I am doing a refinance appraisal. The house next door to the subject has allowed their wood side fence to deteriorate. (The owner says he is pretty sure that it is the neighbor's fence because the neighbor told him that he was going to repair it one of these days.)
Part of it is missing totally and the other part is collapsing into the subject yard. In addition to the fence problem, this same neighbor had an above ground pool that they installed inground and it is now totally trashed, empty, weeds growing out of it etc. Since there is no fence separating the two back yards, this is a safety hazard for the subject property.
How would you handle this? I think it has to be reported to the lender as it is a safety hazard. My thought is to report it under adverse site conditions but do I make the appraisal subject to a survey to determine who the fence really belongs to? Do I just report it and recommend that the owner install some type of fencing blocking access to the neighbor's yard?
Any Ideas?
There is no survey available to tell whose fence it really is. There are no ovbious building indications to determine whose it is as both front sections are tied onto the post in the same manner. The homeowner "thinks" it is his neighbor's fence. When I originally asked for advice, no one had any on the subject of whose fence is it really.
The condition of the fence, no matter who it belongs to, most assuredly is related to market value due to appeal. Maybe I'm wrong, but the subject location being next door to the dumpiest house on the block is certainly less attractive to a typical buyer.
Right or wrong, here is what I did.
I reported the condition of the fence.
I commented that I could not determine whose fence it was.
I commented that the homeowner was unsure whose fence it was.
I recommended that the client have a survey done if ownership of the fence was of concern.
My cost to cure consisted of a comparison price between the cost of a survey vs the cost of repairing the fence. (Very similar costs although if the fence is the homeowners' then the cost of a survey would be added to the cost of the repair.)
I commented on the appeal factor to a typical buyer if the fence is left in its current condition.
I gave them an as-is value and an as-repaired value.
Susan
I'm sure that there are other reasons for the value being 9K lower than "what is needed"
There were many other reasons for the price being lower than the 'needed value'. First of all I don't care what's needed. I would be happy as a clam if I never knew what was needed....ever...
The highest sale in the neighborhood (past year) sold 3 months ago for $92,500. It had the brick veneer pressure washed, new siding installed on the eaves & overhangs and new thermal replacement windows installed. The interior was completely repainted and all new floor coverings (carpet and ceramic tile) were installed. The apppliances (R&O MW DshW Dsp REF) and HVAC were all 1 year old. This house is located across the street and 2 houses down from the subject.
The subject house was 150 sq ft larger than the other house but has the same room count. It is brick veneer but eaves and overhangs and the interior haven't been painted since 1996. All floor coverings were removed and replaced with stick down square vinyl tiles (The same ugly tile in every single room.) It had single pane windows with storm windows original to the house (22 years). Appliances consisted of R&O (original to the house) REF which is 11 years old and a vent hood which was new. The HVAC was appx 11 years old. All of this is still in serviceable condition.
Now..... fence aside.... the subject has no chance of commanding top value in the market in its current condition. It is just one of many in similar condition, none of which approached the sales price of the house across the street.
All of this was in my report in detail. The client called 5 minutes after I sent the report. That is enough time to check his mail, download it, look at the value on the letter of transmittal and then call me. He didn't have time to read 1 darn word.
