Bank appraisal with unfinished kitchen
Victoria Marie
2 years ago
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Comments (9)
bry911
2 years agolast modified: 2 years agoRelated Discussions
Appraisal issue..
Comments (10)No, no, no; don't feel the number is artificial. Appraisals are each a judgement call, depending on numerous unseeables, from the house design to future development in the neighborhood. No two people [appraisers] are going to see the same thing in the same way. They are *guessing* what the finished project will look like, how it will fit [or not fit] into the neighborhood, and whether or not it will actually be worth anything close to their guess once it's completed. All guesses, but supported by their experience with similar projects. As t-mac-mo indicates, what you really want is an appraiser with the knowledge and experience to understand the finished value of your project in your location. Remember the basics: the bank will lend you money only if it is sure that --should anything happen to you-- they will be able to get the money back and still make a profit. If you build a home that costs $500K to build, and when finished would normally be valued at $750K, but want to put it in a neighborhood of houses valued at $500K, I can assure you that no sensible banker is going to loan you more than $400K because he will not expect the finished house to sell for more than its neighbor. (It will, but not by much and not for its perceived actual value.) Now, in that circumstance, the appraiser may guess that the finished house would appraise for $550K -- slightly more than the neighbors, and a lot less than its value in a different neighborhood, and only slightly more than the expected cost... and the bank isn't going to lend $550K because they really, really, want to be sure they make a profit which [from their vieiwpoint] can probably be made if they loan $400K....See Moreappraiser's comps, determination?
Comments (13)We had nothing to lose (no out of pocket costs or anything) to have the bank request a review of the appraisal. We had to provide the bank with at least 3 additional comps in our neighborhood that sold in the last 6 months, ideally 3 months (I provided 5 or 6). We had to include in our letter, as completely as possible, any errors we found. Well, our appraisal evaluation came back (took about 1 month instead of the 3 days the first one took). He raised our valuation by 40,000. Which puts it to within 5000 of what I had told the bank I thought it was worth based on an appraisal from 2009. I am shocked, but very thankful. We will sign all our documents in the next week....See Moretips for getting a great appraisal
Comments (4)"what can or should i do to enhance what i have to get the best possible appraisal? " In short, nothing. The appraiser isn't going to care about clutter etc. They are going to go off of square footage, bedrooms, baths etc. They will make adjustments for anything that is obviously damaged/under construction though, so finish up any current projects before the appraisal....See MoreBuying an unfinished REO
Comments (14)sunshine, To be blunt but honest...most people buying REOs are experienced & can make their own value assessments. And those are the people a bank likes to work with. Holding a newbie's hand through the selling of an REO in today's market conditions isn't high on any loan officer's list of things to do today. They will...if forced to, however, so don't despair. Call a few local appraisers & see what their time frames are. If their fee is $350...offer $450 if they get it done in 3 days. It's business. You're going to have to play by the rules if you want to get anything done quickly. Lenders are keeping appraisers very busy today. And, yes, cash is king. But remember, it's only king if they have a choice. Are there other offers on the table for this property or are you the only game in town? If there aren't others lined up with cash to buy this REO a lender will gladly accept your loan contingency. The important thing to remember in purshasing REO is the bank's perspective which is to unload as much property as humanely possible in the quickest amount of time & try to stay within the established loan loss provisions. A few lenders, early in a down cycle, will try to hold out to not exceed those loan loss provisions but at this point in the game every lender in the country knows they've probably not reserved adequately & will make decisions accordingly. Your property's value is small. This REO is not going to make a dent in the bank's financial statement. They just want to get rid of it. Make that as easy as possible for them & you've got yourself a new house. /tricia...See Morehomechef59
2 years ago
littlebug zone 5 Missouri
2 years agobry911
2 years agolast modified: 2 years agoI don't think the bank cares about the unfinished kitchen. So far as I know homes are required to have a functional kitchen, which is refrigeration, cooking, and sanitation in order to qualify for a mortgage. You are not required to have finished kitchen and you can grab this from Ikea for $400 if you were.
What the bank may care about is if the home is finished as per the original agreement. If the plans submitted to the bank stated "unfinished kitchen" then the homeowner would generally only need the refrigerator, range, and sink. However, if the homeowner submitted plans for a full kitchen, even if the cost was not part of the original loan the bank may require the kitchen be completed to those submitted specifications, as the loan was conditional on completion.The appraisal will be adjusted, probably in a punitive way, and that is the bank's protection.
ETA: My first build had no kitchen cabinets when we moved in and it was financed. I built the cabinets after I built my shop...and just in case anyone is wondering, my wife would not approve that order of operations again.
elcieg
2 years agolast modified: 2 years agomaifleur03
2 years ago
PROJeffrey R. Grenz, General Contractor
2 years agobry911
2 years ago
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