Appraiser Marked Private Septic And Well As Public

[Huds_Harm]

It's not.

Clearly

 

[andrew81]

The FHA 4000.1 guidelines are:

- Require well water testing when the distance between the well and septic system is less than 100 feet.
- Existing construction wells must be 50 ft or greater from the septic tank.
- Existing construction wells must be 100 ft or greater from the drain field.
- Existing construction septic tank drain field reduced to 75 feet if allowed by local authority.
- If the Property has a septic system, the Appraiser must visually observe it for any signs of failure or surface evidence of malfunction. If there are readily observable deficiencies, the Appraiser must require repair or further inspection.
- The Appraiser is not required to sketch or note distances between the well, property lines, septic tanks, drain fields, or building Structures but may provide estimated distances where they are comfortable doing so. When available, the Appraiser should obtain from the homeowner or Mortgagee a copy of a survey or other documents attesting to the separation distances between the well and septic system or other sources of pollution.

The appraiser did make an error by indicating public water and sewer instead of private well and septic.

However, even if the appraiser appropriately indicated private well and septic, according to FHA guidelines, it is not the appraisers responsibility to note the distances.

 

[spittman]

Sure appraiser checked the wrong box but I don't see how that matters. Appraiser's are only required to call for further inspection ONLY if there were readily observable issues discovered during the walk through. At least you, the agent, the underwriter or all three knew there was a septic and a well on this property. Having a well and a septic on same property should have been a redflag for the lender which would have prompted a septic inspection and a survey. Both of these should have been provided to the appraiser before he even came out to the property. Marking it public or private is inconsequential.

By the way, the book you are quoting from is at least a decade old and is not the same handbook that appraiser's refer to. Please see latest copy of Handbook 4001.1 dated 10/26/2021.

Here are a few excerpts from the most recent handbook:

Mortgagees bear primary responsibility for determining eligibility and the sufficiency of collateral; however, the Appraiser provides preliminary verification that the Property Acceptability Criteria have been met and an appraised value for the property.

The Appraiser must obtain all of the following from the Mortgagee before beginning an appraisal: surveys, ... any other legal documents (IE, home inspection, etc.).

The Appraiser must identify readily observable defective conditions.

Appraisers may not recommend inspections only as a means of limiting liability. The reason or indication of a particular problem must be given when requiring an inspection. (IE, if an appraiser does not have evidence there is a problem with the septic, he/she is not required to call for further inspection, lender may opt to do so).

If inspection is required, the Appraiser must cite the reason for requiring an inspection.

The Appraiser must flush the toilets and operate a sample of faucets to observe water pressure and flow, to determine that the plumbing system is intact, that it does not emit foul odors, that faucets function appropriately, that both cold and hot water run, and that there are no readily observable evidence of leaks or structural damage under fixtures.

If the Property has a septic system, the Appraiser must visually observe it for any signs of failure or surface evidence of malfunction. If there are readily observable deficiencies, the Appraiser must require repair or further inspection.

The Appraiser must also be familiar with the minimum distance requirements between private wells and sources of pollution and, if discernible, comment on them. The Appraiser is not required to sketch or note distances between the well, property lines, septic tanks, drain fields, or building structures but may provide estimated distances where they are comfortable doing so. When available, the Appraiser should obtain from the homeowner or Mortgagee a copy of a survey or other documents attesting to the separation distances between the well and septic system or other sources of pollution.

Hope this helps in determining who is to blame for not getting a septic system inspection. Good luck.

 

[Michigander]

How long ago did you buy the house? How many people are living in it? When did you last have the tanks pumped?

Again

 

[TerryRohrer]

I’ve heard appraisers use that as an out. Thanks

They hope they can prevail, should their judgements be questioned. I can tell you, as noted in my earlier post, that it won't always work.

 

[sputnam]

The appraiser's job is to develop and report an opinion of value. The better the information about the subject is, the better the appraiser can do that job. It is NOT the appraiser's job to do what home inspectors do. It never has been. A lot of times, this sort of problem could have been avoided by the Client/Borrower/Owner providing the appraiser with ALL relevant information at the time the appraiser is engaged. Instead, what often happens, is the Client (or AMC) sends the appraiser the names, property address, and type of appraisal requested. No survey, no inspection report, no list of recent updates or known problems.... And then, when the appraiser doesn't find all the things that are within the expertise of other professionals... the appraiser gets the blame.

 

[chad hampton]

Sorry you are going through this. It appears the appraiser did make an error in noting what sewer system the home had. But is that the reason the septic system failed? The appraiser flushes the toilets and if they work and the yard isn't flooded with sewage, then that's all they know. The home still would of qualified for an FHA loan had it been marked septic. The issue may be setbacks, but those are one of those things where the gov't entities ask appraisers for but appraiser can't really provide. But because the govt is so big and the appraiser is so small, they get what they want when in reality, it's worthless.

Seems a case of bad luck - you bought a home in which the septic system was full. It is typical when buying a home on septic to get it maintained after purchase just for these cases. While it's a mess now, it can be repaired.

 

[Huds_Harm]

The appraiser's job is to develop and report an opinion of value. The better the information about the subject is, the better the appraiser can do that job. It is NOT the appraiser's job to do what home inspectors do. It never has been. A lot of times, this sort of problem could have been avoided by the Client/Borrower/Owner providing the appraiser with ALL relevant information at the time the appraiser is engaged. Instead, what often happens, is the Client (or AMC) sends the appraiser the names, property address, and type of appraisal requested. No survey, no inspection report, no list of recent updates or known problems.... And then, when the appraiser doesn't find all the things that are within the expertise of other professionals... the appraiser gets the blame.

I agree and have considered the seller purposely not disclosing the system to the appraiser as he was a flipper.

 

[Huds_Harm]

Sorry you are going through this. It appears the appraiser did make an error in noting what sewer system the home had. But is that the reason the septic system failed? The appraiser flushes the toilets and if they work and the yard isn't flooded with sewage, then that's all they know. The home still would of qualified for an FHA loan had it been marked septic. The issue may be setbacks, but those are one of those things where the gov't entities ask appraisers for but appraiser can't really provide. But because the govt is so big and the appraiser is so small, they get what they want when in reality, it's worthless.

Seems a case of bad luck - you bought a home in which the septic system was full. It is typical when buying a home on septic to get it maintained after purchase just for these cases. While it's a mess now, it can be repaired.

The home would not have qualified had it been marked septic due to the minimum distance requirements not being met.

 

[Huds_Harm]

The appraiser's job is to develop and report an opinion of value. The better the information about the subject is, the better the appraiser can do that job. It is NOT the appraiser's job to do what home inspectors do. It never has been. A lot of times, this sort of problem could have been avoided by the Client/Borrower/Owner providing the appraiser with ALL relevant information at the time the appraiser is engaged. Instead, what often happens, is the Client (or AMC) sends the appraiser the names, property address, and type of appraisal requested. No survey, no inspection report, no list of recent updates or known problems.... And then, when the appraiser doesn't find all the things that are within the expertise of other professionals... the appraiser gets the blame.

In addition to establishing the value of the property, an FHA appraisal determines whether the home meets the agency's minimum property requirements. An appraisal is a written assessment of a property performed during the mortgage approval process.