom being completed. Either way most likely the lender is going to be sending you back out in a few weeks to complete a 1004D.

 

[Mark K]

BUT you cannot pretend it doesn't exist ....

Either way most likely the lender is going to be sending you back out in a few weeks to complete a 1004D.

Pretend what doesn't exist? Its a room with roughed-in plumbing, its not a bathroom, yet.

Also, I don't know if the OP is an appraiser; he's identified as "general public".

 

[hastalavista]

What is the best approach when a bathroom is not finished? All rough plumbing is completed and it is in need of surfaces and installation of the fixtures. Should this be included in the sales grid as a bathroom with a functional utility adjustment or not be included as a bathroom in the sales grid all together?

I think you need to describe the situation a little better in order to get a less generalized answer.

Is this an existing bathroom that is being renovated; a conversion of existing space to a bathroom; a new addition?
Is this one bathroom in a two-bath house?
Is this the hall bath or a en suite/master bath?
Are you the borrower or appraiser?
Is this for a mortgage finance appraisal or something else?

 

[Tom4value]

What is the best approach when a bathroom is not finished? All rough plumbing is completed and it is in need of surfaces and installation of the fixtures. Should this be included in the sales grid as a bathroom with a functional utility adjustment or not be included as a bathroom in the sales grid all together?

Client dictates what they want. You decide how to complete to not make a misleading report per USPAP. If it is the only bathroom, you also have a functional issue.

 

[Chase UW]

Pretend what doesn't exist? Its a room with roughed-in plumbing, its not a bathroom, yet.

Also, I don't know if the OP is an appraiser; he's identified as "general public".

How do I change this from "General Public?" I am a Mortgage Professional and have worked in the industry for over 30 years.

 

[Highlight17]

Client dictates what they want. You decide how to complete to not make a misleading report per USPAP. If it is the only bathroom, you also have a functional issue.

Yes and No. Presumably, the appraiser has been engaged to provide an opinion of "Market Value", therefore, how this is treated will flow from the Highest and Best Use analysis (i.e. is it curable or incurable). Otherwise, yes, what the others have indicated, i.e. either subject to, or do it as-if completed (if curable), then deduct for cost to cure.

 

[Mr Rex]

Yes and No. Presumably, the appraiser has been engaged to provide an opinion of "Market Value", therefore, how this is treated will flow from the Highest and Best Use analysis (i.e. is it curable or incurable). Otherwise, yes, what the others have indicated, i.e. either subject to, or do it as-if completed (if curable), then deduct for cost to cure.

I'd like you to walk through this a little more slowly. What is the difference between subject to and as if completed?

 

[Highlight17]

I'd like you to walk through this a little more slowly. What is the difference between subject to and as if completed?

Subject to, it basically places a condition on your value opinion (I am not a residential appraiser, but as I understand it, there is a box to check on the FNMA form for this, often used on value opinions which relate to proposed construction). 'As-If' would be a hypothetical premise which first assumes the bathroom is complete (presuming that such a scenario passes all 4 tests of highest and best use), then you deduct from that the cost to complete the bathroom which would result in an As-Is indication of value.