“Property was n the middle of a remodel that was not completed” can be interpreted as “interior is a shell; all new finishes are required.” Even if you skip the granite counters and travertine floors this could easily be a $75,000 cost to complete.
Appraisers can and do appraise properties in varying stages of completion on a regular basis. If an appraiser declined to finish an appraisal because of a missing bathroom sink it has nothing to do with whether or not they are capable of appraising the property that way. Almost certainly, the appraiser was aware that their client would not be able to fund the loan they were seeking for that property under their loan propram.
The most favorable loan terms go with loan programs that have specific requirements about borrower qualification and collateral quality. From there the terms get less favorable in relation to the wrinkles the deal presents. There are loans for properties in varying conditions, including pre-construction, but the terms for those programs are not as favorable as the programs that require an intact home.
With the unfinished bath, your otherwise perfect home became a square peg. The lender could have chosen to have the appraiser make the appraisal subject to the completion of the bath (or the remodel), but that almost always results in the lender retaining and controlling the funds used to complete the repairs. Another option would be to lend on the property in it’s “as is” condition, KNOWING that if they have to take the property back they’re going to need to complete the repairs themselves.
Either of those two alternatives will net less to the property owner, and the appraiser was probably aware or was possibly instructed that this would kill their client’s deal, so there was no point in completing the appraisal. The only way that loan would have been made under those terms would have been if the appraiser had lied about the condition of the home, which I’m sure is not what the property owner here would have wanted.
Anyways, back to the remodel in Clairemont Mesa, The financing of this property will likely involve a construction loan at those terms with the lender retaining fund control over the costs to complete, so the price probably reflects an anticipation that upon completion the home will be worth about $500k or more. It should not be interpreted as meaning prices for this area have dropped to the low $400k ranges.