Does Carpet Neeed to Be installed for a Bank Appraisal?

[Ohiowright]

Hi, we're purchasing a home for more than the asking price so the owner can make the needed repairs to the home which would allow us to process a conventional loan. Can you advise if carpets need to be installed prior to the bank appraisal? Currently all of the flooring has been removed and my husband and I wanted to decide after we purchase it what we're actually going to put down for flooring and where. Can you please advise? Thank you.

 

[The Warrior Monk]

There is no hard and fast rules regarding this issue. It depends on rules of the particular lender, so you will have to ask them.

 

[Lobo Fan]

David is correct, it will be up to the lender. FHA does not require floor coverings at all. Floors can be bare plywood or concrete as long as there are no tripping hazards. It will be a cosmetic adjustment downward in any event if unistalled.

 

[Joker]

David is right. It's up to the lender. However, be advised that if repairs are not done and the appraisal is contingent upon those repairs that the lender may see it as a construction loan. If that's the case, your interest rate may be higher and you will likely have to pay the appraiser to come back out to the house to certify that the work is done as proposed.

 

[Riick]

HOW... pray tell.... are you going to have the Seller pay for
this improvement, out of the over-payment for the property,
that you think the Bank will mortgage.

Ask $100,000
((95% Mortgage: $95,000))
Cash: $5,000

Contract Price: $110,000
95% Mortgage $104,500
Cash: $5,500

Gee, I wonder if the appraiser will be able to "find" that extra $10,000 ??

 

[LindaSL]

In agreement!

 

[Howard Klahr]

HOW... pray tell.... are you going to have the Seller pay for
this improvement, out of the over-payment for the property,
that you think the Bank will mortgage.

Ask $100,000
((95% Mortgage: $95,000))
Cash: $5,000

Contract Price: $110,000
95% Mortgage $104,500
Cash: $5,500

Gee, I wonder if the appraiser will be able to "find" that extra $10,000 ??

How do you know that the original listing price did not reflect the current condition and that the differential is accounted for in the repairs?

 

[Michigan CG]

How do you know that the original listing price did not reflect the current condition and that the differential is accounted for in the repairs?

That point is good...but why do appraisers need a contract in order appraise? It is worth what it is worth.

Not to sound snobby but in the commercial world we get no "hints" of value. The order comes in:

"Please appraise this 30,000 SF office building", or "Please appraise this 15-acre vacant land tract with a traffic count of 60,000 cars a day".

There is no contract to look at and I could care less about the contract or who agrees to what. The comparable properties and market data will show you the market value.

Last year I had the 15-acre property example above. The client asked me what it was worth. After I submitted the report he was surprised. My value was almost double the asking price of the property. I believe that most appraisers would be influenced by the contract price.

-----------------------------------

That was kind of off topic.....for the original poster, FHA does not require carpeting but your lender may require it. If there is a concern tell your lender you will put the needed money for the carpet in an escrow account to be used only for the carpeting.

 

[Lobo Fan]

A couple of points. The cash to the seller will be the balance after he pays off his existing loan(s). It has nothing to do with the loan.

FNMA requires a review of the contract to look for monkey business. Personal property, rebates, closing cost assistance, etc. If it were up to me, I would prefer to not deal with the contract.

 

[Webbed Feet]

Is this the FHA/HUD section of the forum?

Hi, we're purchasing a home for more than the asking price so the owner can make the needed repairs to the home which would allow us to process a conventional loan. Can you advise if carpets need to be installed prior to the bank appraisal? Currently all of the flooring has been removed and my husband and I wanted to decide after we purchase it what we're actually going to put down for flooring and where. Can you please advise? Thank you.

Somehow, mysteriously, answers to this started involving FHA guidelines and rules when the loan stated was for a conventional loan. Not an FHA insured loan.

And with wonderful lack of respect for all the lovely guidelines and rules forced upon the appraisal trades, what in the ding dong do any of them have to do with market reaction and marketability concerns? Or what do they have to do with additional SOW (Scope of Work) requirements by a specific client or intended users?

In all markets I work in, a house void of literally all floor covering finishes would not be market acceptable as is without suffering a penalty in both value and marketablity. In the past, and certainly during these current times of stressful loan underwriting, I would absolutely believe that upon notification a client / lender is going to ask for a "Subject To" appraisal condition all market acceptable floor coverings be installed prior to loan closing, or if the appraiser doesn't approach it that way then underwriting immediately will require it anyway.

Now, we can sit back and see if I am correct or not. IF the original poster here ever posts what happened. Because I am going to say that IF the client, and intended users, are properly notified that this house has no market acceptable floor coverings at all..... that there will either be a loan holdback or no loan at all until the floor coverings are installed.