John asked:
Subject is a condo in an eight unit building. Appraisal states that all 8 units are owner occupied. In reality, there are 4 units that are owner occupied, with the other 4 being rented.
For financing purposes, it is advantageous for the appraisal to represent that 8 units are owner occupied but I am unsure if we, as buyers of one of the 8 units, are at risk if, in the future (after closing), this is detected.
Anyone who has insight on this? Thank you.
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{ 2 comments }
Since you aware of the rental situation, you need to inform the appraiser of the situation, and allow the appraiser to make any adjustments if needed. There may or may NOT be a valuation adjustment. It is best to handle any such scenario upfront, so that you are protected down the road.
many lenders will NOT loan on condos in a building NOT 80% owner occupied
but it is their job to find this out, not yours to tell them
the risk is when you want to sell, that the appraiser is more thorough and prospective buyer can’t get loan