Vacant or Tenant-occupied?

[Surf Cat]

Along with the original appraisal, was a 1007 ordered?

 

[Tom D]

If it was leased the effective date, then it is tenant occupied. Just because they haven't moved in does mean it's vacant. Now it's up to the underwriter to decided. Tenant occupied, you get 75% ltv, vacant 70%. If the lender and owner want to lie, let them. You can state on the report that at time of inspection the tenant had not moved in yet, with the lease start date. Typically, it's the underwriter who wants what they want to be done correctly. They can call you back for a re inspection. 1007 isn't always ordered on a refi rental.

 

[sputnam]

I completed a refinance for a single family home. It was fairly straight forward and I was accompanied by the owner during it. It was just remodeled and he told me a tenant would be moving in shortly, however it was vacant (no personal belongings, empty closets, etc) when I inspected it. I marked the occupancy box as vacant. I then received a very angry three way phone call from the owner calling me a liar and other names due to me marking the box as vacant, and the lender is now asking I market the box as tenant occupied while also providing a signed lease showing it was leased as of the effective date. This is a good client so I’d like to make this easy if possible. Can I reasonably chance the box to tenant occupied without a potentially misleading report? Or am I going to have to leave this as it is. Any help is appreciated. Thanks

The occupancy is whatever it was on the effective date of the appraisal. If you were provided with a copy of an executed lease then, it would be fine to call it tenant occupied. In that case, your report should include a summary of your review of the lease and should state that the tenant had not moved in as of the time of your site visit.

Altrnatively, you could check tenant and state that according to the property owner, the property was leased and the tenant would be moving in shortly.

It's an ant hill... not the Matterhorn.

 

[Fernando]

You can ask for a copy of the lease to see if it's legit. If lessee is not arms length and the dates not according to timeline, you can tell this is a farce.

 

[Surf Cat]

Jiminy Crickets.... at the time of inspection the property was "vacant".

The appraisal is a snapshot in time the day the appraiser visits the property. If the tenant has not yet physically moved in, it is vacant.

Tenant occupied, you get 75% ltv, vacant 70%

Not at the time of inspection.... it was vacant. No wonder they were yelling at the OP.

It's an ant hill... not the Matterhorn.

No....it's misleading.

I then received a very angry three way phone call from the owner calling me a liar and other names due to me marking the box as vacant, and the lender is now asking I market the box as tenant occupied while also providing a signed lease showing it was leased as of the effective date.

I find when someone starts yelling without explaining themselves in a civil manner, they're on the defensive which means they effed up. The borrower calling the OP a liar and other profanities means they really effed up.

Sending a bogus lease signed on the effective date when the owner could have provided that at the time of inspection is just desperate.

You have to look out for #1.... because everyone else has an ulterior motive.

 

[sputnam]

No....it's misleading.

It's not misleading if the appraiser does as I suggested. There is no regulation that requires the property owner to tell an appraiser the truth. There are regulations that require the appraisal to not be misleading. There is nothing misleading about reporting that the owner stated that the subject property was leased and that the tenant would be moving in soon and reporting that the appraiser was not provided with a copy of the lease agreement. USPAP does not hold appraisers responsible for information that is not available to them.

Sending a bogus lease signed on the effective date when the owner could have provided that at the time of inspection is just desperate.

No one posted anything about there being a 'bogus lease' however, if an owner did provide an appraiser with a bogus lease, it's not the appraiser's problem. It would be fraud on the part of the owner. Appraiser's aren't expected to be experts in detecting forgeries.

 

[J Grant]

I completed a refinance for a single family home. It was fairly straight forward and I was accompanied by the owner during it. It was just remodeled and he told me a tenant would be moving in shortly, however it was vacant (no personal belongings, empty closets, etc) when I inspected it. I marked the occupancy box as vacant. I then received a very angry three way phone call from the owner calling me a liar and other names due to me marking the box as vacant, and the lender is now asking I market the box as tenant occupied while also providing a signed lease showing it was leased as of the effective date. This is a good client so I’d like to make this easy if possible. Can I reasonably chance the box to tenant occupied without a potentially misleading report? Or am I going to have to leave this as it is. Any help is appreciated. Thanks

I asked AI, which said occupancy per Fannie, etc means physically occupied; even if the title has passed, if the owner is not physically living there , it is vacant. I assume the same applies to a lease. The question asked is: Is the property occupied? The question is not, is the property leased?

This is a sad situation. It could have been avoided, perhaps, if you had refused to speak to the owner after he/she called and referred them to contact their lender, who would consider any concerns they had.
Who was the third party on the call? Was it an individual loan officer? If so, they were violating policy about pressuring appraisers. When you said the lender is now asking you to mark the box as tenant-occupied, is that the client going through official channels such as their ordering portal/normal communication, or is it an individual loan officer demanding the change?

 

[Surf Cat]

I asked AI, which said occupancy per Fannie, etc means physically occupied; even if the title has passed, if the owner is not physically living there , it is vacant. I assume the same applies to a lease. The question asked is: Is the property occupied? The question is not, is the property leased?

This is a sad situation. It could have been avoided, perhaps, if you had refused to speak to the owner after he/she called and referred them to contact their lender, who would consider any concerns they had.
Who was the third party on the call? Was it an individual loan officer? If so, they were violating policy about pressuring appraisers. When you said the lender is now asking you to mark the box as tenant-occupied, is that the client going through official channels such as their ordering portal/normal communication, or is it an individual loan officer demanding the change?

J, I suspect since the OP hasn't come back, changed the occupancy from vacant to tenant occupied as he didn't want to rock the boat with this client and stop receiving orders.

 

[Bobby Bucks]

I’ve experienced this on several assignments. I comment on what I observed and what the lender states in the engagement letter. What box to check is up to the lender, they may be between tenants, an eviction, a family member may be moving in or out as a tenant, who knows. I have a USPAP police badge, but have never been given an occupancy police badge.

 

[Dublin ohio]

I asked AI, which said occupancy per Fannie, etc means physically occupied; even if the title has passed, if the owner is not physically living there , it is vacant. I assume the same applies to a lease. The question asked is: Is the property occupied? The question is not, is the property leased?

Exactly. Since it was a refi, sans the lease, would you call it owner occupied even if there was nobody living there as of the effective date