Update of appraisal after full interior inspection allowed 2 weeks later

[James Mable]

Hi, Have been doing mostly narative reports over the past 20+ years and have a new client (foreclosure attorney) who requires the form format only. Subject is a 3 family which I inspected about 3 weeks ago. I was able to get into the 1st and 3rd floor, but not the 2nd. Sent the appraisal based on the assumption the second floor was commensurate in condition with the others. Got a call last week from the listing broker who said you can get into the 2nd floor now as the tenant has left. Well I took a look and it is in far worse condition than I assumed (I know).. Time difference is roughly 2 weeks now.

With narratives I would just provide 1 page stating my adjustment in value.. However this client will not accept anything other than a form.. Forms are fairly new to me and wondering which one to use.. Looked quickly at 442 & 1004D, but they don't seem to apply.. Just looking to reduce my value $5,000+- range based on the interior condition.

Thanks for any input..

Jim

[Cynthia]

Jim

I'd say it would be great for a USPAP instructor to chime in here. It sounds to me like a new assignment and would treat it as such. I am guessing you disclosed in the original report that you could not access the 2nd floor and what assumptions you made to do the report. You now have a new scope of work so you have a new appraisal which would entail writing a new report and it would have a new inspection date.

[James Mable]

Thanks Cynthia, Yes, I stated in the old report that I could not get into the 2nd floor.. But from what I was told at the time the 2nd floor was not in that bad shape.. After the report was delivered, I was invited into the 2nd floor (2 weeks later) and it was a mess.. Years ago, I would just do an addendumn (as the property is close-by) stating my findings.. But now??? My new client would not want to pay for a new appraisal as this is a foreclosure and is worth much less than the mortgage.

The thing is when these go to court in Connecticut, we have to prepare an oath (no longer testimony in person unless contested) stating that the property has not changed in value (or has changed) since the time of inspection which could be several months... Because no one wants to pay for an update (as there is negative equity). I usualy insert something like " The value of the subject property would remain unchanged as of today's date or XYZ date providing the condition of the subject property is commensureate with my inspection on XYZ date, and no positive or negative influances have affected the subject property". Misleading... YES.. Am I going to do another appraisal without getting paid?? NO!!. Seems to have worked over the past several years..

As an aside, I usualy take at least a drive-by a day or so prior to going to court if the property is local.. But, No one wants to pay for a new appraisal, nor for an update unless the appraisal is older than 6 months (as the court will not accept)

Values change so quickly, But if the client is not willing to pay for an update.. and the court wants a value as of todays date... This is the only way I have found to satisfy the court.

Thanks for responding and looking forward to any input.

Jim