• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

I have an open ground on a FHA property

Status
Not open for further replies.

screwmoose

Freshman Member
Joined
Dec 5, 2007
Professional Status
Certified Residential Appraiser
State
Florida
I did a FHA appraisal the other day on an older home, 1968. I use a circuit tester and every outlet that I used it showed an open ground. I was reading my course material from AI and it says that I should have use a little light and not a circuit tester. Should I make a comment in the report and have it checked out by an electrician? I am thinking that I should since it is a safety issue. What does everybody else use to check the electrical? I appreciate the comments.
 

Kevin A. Spellman

Senior Member
Joined
Aug 30, 2003
Professional Status
Certified Residential Appraiser
State
Massachusetts
I would make a statement “a random sampling of the outlets”. Take a picture of the tester in the socket where a defect exists and then one that is working properly. Let the lender make the decision.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Report it and let the underwriter decide?


Why is the concept of reporting things in HUD appraisals reports (or any report for that matter) and letting the underwriter do their job such a hard concept for appraisers to understand?

WE DON"T REQUIRE REPAIRS. The underwriter requires repairs. We just report what we see.
 

Brad Pack

Junior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
California
Report it and let the underwriter decide?


Why is the concept of reporting things in HUD appraisals reports (or any report for that matter) and letting the underwriter do their job such a hard concept for appraisers to understand?

WE DON"T REQUIRE REPAIRS. The underwriter requires repairs. We just report what we see.

WRONG! Mortgagee Letter 05-48 changed very little; mostly the reporting mechanism (body of the report vs. VC forms) of property/location deficiencies. The appraiser is still required to condition the report "subject to" the remediation of a known deficiency or the (expert) inspection of a suspected deficiency.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Addendix D, Page D-5 states:

Electrical System

· Examine the electrical system to ensure that there is no visible frayed wiring, or exposed wires in living areas and note if the amperage appears adequate for the property. · Operate a representative number of lighting fixtures, switches and receptacles inside the house, garage and on the exterior walls and note any deficiencies. If the appliances present at the time of the inspection do not appear to be reasonable (undersized), determine if there is adequate amperage to run “standard” appliances, as per local code.

· The appraiser is not required to insert any tool, probe or testing device inside the panels or to dismantle any electrical device or control.

The key phrase is operate a representative number of....
It also states the appraiser is not required to insert any tool, probe or testing device.

You can if you want to.
 

Tim Schneider

Member
Joined
Feb 8, 2007
Professional Status
Certified Residential Appraiser
State
Wisconsin
I think that the "not insert" refers to the panel, not the outlet. It states the appraiser is to opererate fixtures, switches, and recepticles. How can you operate a recepticle if you don't put something in it to test it?
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
WRONG! Mortgagee Letter 05-48 changed very little; mostly the reporting mechanism (body of the report vs. VC forms) of property/location deficiencies. The appraiser is still required to condition the report "subject to" the remediation of a known deficiency or the (expert) inspection of a suspected deficiency.


That is where I disagree due to semantics. We make the report "subject to" the valuation conditions we report. It is up to the underwriter to require or wave any condition they want. If they want us to follow up with a repair inspection or have an expert inspect, then that is what they/we do. We DO NOT require any repairs, the underwriter does.

I never said we do not make the report "subject to" valuation conditions. I said we do not require the repairs. We are just appraisers and have no power to judge, wave or require enforcement of any "subject to" conditions. Only the underwriter has that power. Especially when it comes to FHA to FHA refinances. We still have the same valuation conditions, but the underwriter can decide what conditions to wave and what to require repairs. I am amazed what some underwriters will wave.

It is semantics, Brad. I don't let RE agents, owners or borrowers blame me for required repairs. It is the property conditions, not me. They are HUD guidelines that we are required to report and make valuation conditions. It is not appraiser required repairs, they are HUD conditions and repairs. I don't decide what needs to be reported, what can be waved and what can not be waved.

For that matter, any other appraisal (Conventional, VA, etc) should be reported the same way. We should report all deficiencies and make it subject to any required inspections or repairs. We still don't control whether they are done or not.

My main concern is that many appraisers are logging in here and asking if they don't have to report property conditions. Report everything for your own protection.

Does a HUD chief get to wear a nice headdress?
 
Last edited:

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
I agree with Tim Hicks. As appraisers we report what we can readily observe and if what we readily observed or do not have the expertise for we mark the appraisal report "subject to" whatever the problem is that doesn't meet minimum property standards or requirements. Then the underwriter has to the responsibility to make some decisions. The underwriter can decide all of those problems have to be repaired or installed or removed prior to presenting the binder to FHA for insurance. Then the borrower/buyer/seller decides whether they want to go to that expense. If the underwriter/borrower/buyer/seller all agree the property is financed with an FHA loan. The appraiser is out of the picture after checking the report "subject to". Or the underwriter can decide they won't bother with any or some of the repairs and in their opinion (not the appraiser) the property does qualify for a FHA loan. Appraiser is still out of the picture. Or the loan officer can decide to find a different loan program that might fit their needs. So they order a new order/assignment from either the original appraiser or a different appraiser--the FHA appraisal is not going to be used for a loan decision, that appraisal assignment is now over and done with and out of the picture. Or the borrower/buyer/seller decide they won't deal with this situation and the loan application goes away.

Appraisers report--other individuals make the decision of what to do about the loan process.
 

ZZGAMAZZ

Senior Member
Joined
Jul 23, 2007
Professional Status
Certified Residential Appraiser
State
California
Every job I complete "subject to" CB3 or CB4 is coming back conditioned for all cosmetic as well as MPS-related issues to be resolved.

This scenario is problematic because most are lender-owned REO's and the banks won't resolve cosmetic deficienices so I devote a lot of non-billable (ostensibly billable) hours explaining to the MB client why the report is what it is, and why I won't/can't revise the report. I lost 2-3 clients in the past months who refuse to give me further assignments because they feel I put them in an untenable situation--by doing my job.

It appears that underwriting serves the dual role of enforcing the client conditions as well as those of HUD. Of course this is none of my concern, but it's obvious that SOMEBODY is doing this work without fully disclosing property conditions.

(It was somewhat refrshing to find out that a 2nd appraiser was sent to do conduct an interior/exterior follow-up of a FHA 4-plex, even though his opinion of value that was lower than mine by approx 5% was based exclusively on active listings regardless that the closed sales were within 30 days of the effective date. I have one question: the follow-up appraisal was conducted by an idependent contractor working for landsafe. In that scenario was the follow-up inspection conducted for HUD, or Landsafe, or does it matter?
 
Last edited:

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
Report it and let the underwriter decide?


Why is the concept of reporting things in HUD appraisals reports (or any report for that matter) and letting the underwriter do their job such a hard concept for appraisers to understand?

WE DON"T REQUIRE REPAIRS. The underwriter requires repairs. We just report what we see.

Because an "open ground" is a serious health AND safety issue. I would report it on ANY report if I found such a situation. It is irrelevant that you did not need to check for this condition. Since you found it, it must be reported and required to be repaired. Even an underwriter cannot over-ride a health and safety repair requirement.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks