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VA Foreclosure Appraisal & MOLD

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I went back there. I knew I saw several places where the advertisers were trying to sell people ozone generators to deal with mold spores. That site is a jungle of BS, when you click on the sponsor links. Here's a sample: "Ozone Bacterial and Mold Killing Studies Many people want to see the proof that ozone can actually kill bacteria and mold. Here we provide studies that have proven ozone does indeed kill these patogens in air and water. Click Here, or scroll below to view the test results proving ozone kills bacteria, mold, and viruses. Mold-Kill is currently in the process of obtaining independent test results to provide proof of the bacterial killing qualities of ozone. While any company can commission a local lab to perform a test for a few hundred dollars, the question is, are the test results truly credible? To provide test results that have real meaning, Mold-Kill provides results from sources that are independent, and completely credible, unlike many of our competitors."
 
Point is, VA will not allow an appraiser to check the inspection box. I am not a mold exper either, and don't play one on the forum. However, I did and still do suggest to Damon that to comply with VA's requirements that he simply state that the cost to cure will likely exceed $5,000. Then VA can do what they want, and the appraiser has followed VA requirements.
 
Thanks Don, I agree with you. I do think that is what the VA would want.
 
All VA really wants you to do is to report they see at the subject and make a decision on how it impacts the final opinion of value.
 
Tom McDowell said:
All VA really wants you to do is to report they see at the subject and make a decision on how it impacts the final opinion of value.
Click to expand...

I'm sure Don is quite familiar with VA SOP. However, the point you raise (effect on value) still has me puzzled. Mold mitigation bids run all over the place, depending upon which "expert's" arguments one buys. Therefore, nailing down effect on MV is like nailing down jello, unless the cost to cure can be reliably identified. Even then, there may be stigma to account for, assuming the remediation is disclosed to potential buyers in a timely manner.
 
Yes, how does one make an adjustment for the presence of mold in the Subject improvements--given an "as is" opinion of value--if one lacks awareness of the cost to cure? I'm asking because I don't have the answer.

The appraiser would be very fortunate indeed to find three sold "comps" that all had mold problems similar to the Subject.
 
That is what I am trying to find now.. possible comparables with mold or other extreme issues when sold that could be used to verify both the stigma and market reaction to such issues. I think it may be reliable to give a range of estimated cost to cure based on what has been stated in this post. Who knows how extensive the mold is behind the sheetrock, etc?

I could state that I am not an expert nor trained in mold issues and that I recommend a mold company be contacted if a more exact cost to cure is needed. However, if I use a cost to cure of say $10,000 and the actual cost is $20,000, that would be a major difference. This major difference would extremely alter the appraised value.
 
Try this

"Based on the appraisers consultation with his peers, and peer groups, the appraiser has reached the conclusion that he cannot accurately estimate a cost to cure or the effect on value based on the likely presence of mold, and remediation of the suspected mold condition. And, based on the advice from The Appraisal Foundation, as contained in Advisory Opinion 9, the appraiser has formed an opinion of market value by use of the Hypothetical Condition that no contamination exist. This hypothetical condition is likely contrary to what actually exist but is supposed for the purpose of analysis. The appraiser is not an expert in environmental hazards and conditions as stated in Certification #5. of this appraisal report form".

That would be the way I would handle this. Others may have different ideas. But, you cannot place a mantle of responsibility on someone lacking the expertise to do something they are not qualified to do.
 
Damon Pedersen said:
That is what I am trying to find now.. possible comparables with mold or other extreme issues when sold that could be used to verify both the stigma and market reaction to such issues. I think it may be reliable to give a range of estimated cost to cure based on what has been stated in this post. Who knows how extensive the mold is behind the sheetrock, etc?

I could state that I am not an expert nor trained in mold issues and that I recommend a mold company be contacted if a more exact cost to cure is needed. However, if I use a cost to cure of say $10,000 and the actual cost is $20,000, that would be a major difference. This major difference would extremely alter the appraised value.
Click to expand...

Be careful here. How can you assess the severity of mold in comps? There is a big difference between a bit of mold as a result of a slow leak under a sink, and a mold project like the one I posted in the video (if you have not seen this go to: http://www.youtube.com/watch?v=dHgzAoEKXYk )

When it comes to valuation and defects, the impact on value can be expressed as a cost to cure matter or market matter. In most cases with defects there is some continuity between cost to cure and impact on market value. With mold remediation there is no predicting where estimates will come in. Additionally, it is difficult to predict the impact on market value due to stigmatization. The question begs: what extent of mold contamination results in X dollars of reduced demand in the market? This may or may not be related to cost to cure.

Being in both the appraisal business and environmental science business, I see more mold projects and strange human reactions than you can imagine. When approaching mold as a mold assessor, I am always acutely aware of and sensitive toward market valuation since I am also an appraiser. I can tell you that some mold remediators will use market value as a scare tactic to motivate building owners to buy expensive and unneeded treatments. There is much fraud in the mold industry. This is one reason it is imperative to not base cost to cure on a single remediation estimate.

Bottom line, stay away from making precise valuation conclusions in response to mold unless you feel comfortable discussing the logic behind your estimates in court while being questioned by an attorney. Unless you have quite a bit of experience in mold related projects, you would probably not believe what can happen in these cases and how people might hang on every word you say related to mold. If you think you have had scrutiny from loan underwriters, you have not even begun to scratch the surface of scrutiny compared to building owners affected by mold. I cannot emphasize this enough.

Regards.
 
Only slightly off point......If I had anything to do with mitigation of mold/water damage, I'd film the event with high quality lighting and equipment. I mean, every visual stage of the process.

Hopefully, if a cutting edge mitigation process is well documented to be performed as specified, stigma would be minimized. And, maybe you could sell the film to the owner:)
 
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