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FHA/older Home

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BR549

Sophomore Member
Joined
Aug 6, 2002
Professional Status
Licensed Appraiser
State
Texas
I hope all you veterans can help me. I have a home build around 1950, purchaser declined to get a home inspection, because "he knows what is wrong with it, and after the purchase is going to fix everything"

I explained the facts of FHA life to the realtors involved, that the repairs have to be done BEFORE closing.
Problems
1. Unable to inspect crawl space, 8 foot drop off with no way out( I do not carry a ladder around)
2. Roof looks iffy
3. No hot water in bath faucet( owner says the line is just kinked up)
4 Lukewarm water in the kitchen(owner is running washing machine) 30 gallon hot water heater/ low water pressure from toilet
5. Pull down the attic stairs and they fall apart, and the owner holds them together while I do an inspection
6 the windows are old and the paint is peeling from them
7 windows open, but not easily from the inside.
8 brick stairs out side ,3 steps but only 18 inches high,(is this sufficient?) a few of the outer bricks are broken
9 crawl space door has fallen off.
10 cement floor in an addition area with worn out painted floor.
Now HELP. I am the bad guy here all the way around, because I said if there was no home inspection, I was going to call for plumbing inspection, roof inspection, and foundation certification,
Mortgage company told me that XXXXX never writes ANYTHING up, blah blah blah, she has been doing FHA for 30 years, I replied that I was not under the understanding that experience was a valid reason for non compliance.I have been doing FHA for two years.
I would really like your advise on #1 Am I too picky really??
and also your advise on how to address the above problems, they have agreed to do the home inspection report and I should get a copy on Monday.Thanks in advance for your experienced responses
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Stacey,

Geez...don't you know it's always the FHA appraiser's fault that the house needs repairs. :blink: :blink: It's never the owner's fault...they're all "as-is." The buyer is always going to fix them after closing. How many times have I heard that story....

Now as to your mortgage company friends...please tell them that they are directly responsible for the actions of their lender-selection appraisers. If the appraiser screws-up, they will be held accountable by HUD and they may lose their DEU privileges...and that's an embarassment that most don't want to happen to them.

So let's go to your questions:

1) I don't fully understand an 8' drop off in a crawl space? but if you can't inspect ANY area in an FHA appraisal: room, closet, basement, crawl space, attic..the home is a reject until the owner provides access to that area for you. You can complete the report but it's not going anywhere until you go back and look...so why do it twice??? You also have the right to add repairs if more are necessary after you view the area. You DO need to carry a ladder for FHA appraisals. There is no excuse for not inspecting all areas, even if it requires a ladder to get there...like attics with scuttles.

2) Give them an excuse to call for a certification... like cupped/missing shingles. Granules worn off....etc Just note whatever you observed that made you think the roof was "iffy."

3&4) No hot water?? Got to have hot water. It's a HUD requirement. Call for a certification of the plumbing system. Plumber to state that the existing system is adequate to deliver hot and cold water to each fixture.
5)Fix the existing attic stairs-safety issue- or you could call for the removal of the stairs and for a scuttle panel to be installed. I'd go for fixing the stairs as the buyer is probably expecting stairs to the attic.
6&7) Call for the windows to be made operational. And for the correction of the assumed peeling lead base paint as per VC 12. Can't have peeling/chipping paint ANYWHERE in a home built prior to 1978, inside or out.
8) HUD states 3 or more risers. I was always taught over 3 risers. The VC sheets says Steps without handrails..yours have no handrails..I'd go for the handrails.
9) Replace crawl space door and make operational. Prime and paint, if necessary. Yep, they will install a bare wood door on it if you give them the chance..
10) Is the painted floor in a heated, living area? If so, you may want to call for a proper finish flooring to be installed. If it is in an unfinished area, you still have a problem as the home was built prior to 1978. If there are any signs of peeling/chipping, then it has to be corrected as per VC 12.

You are not the bad guy. Never think like that. You're only a known bad guy when HUD catches you on a review for not listing all repair items. Do your job as you have listed above.. Clients come and go, especially the ones that play games..HUD will eventually kill them off.


Ben
 

Pam Wyant

Senior Member
Joined
Feb 12, 2003
Professional Status
Certified Residential Appraiser
State
West Virginia
Another of my pet peeves. The realtors should know when a house needs numerous repairs it won't go FHA. So they should find a house that doesn't need a lot of repairs for FHA buyers or let the owner know when the contract is presented that the house will require numerous repairs for FHA financing. In my realtor days, I recall we were supposed to talk to the buyer about how they were financing, how much of a down payment they had, etc. so it shouldn't be a surprise that the buyers are going FHA.

You can also let the lender know you don't have to require the repairs... IF the buyers decide not to go FHA. If they don't have enough money not to go FHA they probably don't have enough to make repairs afterwards.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
That house is a reject for FHA, VA, and most conventional loans. Just report what you see and let the cow chips fall where they may. You can't make chicken soup out of chicken poop!
 

Darrell Hignite

Sophomore Member
Joined
Jul 16, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
Stacy,

If you have been doing FHA for two years, you should need no help, but you need to know the 4150.2 handbook and I'm glad you asked for help if you don't know better. It's very very obvious that this home is a reject. You must do the work and have thick skin....All appraisers must have thick skin because you have to do what is right. Then after you do it, get a handbook and leard how to do an FHA appraisal...They are available from lenders and from HUD. If you can't fine one, I'll even send you one. Good luck. :D
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
You can access the 4150.2, FAQs, National HOC Reference Guide and other good stuff at:

http://www.HUD.gov

Arrow down on the right to appraisers, click on appraisers and then just start clicking on each entry, printing out what you find interesting. The 4150.2 is the basis for all FHA appraisals, FAQs makes changes to the 4150.2 and the HOC Reference Guide is the most recent changes to the 4150.2--so have lots of fun!
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Pull down the attic stairs and they fall apart, and the owner holds them together while I do an inspection
That it where I would have drawn the line. Sorry, but if the ladder is not safe enough without being held together, I'm outa there. I don't get hazard pay........ REJECT!!!!
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Actually guys,

I have to correct myself. The home is not truly a reject. . the appraisal can be done and submitted to the lender with a VC condition that requires the owner to provide the appraiser with access to the crawl space. It will be in reject status until Stacey can go back to inspect the crawl space. She can then add more repair requirements, if she sees them and/or modify the value, if necessary. It's just in limbo until Stacey goes back. If access is not given to Stacey to inspect the crawl space, the lender will reject the property. That can be confusing to the buyer and the seller. But it is doable that way, if you want to get the invoice in sooner.... :D

Me, I like 1 HBS and 1 set of VC Sheets...so they have only one with the MPS repairs listed...

Yep, if they have two sets, they'll use the one with the least repairs, then play dumb the day before closing when you show-up for the repair inspection.

So I should have stated with a little more clarity..that I would hold onto the report until I had access to the crawl space.... to do the complete inspection of the property.

Ben
 

Pam Wyant

Senior Member
Joined
Feb 12, 2003
Professional Status
Certified Residential Appraiser
State
West Virginia
Actually, If I remember correctly, the procedure for no crawl space access is to mark all crawl space items as needing repair if you can't access it, and then on the second inspection if there is no side issue (dampness, etc), pass it then. Does anyone else recall this?
 

BR549

Sophomore Member
Joined
Aug 6, 2002
Professional Status
Licensed Appraiser
State
Texas
Thanks ALL for your input, and Darrell, I do in fact read the handbook like a bible every time I do an FHA appraisal, most of my FHA work is mobile homes and new cookie cutter homes. I just needed your reinforcement and advise on how to specifically call these repairs. WHen the mortgage company and realtors started in on me about killing their deal, I felt like maybe I was being too picky. I felt all these repairs were important, which is why I asked for all your advise. You all have confirmed for me that I AM not too picky, and I appreciate it, I still will appreciate additional comments throughout the week before I go back for the final(if there is one)
One more question, can the paint on the windows be scraped off, or do they need to test for lead paint.(all I can find in the handbook is that it is a condition)
Thanks to all (I am on my way to purchase a ladder and a HIGH beam flashlight.
Stacy
 
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