For appraisals that are made subject to completion per plans and specifications, or to repairs, alterations or conditions, a final inspection of the property is required and a completion report must be provided that documents that the property has been completed. The completion report must meet the requirements of this section and must be retained in the Mortgage file.
1. For appraisals that are made subject to completion per plans and specifications, or are subject to repairs or alterations:
- An appraiser must perform the final inspection of the property and sign the completion report
- The completion report must include updated photographs if the photographs provided as exhibits to the appraisal report do not reflect the condition and marketability of the dwelling as of the Settlement Date. If the renovations, rehabilitation or upgrades are to the interior of the improvements, interior photographs are required.
2. For appraisals that are made subject to final inspection of the property by a licensed professional (e.g. structural engineer, well digger, pest inspector):
- A licensed professional must perform the inspection of the property and complete any needed repairs
- The completion report must be either:
- A report signed by the licensed professional who inspected the property stating that the repair is not required, or
- A report or invoice signed by the licensed professional who performed the repairs stating that the repair has been completed and the issue corrected. The report or invoice must provide the professional's license number and signature.
3. For appraisals that are subject to any of the conditions above in 1 and 2, the inspection of the property and the completion report must meet all the following requirements:
- The final inspection of the property must be performed after completion of the construction, repairs, improvements, alterations or conditions
- The completion report must state that all conditions or requirements set forth in the appraisal have been fulfilled, or that the repairs have been completed or were not necessary
- The completion report must be dated before the Settlement Date unless the requirements for incomplete improvements have been met. (See Section 5601.2(b) for more information.)
See Form 442 for a suggested form or suggested text that may be used as a completion report.
If a final inspection of the property and a new appraisal of the property are both required, the Seller has the option to obtain a new appraisal that also acts as a completion report. The appraiser performing the new appraisal must provide an 'as is' value as the opinion of market value. See Section 5601.5(c) for more information.
Additional Resource: https://www.allregs.com/tpl/Viewform.aspx?formid=00051759&formtype=agency#page=493