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FHA Appraiser Notes Items Not Within Appraisal Guidelines

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Amm115

Freshman Member
Joined
Nov 25, 2016
Professional Status
Real Estate Agent or Broker
State
Michigan
I recently had an appraisal completed on my personal home and the appraiser noted that there were two spots where there was cracked vinyl siding and one spot on the rear that had melted siding from a grill being placed to close. She noted on the appraisal "replace siding with like color". I do not find anywhere in the guidelines that a crack in the siding or melted siding, which seems cosmetic to me, would require repair. Almost all homes I have seen have cracks due to people weed wacking against them. The repair for a crack in siding is typically caulking the siding per contractor, but replace it all, just seems extreme to me?

Secondly she noted that there is a pipe in crawl space that needs to be covered and will most likely freeze in the ground. It is the septic line to the septic system. Most pipes are exposed and it seems that an appraiser being an expert on plumbing is also outside the FHA appraisal guidelines am I incorrect?

Thirdly she noted a railing is required on a step that is 12 inches off the ground. The information I have found in FHA book says its based on local code, which is actually 30".

She did come in under the first appraisal by $3,000 less and I did not argue that. I reviewed the numbers and felt they were all fair other than she did not adjust for lot size at all when it ranged from 1.3 to .34 acres, but in this area that can me minimal and I was not familar with the adjustment so have no grounds for arguement.

I am told by lenders that they are having problems with this appraiser calling out weird, never heard of items regularly. This will most likely kill the deal as we are not replacing the siding on our house for 2 small cracks and melted siding. Am I within my right to report this appraiser to HUD?

Any FHA expertise would be appreciated. Just feel as though this appraisers repair items are outside any guidelines I have read so far and need to determine the next step.

siding and steps photo attached
 

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CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
I disagree with all of what the appraiser did. The siding likely is cosmetic. The pipe to the septic system, if the septic is operating properly, will be empty so there is nothing to freeze. FHA does not require a hand rail for a step.

BTW... The Direct Endorsement Underwriter has the authority to waive repair conditions.
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
It's unfortunate but some of the FHA appraisers have either misread the handbook or they just like to make problems. I disagree with the appraiser she may just be nutty :)
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
One other note... did the appraiser provide an estimate of cost to cure these items?

Okay, two notes... Did the appraiser value the subject as though those repairs were made (e.g. brand new siding for the entire house?)
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Every possible situation is not the purpose of a guideline Handbook. Based on the age and condition of the property, and its market, if the appraiser makes a decision that such a repair is appropriate under the guideline of "marketability" then the lender can either accept or reject it. I've made lots of FHA and non-FHA requirements, most are accepted as necessary by the lenders, but if the lender is not concerned about a relatively minor issue, its their call in the end.
 

Amm115

Freshman Member
Joined
Nov 25, 2016
Professional Status
Real Estate Agent or Broker
State
Michigan
One other note... did the appraiser provide an estimate of cost to cure these items?

Okay, two notes... Did the appraiser value the subject as though those repairs were made (e.g. brand new siding for the entire house?)


She did not provide a value if replaced, only noted in conditions:
The siding is damaged in several areas and needs to be replaced. Examples of the damaged siding is attached.It is noted
that all cracked/partially melted and damage siding needs to be replaced with matching siding.

It is good to know that the final decision is up to the underwriter. I am just frustrated that an appraiser can just put items outside the guidelines of FHA lending rules and possibly ruin a sale. All of this information provided has been very helpful though!
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
If the FHA appraiser makes a repair condition they are required to estimate the cost to make the repair (so-called "cost to cure.") The appraisal must be completed as thought the repair was made on the date of appraisal (this is called a "hypothetical condition.") So the value opinion would be based on a house with all new siding.

Sounds like this appraiser is inexperienced or has not been well-trained and does not bother reading the FHA appraisal requirements. This has become more common since FHA stopped requiring an examination before being placed on the roster of approved appraisers.
 

djd09

Elite Member
Joined
May 20, 2009
Professional Status
Licensed Appraiser
State
Ohio
I agree with the appraiser. Don't want something to come back and bite you. Fix it.
 
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