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The standard HUD uniform residential appraisal report requires a cost to build estimate. I have never seen one without that estimate completed. However, I b
by ensignavenger 10y ago
The standard HUD uniform residential appraisal report requires a cost to build estimate. I have never seen one without that estimate completed. However, I bought a home last month which had 2 different appraisals done on it, and neither one had any weight given to the cost to build. (Despite the fact that the appraiser claims otherwise, I can mathematically prove that there was no weight given to that method.)
- intrasight 10y agoI can't imagine any scenario where cost to build would weight into appraisal.
- ensignavenger 10y agoIf the appraisal is being used to determine appropriate insurance coverage or even an insurance pay out; or possibly a court ordered payout if someone else were to destroy a property; then it would likely be the primary weight. But lenders generally don't care so much about the cost to build, so an appraisal ordered by a lender generally won't. That being said, my recent appraisal (I was financing the purchase) said "All 3 approaches to value considered with most weight placed on sales comparison approach." I could mathematically prove this statement false, as the cost to build had zero consideration on the value. I think it is mostly a canned statement. Maybe they have a different definition of the words "considered", and "most". :)
- sidlls 10y agoYes, but the estimate provided there is, in my experience at least, rarely computed rigorously. And even when it is, I've never seen it used as part of the appraisal.