Conventional loans - subject to repairs

[Niki Dransfeldt]

Hello!

I've ran into a few conventional purchasing transactions that have been subject to repairs recently. Most recently the only repair required was a TPR valve discharge pipe installed on the water heater. As a real estate agent, we see this pointed out on a home inspection very often. Or on an FHA appraisal. However, it's not something I ever worry about on a conventional appraisal.

Easy enough fix. But the appraisers generally are not accepting pictures of the repair and they want to return to the house, which is another fee for the buyer. Sellers are also surprised by repairs like this.

Can anyone explain why these minor repairs are now popping up on conventional appraisals?

Thanks!

 

[glenn walker]

Hello!

I've ran into a few conventional purchasing transactions that have been subject to repairs recently. Most recently the only repair required was a TPR valve discharge pipe installed on the water heater. As a real estate agent, we see this pointed out on a home inspection very often. Or on an FHA appraisal. However, it's not something I ever worry about on a conventional appraisal.

Easy enough fix. But the appraisers generally are not accepting pictures of the repair and they want to return to the house, which is another fee for the buyer. Sellers are also surprised by repairs like this.

Can anyone explain why these minor repairs are now popping up on conventional appraisals?

Thanks!

As also a broker I suggest to all listing agent to get all minor issues like PRV Valves Installed just in case.

As far as not accepting Agents Photos thats because Lenders and Fannie Mae require the appraiser to Certify and sign that they did a re-inspection and verified and took their own photos. I know its kinda stupid but it is what it is,

 

[Tiffany Gibbons]

Hello!

I've ran into a few conventional purchasing transactions that have been subject to repairs recently. Most recently the only repair required was a TPR valve discharge pipe installed on the water heater. As a real estate agent, we see this pointed out on a home inspection very often. Or on an FHA appraisal. However, it's not something I ever worry about on a conventional appraisal.

Easy enough fix. But the appraisers generally are not accepting pictures of the repair and they want to return to the house, which is another fee for the buyer. Sellers are also surprised by repairs like this.

Can anyone explain why these minor repairs are now popping up on conventional appraisals?

Thanks!

The lender is requiring the appraiser to verify and telling you that the appraiser required a final? The Lender could opt to certify it, but they want someone's license number to blame? Just my opinion, based on my own experiences.

 

[shrubberyvaluation]

Hello!

I've ran into a few conventional purchasing transactions that have been subject to repairs recently. Most recently the only repair required was a TPR valve discharge pipe installed on the water heater. As a real estate agent, we see this pointed out on a home inspection very often. Or on an FHA appraisal. However, it's not something I ever worry about on a conventional appraisal.

Easy enough fix. But the appraisers generally are not accepting pictures of the repair and they want to return to the house, which is another fee for the buyer. Sellers are also surprised by repairs like this.

Can anyone explain why these minor repairs are now popping up on conventional appraisals?

Thanks!

Many times these repairs are required by the lender. The lender/underwriter can waive these repairs. The appraiser can't force you to do anything.

Its the lender's choice if they want to see it repaired, if they want us to fill out a common form, it says we persoanlly saw it repaired when we sign it. If they accept pictures and fill out a form that they sign that says they personally inspected it then they have falsified the document.

The lender is the issue, they have the final say, if you care about your client/buyer then you have to go through them.

 

[Tiffany Gibbons]

Many times these repairs are required by the lender. The lender/underwriter can waive these repairs. The appraiser can't force you to do anything.

Its the lender's choice if they want to see it repaired, if they want us to fill out a common form, it says we persoanlly saw it repaired when we sign it. If they accept pictures and fill out a form that they sign that says they personally inspected it then they have falsified the document.

The lender is the issue, they have the final say, if you care about your client/buyer then you have to go through them.

I'll add that while it seems like a big money maker for the appraiser to run back out and take a photo for a final, when that property is 45 minutes to get there and 45 minutes back, it's a total time waster as the lender always waits until the day before closing and then its an emergency. I always wonder why the seller wouldn't go ahead and fix something like that before listing it.

 

[Terrel L. Shields]

Can anyone explain why these minor repairs are now popping up on conventional appraisals?

That's happened for 30 years at least. I recall going back to see if they installed the closet doors on a new construction. I have done a lot of these for $75 and spent an hour driving to and back from the property, then filling out the completion forms.

If you are going thru FNMA or FHA, VA you should anticipate such. If an in-house (non-conforming conventional) loan, then they probably will waive minor repairs...or as most of my clients do, check it themselves. I don't do secondary market anymore because it is time-consuming, unprofitable and higher risk appraisals than other assignments.

they want to return to the house

No. They have to return to the house or lie on their certification. It's no money maker for the appraiser.

the seller wouldn't go ahead and fix something like that before listing it.

If they do a home inspection, they'd be stupid not to.

 

[sputnam]

It's always been true that FHA and VA appraisers are to report safety issues. Many appraisers who do conventional work do also. It's likely that appraisers' Clients are looking at that issue more carefully. Insurance companies have been known to deny claims based on improper TPR valves.

The water heater is arguably one of the most dangerous pieces of equipment in dwellings. A runaway water heater.. one in which all the safety features have failed.. has the explosive equivalent of 10 pounds of dynamite for every gallon of capacity (so I've been told by experts). That means that a fifty gallon water heater could have the explosive power of a 500 pound bomb. Not something to be casual about.

 

[Niki Dransfeldt]

As also a broker I suggest to all listing agent to get all minor issues like PRV Valves Installed just in case.

As far as not accepting Agents Photos thats because Lenders and Fannie Mae require the appraiser to Certify and sign that they did a re-inspection and verified and took their own photos. I know its kinda stupid but it is what it is,

I think my struggle is where does it end? What is safety, what isn't? There's no GFCIs in this house. They didn't flag that there are no smoke detectors in it which is required in Illinois. There's no set list for a conventional loan of what needs to be fixed and it's a total crap shoot of what an appraiser is going to call out. It's just a difficult conversation to have with sellers and buyers. "This may or may not get called out depending on the appraiser that comes to the house.". This is especially difficult on a conventional loan as many of the sellers in this area are selling as is.

I guess I just wish there was some sort of norm across the board. Where I could say hey put a valve discharge pipe on this because it's going to get called out. Well this is the first one I've ever had called out on a conventional loan in 5 years.

 

[Niki Dransfeldt]

The lender is requiring the appraiser to verify and telling you that the appraiser required a final? The Lender could opt to certify it, but they want someone's license number to blame? Just my opinion, based on my own experiences.

Our lenders go by whatever is on the appraisal. If it says subject to a repair, it has to be done. We deal with very few in-house loans in my area. Not sure why. Not sure if it's because we have an average sale price of $125K and it's not worth keeping those type of loans or what.

 

[Niki Dransfeldt]

Many times these repairs are required by the lender. The lender/underwriter can waive these repairs. The appraiser can't force you to do anything.

Its the lender's choice if they want to see it repaired, if they want us to fill out a common form, it says we persoanlly saw it repaired when we sign it. If they accept pictures and fill out a form that they sign that says they personally inspected it then they have falsified the document.

The lender is the issue, they have the final say, if you care about your client/buyer then you have to go through them.

That's not been my experience. The mortgage lenders I've been working with have underwriters that will not go against what the appraiser says. The only way around it has been to get a new appraisal. If it is an in-house loan, yes. But that's a very small portion of the buyers I deal with. Maybe it's a regional thing. But if it's on the appraisal as subject to, it has to be done or the loan will be denied.

A recent mortgage lender that I work with on a regular basis tried to ask the appraiser to remove something from the appraisal and he refused to do it. The lender told me they can't sell these types of loans to the secondary market if that subject to repair is on there and it's not completed. So that's why they always go with what the appraiser says. If they can't find an agreement with the appraiser, they fire him and go hire a new appraiser. This can get pretty costly for the buyer.