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  #1  
Old 06-18-2011, 06:45 PM
Michael Martin Michael Martin is offline
 
Join Date: Jan 2005
State: New Hampshire
Professional Status: Certified Residential Appraiser
Posts: 216
Default Yet another defective paint thread.

I am just wondering how my fellow appraisers would respond to the following. This is for a circa 1900 multi-family with substantial defective paint evident. Apparently, the realtor gave himself a crash course on FHA guidelines yesterday afternoon?

"Thank you for meeting me at the property at 12:00 today.

Please excuse my reaction, but honestly, I was taken aback by your position with regard to the "paint" conditions. I never anticipated the exterior would be further conditioned, especially after the areas highlighted by you were taken care of.

Without specific areas noted, I find it impossible to give direction as to the areas that require attention. This might suggest the entire building needs paint, which is unacceptable for obvious reasons. Further, your comment that you thought the property was "not a good FHA property because of the exterior paint conditions" from your first visit to the property, is most disconcerting. That is not the message that was given either to my assistant or contained in your appraisal. In fact, the exterior of this property as compared to countless NH homes and those approved for FHA loans previously is rather superior.

I have read the FHA guidelines as they relate to "appraisals" and to your responsibility as an FHA appraiser. The guidelines are quite clear that the "conditions" the FHA is concerned with are those that present 1)safety issues OR 2)effect the structural integrity of the building. The guidelines, in fact, state that they are NOT intended to make issue of 1)normal wear and tear or 2)minor conditions. Is this building SAFE, SOUND and SANITARY ?

The areas you quickly pointed out (side door entry trim to garage) where there is evidence of chipping paint on the trim closest to the ground, I argue is normal wear and tear. This is very common on any house. Other slight paint blemishes on the trim are also rather "normal". In short, you don't get the impression upon approaching this house that there are any significant areas of need or anything that would even come close to being serious or defective.

Still, please know that if you can define any "specific" and more notable areas that were NOT treated and included in your first visit to the property, I will gladly inform both buyers and sellers and I am guessing they will address immediately.

I thank you for your further consideration and time"

I started to type a response yesterday but decided to hold off and sleep on it. How would you all handle?
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Old 06-18-2011, 07:48 PM
JamesRockford JamesRockford is offline
 
Join Date: Oct 2010
Location: Paradise Cove, Malibu, CA
State: California
Professional Status: Certified General Appraiser
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Default

This is why I NEVER "meet Realtors" at a property when inspecting it. I will call and inquire as to times I can inspect it, but also request that neither the Realtor or Borrower is there during the inspection. I've had no issues with this at all.

Also, it is my "policy" that all communication from Realtors, Borrowers, et al after the appraisal has been delivered goes through the lender and then through my client to me. This saves any "defensive" attitude I or the Realtor/Borrower may bring into the conversation. I discuss the report with the Client only, period.

I also avoid any verbal conversation regarding required repairs, I state it plainly in the appraisal report. I especially would not use a phrase such as "I dont think this is a good FHA property". I would state clearly in the report what IS required to meet FHA Minimum Property Standards and be VERY clear about such things as exactly what painting is required.

At this point in time, I would not even respond directly to the Realtor. I would call the Client, let them know what is going on and ask how they would like you to address the issue. Probably revise your comments in the report.

Good luck to you.

Last edited by JamesRockford : 06-19-2011 at 10:21 AM.
  #3  
Old 06-18-2011, 08:36 PM
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RSW RSW is offline
 
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State: Tennessee
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Default

I agree with James. I would never make a comment the property is not good for FHA. I would point out the defects that need to be repaired in order to meet FHA MPRs and that is it.
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  #4  
Old 06-18-2011, 09:19 PM
Michael Martin Michael Martin is offline
 
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State: New Hampshire
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Thanks, FTR - I never said the property was not "good for FHA", those are the realtors words. I have not had any further contact nor will I.
  #5  
Old 06-18-2011, 09:24 PM
Michael Martin Michael Martin is offline
 
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State: New Hampshire
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Default

Quote:
Originally Posted by JamesRockford View Post
This is why I NEVER "meet Realtors" at a property when inspecting it. I will call and inquire as to times I can inspect it, but also request that neither the Realtor or Borrower is there during the inspection. I've had no issues with this at all.
For real? No offense but how long have you been appraising?
  #6  
Old 06-18-2011, 09:40 PM
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PropertyEconomics PropertyEconomics is offline
 
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State: New Mexico
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Appraisers who do not meet Realtors simply do not understand the process of appraising and confirming data .... You guys are simply amazing to me ... and you wonder why the Realtor / Lender / Public think you are arrogant asses?

Seriously?
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  #7  
Old 06-18-2011, 10:34 PM
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AnonApprsr AnonApprsr is offline
 
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I have no problem meeting realtors, I usually pump them for information well beyond that specific property. If they're nice people I keep their name on a list of market participants to call in the future. I would have kept my mouth shut regarding FHA Compliance, take this as a lesson.
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  #8  
Old 06-18-2011, 10:50 PM
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DMZwerg DMZwerg is offline
 
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State: Wisconsin
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Default

Quote:
Originally Posted by Michael Martin View Post
I have read the FHA guidelines as they relate to "appraisals" and to your responsibility as an FHA appraiser. The guidelines are quite clear that the "conditions" the FHA is concerned with are those that present 1)safety issues OR 2)effect the structural integrity of the building. The guidelines, in fact, state that they are NOT intended to make issue of 1)normal wear and tear or 2)minor conditions. Is this building SAFE, SOUND and SANITARY ?
Me, personally? I don't do FHA but there are two FEDERAL LAWS that each and every real estate salesperson and broker MUST be aware of (by regulation) that I would likely quote. Given time to look them up I would probably say something to the affect of:
As you know from CE or when you received your RE Sales license as per The Lead-Based Paint Hazard Act of 1992 lead-based paint is considered a significant hazard and can be found in homes built prior to 1978. Since this property is absolutely built prior to 1978 and, as a multi-family, it would be likely that at least one unit (unless all less than 1 BR) could be inhabited by children as families with children are a protected class under the Fair Housing Amendments Act of 1988, I believe noting paint defects as a potentially unsafe condition is warranted. Is there any other federal laws you believe would trump the two I mentioned?

If asked on the spot my reply would be more like:
I sorta remember something about Lead-Based Paint being a concern in older buildings and something about children being a protected class ... if that doesn't ring a bell with you I can double check on the exact names of the laws when I get to my office.
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  #9  
Old 06-19-2011, 10:49 AM
JamesRockford JamesRockford is offline
 
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Default

Quote:
Originally Posted by PropertyEconomics View Post
Appraisers who do not meet Realtors simply do not understand the process of appraising and confirming data ....
Oh, OK.

Since when does having a Realtor follow me around when measuring a house have anything to do with the "process of appraising and confirming data?"

When talking with or e-mailing the Realtor prior to inspection I first request a copy of the inspection report and the seller's disclosure statement, then give them the opportunity to provide any information to me they wish about the property. I specifically ask if there are any positive or negative or unique/special items regarding the property that are not noted in MLS and/or will not be apparent during my inspection including prior damage that has been repaired. I also ask if they believe the information in tax records is reasonably accurate. I then follow up with additional questions after the inspection if necessary.
  #10  
Old 06-19-2011, 11:11 AM
Michael Martin Michael Martin is offline
 
Join Date: Jan 2005
State: New Hampshire
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Default

Quote:
Originally Posted by JamesRockford View Post
Oh, OK.

Since when does having a Realtor follow me around when measuring a house have anything to do with the "process of appraising and confirming data?"

When talking with or e-mailing the Realtor prior to inspection I first request a copy of the inspection report and the seller's disclosure statement, then give them the opportunity to provide any information to me they wish about the property. I specifically ask if there are any positive or negative or unique/special items regarding the property that are not noted in MLS and/or will not be apparent during my inspection including prior damage that has been repaired. I also ask if they believe the information in tax records is reasonably accurate. I then follow up with additional questions after the inspection if necessary.
Ok, well that explains the realtor side of it(I guess). So what do you tell homeowners when doing a refinance? Do you ask them to step outside while you do your inspection or do you tell them to come out and meet you in the driveway before you enter? And just out of curiosity - What % of the time do the realtors/borrowers question why they cannot be present?
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