Appraisal / bathroom re-do disaster?

Far as I know, if you're in the process of fixing it, it won't matter that much.   It would be the NOT fixing it that would have an effect on your value!  

Sewage.  ew. good luck!

Most refinance appraisals are virtual. Is there a house at the address? Is it the house we have on the books? What are other houses selling for?

It's not like they care about the wallpaper. If they do question the work, just be sure you have proper permits for it.

When I refi'd the appraiser barely got out of his truck. Took a few measurements along the front of the house and extrapolated from there. Never once went inside.

I just refi'd my house... Appraiser did a full walk-through, measured the whole house (including the rooms), walked the yard... I was actually quite amazed at how extensive the "inspection" was. Still, though, what mattered most was what was "going to be fixed", not the state it was in at the time.

Assuming they ordered an interior inspection appraisal, I'd say call the appraiser, explained what happened, and re-schedule. He/she probably has a deadline that needs to be met for his client so he/she needs to know asap what the status is so it can be relayed to the proper folks.

My opinion is based on the fact that I AM an appraiser.

Also I'm going to just mention for everyone's sake is that unless you're going to "fix" whatever's wrong within the next few weeks before you close, it doesn't matter to me if you're going to plate the walls and ceilings in 24K gold, it's worth today what it looks like today. The majority of lenders want an as-is value, not an "as-is when I get around to it, oh you know what I had this ironman thingy that got in the way I'll do it next summer maybe" value.

Case in point, when I first started out I appraised a property that had just been built. They had the header on the back of the house where they were going to build a deck, so I figured "Hey, it just got built, they haven't had time to get it put up there, I'll give them the benefit of the doubt." Imagine my surprise when, 18 months later I get a request to appraise it again and, no deck.

Well, there you go.  

That was my refinancing appraisal as well. Measured the length and width of the exterior of the house and asked if I had a finished basement in order to calculate rough square footage. Then he just took that number and plugged it into a spreadsheet on his laptop. Done.

I even invited him inside to look around, but he wasn't interested.

x2 - Also an appraiser.  If the appraiser is doing their job they need to provide an "as is" value to the lender.  Value has a time component.  For example, a property is worth X on a given date.  Typically that date is the date of inspection and the condition the property was in on that date, not what it might be at some point in the future when the repairs may or may not be complete.  

If the bank is aware of the fact there are ongoing projects they may request to have an "as complete" value in addition to the "as is" value.  My advice is to make your lender aware of the situation and allow them to provide guidance, as to what they need, to the appraiser.  That way the bank is not hit with a curve ball when the appraiser reports that there are repair issues.

FYI - Whether or not the appraiser goes in the house or not is determined by the scope of work that the bank or lender has given the appraiser.   The lender steers the whole process since they are the ones using the appraisal to make a decision about whether and how much to lend.

Edited by devilwillride 2010-06-18 9:40 AM

thanks Bripod... should I just call my bank too ? I've been emailing back and forth with a loan officer with paperwork. Tell her the scoop re: poop and then let her decide if the appraisal should go ahead? 

Definitely let the bank know.  Ultimately, everything is their call. 

Devilwillride answered that bank question about informing them of the disaster.

thanks peeps for all the answers! you guys rock!

Definitely talk to your loan officer before the appraiser comes out.  Fannie and Freddie specify if the appraiser needs to go in the house or not.  If they aren't coming in, no problem.  If they are coming in, potential problem.  If the appraiser documents that plumbing is out of commission it could be a deal killer.  Don't want to see you have the appraisal done and the refi not able to close as you will still have to pay for the appraisal.

PeterAK, Mortgage Guy
www.MortgageMKE.com

I know it was already answered but I'll X2/X3 whatever to let the lender (loan officer) know what you're doing so that they can configure the loan accordingly. I hate it when I get to a house and they've got half the thing gutted to the studs and the homeowner tells me, "Oh we're re-financing so we can finish this." Well, if the lender doesn't know about it he's going to be ticked when I call him and tell him the thing's hardly worth much in its current state. Most lenders (at least in my experience) don't like to fool around with doing a "subject-to" appraisal where it's assumed the repairs will be completed at a later date. I'm sure rate locks/fluctuating interest rates, and the difficulty finding an investment vehicle for subject-to appraisals all contribute to the significant percentage of lenders who want only an as-is value. It doesn't sound like you have a huge project going on (in terms of significant remodeling throughout the home) so likely they'll just suggest that you re-schedule for next week or whenever you think you'll be done in the near future.

As for the people who had someone come out and measure the exterior but not go inside - I've never ever done that. If someone orders a "drive-by" (form 2055) appraisal, I literally drive by the house, stop in front and take a front photo (and side photos if they're unobstructed), a street photo, take some notes about the exterior materials and overall condition as apparent from the exterior condition, and drive back to my office. If I'm measuring the house, it's because I'm coming inside in a few minutes to do the rest of the inspection. So maybe it's a different type of appraisal that I'm not familiar with, but I would advise everyone who has an appraisal done that doesn't think the scope of the inspection was appropriate, to let the lender know so they can react accordingly. If these appraisers were supposed to go inside the property (because it was a 1004 appraisal) and they didn't, they've committed fraud because they sign a certification stating what they have done and have not done. If they only had to do a drive-by but for some reason got out and measured the property, then my guess is that the dimensions weren't available through public sources.

P.S. Good luck on your bathroom remodel! Hope you can get the water issue fixed, we had water in our basement this spring and it was the biggest pain evarrrr.

thanks guys.. The appraiser said call the bank and the bank said call the appraiser! HA! Anyhow, it's left that I'll contact the appraiser early next week once the 'gaping holes' are filled in and reschedule. Basically it comes down to not having to do a 2nd appraisal. 
The thing is that the bank is not refinancing the redo so I may have to ask the workers to hold up on further work til the guy gets thru the house. What a sticky situation eh?!  

Funny! If I were the appraiser I would have said "Okay, I'll let the bank know and just give me a call whenever you're ready for me to come out." Then I tell the bank what's up and they usually say "Okay we'll put the order on hold so it doesn't affect your turn-around time."

I want to make sure you're aware that if you went from having a basement bathroom or finished basement area, to having a basement bathroom that's torn apart or otherwise unfinished (no floor covering, wall covering, etc) then it will affect your basement finish square footage and may impact the appraised value. It all depends on what the typical buyer "expects" in that neighborhood, so if all the recent sales have a basement bath and yours doesn't (or is unfinished therefore the appraiser can't attribute much, if any, value to it), your value gets nicked. Just something to think about.