Appraiser Marked Private Septic And Well As Public

[Carlos Danger]

I wouldn't want to be that appraiser. I would also be interested in the answer to Michigander's question.

 

[Huds_Harm]

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

5 months. 4. The tanks were pumped prior to moving in but that doesn’t matter when there is a main line separation and a 10ft belly that requires tunneling to fix.

 

[Huds_Harm]

I wouldn't want to be that appraiser. I would also be interested in the answer to Michigander's question.

5 months. 4. The tanks were pumped prior to moving in but that doesn’t matter when there is a main line separation and a 10ft belly that requires tunneling to fix.

 

[Jayjay25]

It’s definitely no fun when problems arise after buying a home. The appraisers job is only to report the distances between the well and septic. If there were any above ground issues with the septic system then the home inspector would have had no problem finding/smelling it. The last home I appraised that didn’t meet FHA well/septic distance requirements the lender/HUD still allowed the loan to go through because the system met the local distance requirements. Pretty sure the borrower was never made aware because the appraisal is for the bank. Sounds like the bank may be able to sue to appraiser if the loan defaults but not the borrower.

 

[Huds_Harm]

The FHA 4000.1 guidelines are:


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.

So how do they do this without determining distances?

- 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.

 

[EddieB]

HUD just encourages buyers to obtain a separate home inspection but does not require it due to an FHA appraisal supposedly being an inspection as well.

That’s wrong. Appraisal inspection is not a home inspection.

 

[Sadie]

Per the OP: the purchaser knew the property has a septic system, the seller knew the property has a septic system, the realtor(s) knew the property has a septic system and the lender knew the property has a septic system. The lender will require either a recent pumping of the tank or proof that it had been done recently. Apparently this happened. The lender will also require a well test that includes a flow test and a test for purity. Don't know if this happened, but probably did. Many times a lender will also check the functionality of the septic system. Unclear if this happened.

Most likely you got the first iteration of the appraisal report and the discrepancy between public and private was corrected in a subsequent report. My point is, the septic system was not a secret. The lender has the ultimate responsibility to approve the property for FHA financing and should have a copy of the survey for the well and septic system. That information is not reliant on the appraiser. They are the ones who sign off on it, not the appraiser. My guess is whoever signed off on the functionality of the system should be looked at. Also, if the well and septic are so close together, why did the UW approve it?
As you state: "I did but it did not include septic as it couldn’t be located at the time of inspection and is not on the survey however by the time of appraisal it was located and access available to inspect." Did the inspector go back out? If not why?

The well and septic system locations and distances were known prior to the appraisal. This might be one of those things that just is, and makes you regret being a home owner. I don't know how septic systems would break in a way you describe, but my first thought is to go back to the person you bought it from. Look at the disclosures and see what they say. Also cruise through county records and see if there is anything that will help, such as permits or code violations.

 

[EddieB]

5 months. 4. The tanks were pumped prior to moving in but that doesn’t matter when there is a main line separation and a 10ft belly that requires tunneling to fix.

Again, the seller disclosure statements are your path forward. In my opinion.

I think you’re fixated in the wrong direction unless you believe you can get HUD to buy back your loan or pay for the repairs.

Sorry you are dealing with this sitty ****uation. Unfortunately the old saying of Buyer Beware is true. Hopefully you do have some recourse

 

[Huds_Harm]

Per the OP: the purchaser knew the property has a septic system, the seller knew the property has a septic system, the realtor(s) knew the property has a septic system and the lender knew the property has a septic system. The lender will require either a recent pumping of the tank or proof that it had been done recently. Apparently this happened. The lender will also require a well test that includes a flow test and a test for purity. Don't know if this happened, but probably did. Many times a lender will also check the functionality of the septic system. Unclear if this happened.

Most likely you got the first iteration of the appraisal report and the discrepancy between public and private was corrected in a subsequent report. My point is, the septic system was not a secret. The lender has the ultimate responsibility to approve the property for FHA financing and should have a copy of the survey for the well and septic system. That information is not reliant on the appraiser. They are the ones who sign off on it, not the appraiser. My guess is whoever signed off on the functionality of the system should be looked at. Also, if the well and septic are so close together, why did the UW approve it?
As you state: "I did but it did not include septic as it couldn’t be located at the time of inspection and is not on the survey however by the time of appraisal it was located and access available to inspect." Did the inspector go back out? If not why?

The well and septic system locations and distances were known prior to the appraisal. This might be one of those things that just is, and makes you regret being a home owner. I don't know how septic systems would break in a way you describe, but my first thought is to go back to the person you bought it from. Look at the disclosures and see what they say. Also cruise through county records and see if there is anything that will help, such as permits or code violations.

The well and septic are not notated on the survey and none of the above tests were performed.

 

[Huds_Harm]

That’s wrong. Appraisal inspection is not a home inspection.

n 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.