What is the (refi) appraiser trying to do with me here? (IL-Chicago)

So I bought a building in April 2020 (put in the offer before the lockdown, got it accepted after). When I purchased it, 2 units were leased, the top floor was empty. Both those tenants are happy to stick around and are still in place.

Since then, we’ve put a lot of money into the building – new appliances; all new kitchen in one of the unit; new roof, tuckpointing, new steel gate and replaced the broken concrete parking pad in back, all new electric, replaced the HVAC and added A/C, added rear porches (instead of just exit steps), remodeled baths, etc, and with rates even lower now, and a market that’s gone up, decided to refi.

Appraiser came out a few days before Xmas; while there provided him with (de-identified to protect tenant names) leases, list of improvements with money spent, and had our realtor pull comps including 2 literally within a 1 block radius; one of which happened to close the WEEK before the appraisal happened. Finally get report back 2 days ago and got a “subject to” the basement stove being removed – lender thinks its so that he doesn’t have to consider basement rent for comps. (We came out at the low end, two of the comps had the 1st floor duplexed down, and went considerably lower than the two that also had basement units listed (also in the same zoning class, very similar sizes).

I told the lender, listen, as far as I’m aware, the unit’s legal, but either way, I can’t take a stove out from a leased unit with a tenant in place. Based on area zoning (RS-4 for those in the Chicago), lot size, etc., 3 units would be fine; the unit 2 exits, adequate ceiling height, meets window size/ventilation requirements, etc. The building had violations when we bought it, and had a City building inspector out after repairs; he cleared them all (and took a pretty thorough look at the place inside and out). The unit’s rented to a HCV/Section 8 tenant through our housing authority; they just did their bi-annual inspection of the unit in November and passed it.

Either way, basement apartments (some legal, some not) are very common in the area, and frankly determining their legality is difficult in a lot of cases, unless there was a recent (permitted, obv.) rehab; they definitely play into the price someone is willing to pay.

Lender asked the appraiser for a revision to the existing report 2 days ago, the appraiser reached out to me today saying that “lender ordered a reinspection” and asking me to schedule. The lender says, no, we didn’t and we’d have had to charge you if we did, which we haven’t. Maybe reach out re: the revision we ask for.

I responded to the appraiser saying, lender says they didn’t want a reinspection just a revision; let me know what I can provide for documentation on the basement, from zoning, city/housing authority inspections, anything else if it’s helpful.

Appraiser says “OK can we talk,” and I say “sure,” then says something about being busy and asking for me to speak to his “business partner” instead of him.

I feel like something is going on here – this seems like a lot of work if they’re just looking for a reinspection fee (and by all measures they’re pretty busy these days anyways, so not sure why they’d need it).

It seems like my lender is as flummoxed as I am, and the realtor (who I’ve used on a couple of deals and really like for her experience, attitude, etc) is also like “yeah this is unusual.”

Anyone have any theory as to what could be going on here?

submitted by /u/coolerblue
[link] [comments]

So I bought a building in April 2020 (put in the offer before the lockdown, got it accepted after). When I purchased it, 2 units were leased, the top floor was empty. Both those tenants are happy to stick around and are still in place. Since then, we’ve put a lot of money into the building – new appliances; all new kitchen in one of the unit; new roof, tuckpointing, new steel gate and replaced the broken concrete parking pad in back, all new electric, replaced the HVAC and added A/C, added rear porches (instead of just exit steps), remodeled baths, etc, and with rates even lower now, and a market that’s gone up, decided to refi. Appraiser came out a few days before Xmas; while there provided him with (de-identified to protect tenant names) leases, list of improvements with money spent, and had our realtor pull comps including 2 literally within a 1 block radius; one of which happened to close the WEEK before the appraisal happened. Finally get report back 2 days ago and got a “subject to” the basement stove being removed – lender thinks its so that he doesn’t have to consider basement rent for comps. (We came out at the low end, two of the comps had the 1st floor duplexed down, and went considerably lower than the two that also had basement units listed (also in the same zoning class, very similar sizes). I told the lender, listen, as far as I’m aware, the unit’s legal, but either way, I can’t take a stove out from a leased unit with a tenant in place. Based on area zoning (RS-4 for those in the Chicago), lot size, etc., 3 units would be fine; the unit 2 exits, adequate ceiling height, meets window size/ventilation requirements, etc. The building had violations when we bought it, and had a City building inspector out after repairs; he cleared them all (and took a pretty thorough look at the place inside and out). The unit’s rented to a HCV/Section 8 tenant through our housing authority; they just did their bi-annual inspection of the unit in November and passed it. Either way, basement apartments (some legal, some not) are very common in the area, and frankly determining their legality is difficult in a lot of cases, unless there was a recent (permitted, obv.) rehab; they definitely play into the price someone is willing to pay. Lender asked the appraiser for a revision to the existing report 2 days ago, the appraiser reached out to me today saying that “lender ordered a reinspection” and asking me to schedule. The lender says, no, we didn’t and we’d have had to charge you if we did, which we haven’t. Maybe reach out re: the revision we ask for. I responded to the appraiser saying, lender says they didn’t want a reinspection just a revision; let me know what I can provide for documentation on the basement, from zoning, city/housing authority inspections, anything else if it’s helpful. Appraiser says “OK can we talk,” and I say “sure,” then says something about being busy and asking for me to speak to his “business partner” instead of him. I feel like something is going on here – this seems like a lot of work if they’re just looking for a reinspection fee (and by all measures they’re pretty busy these days anyways, so not sure why they’d need it). It seems like my lender is as flummoxed as I am, and the realtor (who I’ve used on a couple of deals and really like for her experience, attitude, etc) is also like “yeah this is unusual.” Anyone have any theory as to what could be going on here? submitted by /u/coolerblue [link] [comments]

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