FHA Handbook Inspection Requirements And Fee

[Tejus]

This is the best suggestion I've seen for the FHA Inspection and assignment fee after listening to the Sep 29 FHA webinar, big attaboy to JTip.

I liked the fella giving the presentation. "Just use your best judgement, if the fridge is getting cold then it probably works." "Just put your hand on the hot water tank to see if it's getting hot (utilities just got turned on)". Right.......

Note to self: See if E&O will pick up coverage for an exploding hot water tank that I said was 'fine and dandy'.

Glad I passed on that FHA assignment today. I don't think $600 is enough.....maybe a grand and sub out a home inspection for $300 to cover my rear......

Since FHA is requesting a home inspection, give them one. Hire a home inspector to perform the home inspection and include the home inspection report with your appraisal.

As identified in the webinar, use your own judgment to hire the home inspector to meet the FHA inspection requirements and remove your liability. Include the additional cost in your fee.

The assignment fee is your appraisal valuation fee + the home inspection fee + your mgmt fee.

 

[KeyWhiz]

Why not add another $50 so you and the home inspector can get a couple of burgers and beers while you're at it? Make it another $250 since we will probably go to a strip club?

 

[dobie]

These new rules present a minefield of potential uninsured liability with a target clearly painted on our backs.
I'll pass on future assignments

 

[JTip]

big attaboy to JTip.

Whoo hoo!!!! Thank you.

Add another full week (7 days) to allow the home inspection to be complete (at his/her schedule) and ample time to review and report results.

Seems like it would be a superior 'total' product, exactly what HUD is looking for (expecting from a 'professional') and puts the homeowner at ease.

 

[Peter LeQuire]

I get that a home inspector is more practiced looking for defects. But, while an appraiser can certainly incorporate a home inspection into an appraisal, or do the appraisal with an inspection as a requirement, I don't think that HUD will allow an appraiser to slough off the responsibility for determining a property's conformity to its property requirements to a home inspector.

 

[Mr Rex]

I get that a home inspector is more practiced looking for defects. But, while an appraiser can certainly incorporate a home inspection into an appraisal, or do the appraisal with an inspection as a requirement, I don't think that HUD will allow an appraiser to slough off the responsibility for determining a property's conformity to its property requirements to a home inspector.

There are many things that are required to be in the "summary" section on a Home Inspection that are not FHA MPR required repairs. Since I do both, I often have had to edumacate FHA and USDA underwriters that FHA MPR and a HI summary page are not the same thing.

 

[Tejus]

I agree a Home Inspection is not identical to an FHA Appraisal Inspection, but it is the most similar alternative that I know of.

I would still perform my "best judgment" inspection for spot testing utilities/appliances, head/shoulders attic/crawlspace, peeling lead paint, general issues, etc and write up my results. My inspection follows the FHA recommendation of "use your best judgment".

I'd use the Home Inspection to cover the areas which are outside the appraiser's area of expertise. I've included a copy of the Tx Real Estate Commission Property Inspection Report, REI 7-5, which is used by the Home Inspectors. I'd include comments in the appraisal report if there were issues identified in the Home Inspection report.

I'd also include comments in my report which:
- Identify the scope of my "best judgment" inspection
- Identify a Home Inspection by a state licensed Home Inspector was also performed due to the many FHA appraisal inspection requirements which are outside an appraiser's expertise.
- Identify the Home Inspections in my state are performed to the Tx Real Estate Commission (TREC) standards and are the industry standard for Home Inspections in my state.
- Identify the entire scope of the inspection was the sum of my "best judgment" inspection and the Home Inspection scope.

This may not cover every detail in the FHA Handbook appraisal inspection requirements, but would show that you've made every effort possible to comply with the FHA appraisal inspection requirements and disclosed what you've done.

If an appraisal inspection issue occurred after your appraisal, you could defend yourself by showing you performed your "best judgment" inspection and also an industry std home inspection.

 

[PhillyApp]

Completing my first FHA, post 4000.1. I beefed up my Scope to included the fact that FHA does not provide specific guidance on Appliances, etc, but clearly notes that appraisers are not home inspectors, nor expected to be. Noted that buyers are not intended users and specifically warn that they should not use this report specifically the areas concerning appliances, roof and mechanical systems. Reiterated "Get a Home Inspection" and noted that the form, which is an FHA requirement is evidence that the intended user does not expect the report to act as a home inspection. Removed all references to the word Inspection and stated the goal was to Observe, analyze and report.

I am not sure if I will continue doing these assignments, but this is the approach that i took.

 

[Elliott]

Just think if USPAP re-wrote itself, consolidated its AOs and FAQs into USPAP, it would totally freak out 25% of appraisers who would never do another appraisal.

 

[nicholz12]

This is the best suggestion I've seen for the FHA Inspection and assignment fee after listening to the Sep 29 FHA webinar, big attaboy to JTip.



Since FHA is requesting a home inspection, give them one. Hire a home inspector to perform the home inspection and include the home inspection report with your appraisal.

As identified in the webinar, use your own judgment to hire the home inspector to meet the FHA inspection requirements and remove your liability. Include the additional cost in your fee.

The assignment fee is your appraisal valuation fee + the home inspection fee + your mgmt fee.

That sounds like a good idea, but I don't know what bank/lender etc that will pay $800-$1000 for a sf res FHA appraisal.