Have you ever felt like an appraiser required ridiculously small repairs? I mean, can an inoperable dishwasher, missing carbon monoxide detector or minor amounts of chipping paint seriously hold up an FHA loan? If a house is worth $200,000 and $20 worth of repairs are needed, is it really legit for the appraiser to require repairs?
It’s understandably frustrating when a sale or refinance is held up by repair items noted by the appraiser – especially for very small-ticket items. However, appraisers aren’t in the hostage business, and they should only be requiring repairs as outlined by FHA / HUD. Any required repairs for an FHA loan should be about bringing the property up to FHA Minimum Property Requirements (MPR) so the property can be guaranteed for a loan by HUD. The appraiser acts as the eyes of the lender and FHA, so the appraiser will put on FHA “goggles” (I don’t literally put on goggles like the picture) to inspect the property to look for FHA standards and any issues that might impact security, safety, soundness and economic longevity. Sure, the appraiser gets paid for a reinspection, but that’s not the motivating factor for calling out repairs (or shouldn’t be).
Does the appraiser actually have to reinspect the property? Most of the time the appraiser is called to go back out to verify repairs were made. It’s my understanding the underwriter can overrule a reinspection, but my clients typically want me to go back out so they know repairs were truly done.
Why can’t the appraiser use photos from the owner or agent? The appraiser cannot verify repairs were completed simply by someone else’s word or even photos. In my experience most agents and owners are telling the truth about repairs (and I believe them), but if my client has hired me to go back out to a property, and I have to sign my name to verify repairs were made, then I need to be the person doing the reinspection. It can sometimes feel like appraisers are being difficult and picky about needing to do a reinspection, but they’re simply following instructions from the client. Besides, if your client hired you to verify work was done, would you sign your name to something if you didn’t actually see the work in person? Here is a recent email conversation that illustrates misunderstanding and frustration about this scenario.
Agent: The repairs are being installed by tonight. Please consider sending in your report tonight. The seller is committed to making sure these items are done. We are truly in a time crunch.
Me: I can only sign off when it is done.
Agent: You’re killing me.
Me: I’ll get out there right away when it’s done.
Common FHA Repair Issues: If you’re going to be selling a property or doing a refinance, you may wish to brush up on FHA standards. Please see the video below (or here) for 25 of the most common FHA repair issues, and take a look at the FHA Appraisal Article Library on the Sacramento Appraisal Blog.
What is the most random repair you’ve seen an appraiser call out? What types of repairs are most common? If you work in the real estate industry, do you find appraisers to be handling reinspections right away? I’d love to hear any stories or questions you have below in the comments.
If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Twitter, subscribe to posts by email or “like” my page on Facebook
Zero Value: There is no such thing in the FHA world for a certain feature or structure on a property to be given “zero value”. For example, despite a buyer, seller and agents agreeing that the run-down garage is not included in the sale, that’s not the way the appraiser will look at it.
Direct Ordering: The lender can actually order FHA appraisals directly from the appraiser. FHA does not require the use of an AMC or third-party ordering system (made popular through