Property Valuation
When an appraiser reports value 'as is' versus 'as repaired,' the 'as repaired' value assumes:
AThe repairs have already been completed
BHypothetical completion of specific repairs or improvements as of the effective date of the appraisal✓ Correct
CThe property will be repaired within 6 months
DRepairs are not needed
Explanation
An 'as repaired' or 'subject to completion' value is a hypothetical condition assuming that specified repairs or improvements have been completed as of the appraisal effective date. This is common in renovation loans (FHA 203k, Fannie Mae HomeStyle) and REO properties.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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