can an appraiser do this?

[silker]

Hi All
Thank you for this great website J
I have a question about the authority of an appraiser.
I am a Realtor and have the Buyer. The Lender (conventional loan) requested an appraisal through third party. The appraiser went out and appraised the house at agreed upon purchase price but stated this in his appraisal:

*** Repairs Required - **
The bath was observed to require the following;
New shower doors.
Remove balance of wallpaper and paint or re wallpaper.
Repaint entire bath including shower.
Test bath walls for mold as evidence of discoloration was observed (see attached photographs). Remediate and correct.
Report is subject to this condition being completed with a subsequent mold test by a licensed, professional (individual or
company) that results in there being no evidence of any such mold problems not only in the bathroom but throughout the
home as if it may have been present in one location within the home, this may have traveled to others.
Laundry room flooring to be replaced.

Needless to say, that the report came in on a Friday night, closing was supposed to be on the following Wednesday afternoon. This was the last day we could have closed because the house fell back to the bank the following day – yes, foreclosure.
Now, my thought is… did this appraiser overstep his boundaries by making a statement about mold that he is not qualified to make? The home inspector, a capacity when it comes to mold…. did not have any issue with the condition of the home or the discoloration in the bathroom of a house, vacant for 6 months and not aired out and he stated this in his re-inspection report too. Since there are no homes without mold – yes, yours and mine have mold spores too, so does the yard and street… I wonder if there is anything I can do to prevent someone loosing a home, a lender loosing a loan, two agents loosing commission and yes, the seller was in Bankruptcy so he lost quiet a bit of money too.
Remember if a lender hears mold,,, they run but a mold test can not be completed in the time we had to close, it takes sending samples out overnight, 24 hrs to cultivate the spores, then time for the facility to write a report and get back to inspector - and again there is no such thing as a house without any kind of mold.
I am grateful for any info you can provide, even if I am wrong. Thank you very much.
SilkeR

 

[berniek]

I'm not an appraiser, however I found this interesting:
Appraisers' Responsibility

If toxic mold is a concern for residential and commercial property owners, it has the potential of being a problem for real estate appraisers because of their concern with any potential impact of detrimental conditions upon value. The Kilian case may lessen the possibility of liability claims against an appraiser because the perception of mold as being hazardous is reduced and consequently there may be fewer instances in which mold is perceived as affecting value. It should be noted that the purpose of a property inspection by the appraiser is to obtain first-hand information about characteristics of the property that are relevant to the valuation assignment. Appraisers are not qualified to identify the presence of mold or other hazardous substances unless they possess training beyond that typical of an appraiser, e.g., as a property inspector, engineer, etc. However, appraisers may still be held responsible for reporting and addressing the environmental contamination of property when an abnormal condition, such as mold or a damp interior, is observed in the subject premises. In fact, the Federal National Mortgage Association (Fannie Mae) states, "The appraiser is responsible for noting in his or her report any adverse conditions (such as, but not limited to, needed repairs; deterioration; the presence of hazardous wastes, toxic substances or adverse environmental conditions; etc.) that were apparent during the inspection of the property or that he or she became aware of during the research involved in performing the appraisal" (37) Fannie Mae further states that when the appraiser observes an adverse property condition, but the appraiser is not "qualified to decide whether that condition requires immediate repair (such as the presence of mold, an active roof leak, settlement in the foundation, etc.), the property must be appraised subject to an inspection by a qualified professional." (38) Fannie Mae also notes that the appraiser is not responsible for conditions that are hidden or unapparent.

http://www.freepatentsonline.com/article/Appraisal-Journal/146173742.html

 

[kevlaw21]

You state this is a conventional loan. I'm not sure why the appraiser is making it "subject to" required repairs some of which appear to be deferred maintenance.

*** Repairs Required - **
The bath was observed to require the following;New shower doors.Remove balance of wallpaper and paint or re wallpaper.Repaint entire bath including shower.Test bath walls for mold as evidence of discoloration was observed (see attached photographs). Remediate and correct.Report is subject to this condition being completed with a subsequent mold test by a licensed, professional (individual orcompany) that results in there being no evidence of any such mold problems not only in the bathroom but throughout thehome as if it may have been present in one location within the home, this may have traveled to others.Laundry room flooring to be replaced.

New shower doors, re wallpaper, repaint entire bath, laundry room flooring to be replaced.. These should not be required repairs for conventional lending unless the appraiser is stating these items are bringing the condition of the property below C4 without repair (which I'd find hard to believe).

Secondly, the appraiser is required to state all conditions that were observable at time of inspection. If the appraiser feels there is a presence of mold than its his/her obligation to report it. He can recommend that an inspection be completed as part of the report, but as far as conventional lending this would be lending decision if they wish to proceed with the mold inspection. If it were FHA, health and safety issues arise and it would become a required condition of the report.

That's my understand.

 

[Mountain Man]

The responsibility to report issues such as that could be a lender's requirements, or could be an appraiser who is scared of their own shadow and requires stuff to CYA... or they could be padding the bill for another $100 inspection fee. Start with the lender, see what type of loan is involved and what are their requirements?

 

[residentialguy]

This is not required for Fannie Mae. It may be a specific lender requirement, but I've never seen this...typically they want Fannie requirements.

Appraisers report, lender's call for repair, unless it is a Safety, Security, and Soundness issue (as FHA puts it). Even then, it's up to the lender to decide if they want to lend on it as-is. The mold, if true, would need to be "subject to", not "as-is"...but the way this appraiser is talking, I wonder if "bath walls" don't mean a little mold in the tub grout.

 

[CANative]

Visually evidence of an infestation (mold/fungus whatever you want to call it) is a property condition which could adversely affect the livability, soundness or structural integrity of the property.

This is a mandatory reporting requirement and the appraiser must condition the appraisal on inspection (assuming it is not a problem) or on repair (assuming it is a problem.)

This is a Fannie Mae/Freddie Mac/FHA/VA requirement (it's pre-printed right on the appraisal form. See Page 1 of the appraisal report, second question from the bottom.) The appraiser probably went beyond the scope of work in make specific repair requirements (maybe.)

 

[TJSum]

Visually evidence of an infestation (mold/fungus whatever you want to call it) is a property condition which could adversely affect the livability, soundness or structural integrity of the property.

This is a mandatory reporting requirement and the appraiser must condition the appraisal on inspection (assuming it is not a problem) or on repair (assuming it is a problem.)

This is a Fannie Mae/Freddie Mac/FHA/VA requirement (it's pre-printed right on the appraisal form. See Page 1 of the appraisal report, second question from the bottom.) The appraiser probably went beyond the scope of work in make specific repair requirements (maybe.)

I pretty much agree. The repair items (except for the mold) seem out of line with the info provided, but not sure if we are getting the exact picture of the situation. But the mold issue is different. This could affect the soundness of the structure and the safety of the residents. Appraisers are not qualified to make this judgement, so an appraiser should call for an inspection to make sure the potential mold is not a serious issue. The report should have been made subject to a certification from someone qualified. If time does not allow for this, it is not the appraisers problem (sorry). Reasonable minds should be able to rearrange the time tables involved instead of trying to cut corners.

 

[AnonApprsr]

His comment about mold is fine.

 

[Mike Kennedy]

http://www.liability.com/claim_alerts/claimalerts_mold.aspx

 

[Delta85]

I also agree with others about the mold comment. I would have made the report subject to inspection by a licensed mold expert if I observed anything I thought could be a mold related health issue.

The other stuff I would not have made a stink about unless it was a lender requirement that I do so.