Average condition?

[Mike Seward]

FHA appraisal.
The subject property has wall to wall carpet that is extremely worn and very dirty.
The trim in several doorways has been deeply scratched by a large dog.

Since FHA now considers this deferred maintenance cosmetic, I made the report "as is". But I marked the condition as "average-".

The UW says that FHA doesn't care about carpets, so I must report the condition of the property as average.

I said "average" (per our friends at Fannie)means the property is substantially similar to other properties in the neighborhood based upon market expectations.

What do my fellow FHA appraisers think?

Mike

 

[Wendy]

Does the "Average" sale have nasty carpets? If not, then your subject's carpet is not average and not typical for the market.

Does icky carpet make the whole house below average? Well that is a whole 'nother topic...and why I disagree with not being able to use the +/- combined with average for FHA. "Average -" makes the most sense to me.

 

[G-man]

UW is full of sh*t.
You report the condition of the property, warts & all.
A property can have an older, worn roof, nasty carpet, cracked windows & dated fixtures. It would be, in my opinion, fair condition, but no FHA repairs would need to be completed, as these are "cosmetic" issues as far as FHA is concerned. Compare it to other similar properties and let the chips fall where they may. 'Course, you'll probably kiss the client good-bye, but thems the berries.

 

[NC Appraising]

FHA Appraisals

Mike,

I think your headed on the right track.

On the first page you should report all improvements and items in factual and specific terms. The first page has nothing to do with how the subject compares to the neighborhood.

Fannie Mae: "the appraiser should note if a property is characterized by deferred maintenance or lack of updating even if the same condition applies to competing properties".

The second page has to do with comparing the subject to competing properties.

What is the overall condition of the subject property? Does it have old paint, fixtures, doors, roof, HVAC, etc.? What is the age? Is it a two year old home that has dirty carpets and some trim that needs painting?


Finally, FHA does not allow average - or average +. It is appropriate to use avg/fair or avg/good.

Hope this helps.

 

[AnonApprsr]

I always used Average, Average/Good, Good. If the house is the crappiest house ever, guess what? It's Average. I will find a crappy house to compare it to that will also be Average. Sometimes if I'm comparing new construction to 1-3 year old homes, it would be Good and Superior. But that's rare. I've never used fair, seems like a term that appraisers shouldn't use.

 

[TC]

I always used Average, Average/Good, Good. If the house is the crappiest house ever, guess what? It's Average. I will find a crappy house to compare it to that will also be Average. Sometimes if I'm comparing new construction to 1-3 year old homes, it would be Good and Superior. But that's rare. I've never used fair, seems like a term that appraisers shouldn't use.

I'm guessing you never include interior photos in your reports.

TC

 

[NC Appraising]

FHA Appraisal

Anon,

Please explain yourself. Please, please tell me on page one of the URAR in the exterior and interior sections for your "crappiest house ever" you state average condition? I hope you put in poor or fair, you know the thing about specific and factual terms.....Page one has nothing to do with how the subject compares to competing properties

And then on page one under " describe the condition of the property" you do not put : the subject was observed to be in average condition"? Page one has nothing to do with how the subject compares to competing properties. Here you should report all needed repairs, deterioration, lack of updating, etc.

 

[Pilgrum]

I describe the condition of the subject as in "overall" average condition and then go on to describe the carpets or trim as "fair" or whatever condition they may be in.
In the grid I will call the comparables as Average/Superior, ( No + or - ) unless they have similar condition issues, and adjust accordingly.
While FHA doesn't consider cosmetic defects as a reason not to loan you are reporting on the VALUE of the subject. If cosmetic issues affect the value then you have to address the difference.

 

[AnonApprsr]

Anon,

Please explain yourself. Please, please tell me on page one of the URAR in the exterior and interior sections for your "crappiest house ever" you state average condition? I hope you put in poor or fair, you know the thing about specific and factual terms.....Page one has nothing to do with how the subject compares to competing properties

And then on page one under " describe the condition of the property" you do not put : the subject was observed to be in average condition"? Page one has nothing to do with how the subject compares to competing properties. Here you should report all needed repairs, deterioration, lack of updating, etc.

I'm talking in the Sales Comparison Grid.

 

[Doug Wegener]

Average

Does the "Average" sale have nasty carpets? If not, then your subject's carpet is not average and not typical for the market.

Does icky carpet make the whole house below average? Well that is a whole 'nother topic...and why I disagree with not being able to use the +/- combined with average for FHA. "Average -" makes the most sense to me.

I agree with this.

Not everything is cut and dried and fits nicely into a certain category.

I did an FHA two weeks ago with carpet that was dirty and even had one small tear. If that is all it was, I probably wouldn't have called it fair. But there were paint surfaces that were marked and stained, two leaking faucets, and a small section of drywall repair. At some point you just cant call them "average" any more.

I'm not sure if dirty carpet alone would justify a fair rating.