Refi - bathroom under construction

oceangirlmeFebruary 18, 2010

Are appraisal requirements set by the industry or are they set per appraisal company?

We bought a house in Oct 2008. The place needed to be fully updated. It's not a gut job but we needed a new kitchen, 2 new bathrooms, remove the 1950 wallpaper, etc.

We were ready to refinance the house in June 2009 and the house appraised for $14k more than we paid for it. One bathroom was gutted to the studs and the kitchen had plywood as countertops. We were approved but ended up walking due to a 1/4 point rate hike among other things.

We are trying to refinance again. The kitchen is fine - it is finished except for some trim work and paint. The bathroom has drywall and a tub. We really weren't planning on finishing the bathroom anytime soon. I've been told that it's an industry standard and that we will not get financing from any company if we are under construction. I've been told that as long as we have a toilet and sink that looks like it will be hooked up we'll be fine. Unfortunately that means that we'll have to get the tile work done.

Should I keep calling mortgage companies or is the "no construction" an industry standard now? Thanks!

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There are set standards for the industry. The house is supposed to be appraised "as is" not based on what you hope it will look like one day.

Of course, individual companies and individual inspectors may or may not overlook certain items. You are more likely to find an inspector who will overlook the fact that your toilet isn't hooked up yet than you are to overlook the fact that your bathroom is nothing but 2x4's.

    Bookmark   February 19, 2010 at 8:34AM
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I haven't had an appraisal done in the last 5 years years BUT the last one the guy didn't even come into the house. He walked around the outside of the house. Counted windows, measured the exterior, counted doors and left.

That was BEFORE the banking industry took a big hit. These days my guess would be that they are a bit more diligent. The only way to find out is to ask.

    Bookmark   February 19, 2010 at 12:13PM
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I had my house appraised 5 years ago by Chase Bank. We were in the middle of rebuilding a sunroom. The room was almost finished except for the tile floor. Sheetrock, windows, skylights,everything was in and functional except the tile wasn't in yet.

The appraiser wouldn't look at the room. Wouldn't count it as square feet. I was furious and argued with him and the bank. Chase said that was the rules.

    Bookmark   February 22, 2010 at 12:20AM
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We recently re-fied and I was surprised that the bank required the appraiser to come inside the house; we've re-fied before, and I am pretty sure it was just a drive-by.

However, our appraiser didn't spend much time in the house, and only went into a couple of rooms. Maybe it was just so he could get an idea of the general quality of our flooring, trim, fixtures, etc - stuff that would affect our home value.

Our upstairs bathroom was a little torn up, as my husband was in the middle of replacing a shower valve, but the appraiser didn't go upstairs, so it never came up.

    Bookmark   February 22, 2010 at 9:09AM
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