What would you do? Addition Issues.

Real Estate Appraiser with Tri-County Appraisal Group, Inc. 1201069512


Here is the situation......

I received an order, set up an appt. go out to the property and...... Addition in progress!  The lender and the home owner failed to mention this. (FYI this is after a 45 minute drive, and a heck of a time looking up homes of that size in the area)

When I pulled up to the house, you can just see major construction going on.  They basically turned the old garage into a great room, added a Den, a 2nd foyer, 2nd bath, laundry room, pantry, a mud room and finally a 4 car garage in the rear (attached).  The house's total sq ft is 3445, with about 1500 sq ft being the new addition (w/o the new 4 car attached garage of course).

I immediately contact the lender and explain the situation, and they make it seem like they knew about it and its no big deal (so of course I assume the only logical thing which is the borrower may be getting a home equity type loan for improvements)  So I proceed with my work, get back to the office and send them the report  with it being "subject to completion".  I immediately get a call back from the lender saying what the heck is this?  I explain, and they were of course shocked to see all the work being done (I attached about 20 pictures). 

The next day, I literally received about 20 phone calls for this property, telling me to take out the "subject to" and make it "AS IS".  Of course I refused, so now they want me to remove the great room from the sq ft.  FYI, the great room is the only addition to the house that was standing before this started and it is the only part of the addition that is nearly completed (everything else is just 2 X 4's and plywood floors.)  I tried to explain that to the wizards working on this poor homeowners loan of 300K+, and they can't seem to understand that this house isn't anywhwere near completion.... it needs about another 40-50k to be finished, and the one part that they don't want me to include in my sketch is the only part that is 99% done! 

So.. I wanted to hear how other appraisers would handle this kind of a situation and if you would actually remove the "subject to" and make it "as is" for this lender (JPMorgan Chase).


Comments (2)

Sara Goodwin
Ashcroft & Associates - Portland, OR
Portland, Oregon Appraiser

Hi Moe -

I just had a similar situation last week.  After an hours drive I find that there is a renovation in process with no appliances, running water, etc in place -

I only gave the loan officer two options: cancel or subject to -

Have you determined what you're doing with this one yet? 


Mar 08, 2007 12:06 PM
Moe Farhat
Tri-County Appraisal Group, Inc. - Dearborn, MI


Hello Sara,

I've already submitted it "subject to", I'm sure they'll figure something out ;)  This went back and forth with them for a couple weeks and they finally gave up after 5 or so addendums that just kept making them look bad.  They were asking me to act like I didn't see the addition and remove it from my sketch.

Hey we did our job, at least we were nice enough to notify them of the issue before hand.  I hope you're at least charging a trip fee of some sort (if they decide to cancel).  Good luck with that, and keep me posted.

Mar 09, 2007 04:10 AM