Issue with shed

[KatK]

I’m in a holding pattern for a purchase of a home that has an older 12x16’ shed at back of property. Appraisal is conditional on removal of it. While there is areas of water and rot, the framing is not compromised and it’s a well built shed. I removed all rotted exterior panels and problem roof areas leaving frame exposed and replaced rotted flooring. I was planning on rebuilding after purchase. Appraiser is telling me since it was originally an enclosed shed it needs to be rebuilt as one(this was not communicated by lender) or torn down. This has already moved the closing date back and now I am running out of time. Myself and lender asked if it could be classified as an open air shed or even a pergola or gazebo but now appraiser is putting it on the lender saying they’re the ones who can waive it or put in writing that they accept it as something different. I feel like I’m getting the run around and don’t understand that if the rotted areas that were a safety concern were removed why can’t it be signed off on and why is he requiring it to be rebuilt especially if it has no bearing on property value and considered personal property? Why is he making such a big deal over a shed? It’s a conventional loan not an FHA that have more strict regulations. Am I at the mercy of the appraiser on this?

 

[alebrewer]

You can solicit your lender for a 2nd appraisal, and if your lender determines the appraiser is, in fact, being obtuse, they may grant one. As regards getting the appraiser to remove the condition - that's generally not a successful strategy as the appraiser could report the lender to CFPB for trying to 'steer' him/her.

 

[chad hampton]

Lenders call. I don’t know why sheds are that big of a deal but for some lenders they are. I will take a picture of them and note their existence, but generally they don’t have much value. 12 x 16 is a pretty good size though. Unless it is completely falling over, I don’t know why the lender would call it a safety concern. Best of luck.

 

[Vermonter]

Did the appraiser state why the removal was necessary? Health and safety? Negative impact on value?

If he conditioned the removal for health and safety, he needs to state what was unsafe. Just keep pointing out inconsistencies to your lender. Hopefully they see the issue and can figure out a solution

 

[Surf Cat]

I’m in a holding pattern for a purchase of a home

I removed all rotted exterior panels and problem roof areas leaving frame exposed and replaced rotted flooring. I was planning on rebuilding after purchase.

While I agree with you that the shed should not hold up the purchase..... why are you working on something that's not yours yet? Are you buying the property from a family member and or friend?

Sounds like the appraiser made it a health and safety issue. It should have nothing to do with the main dwelling and value.

 

[CGinMN]

The appraiser must "identify and describe physical deficiencies that could affect a property’s safety, soundness, or structural integrity." So the appraiser is interpreting that this applies to the shed. To my knowledge, Fannie and Freddie don't provide clarity on whether sheds need to meet the safety/soundness/structural requirements. Some appraisers would call this out, others would not.

The lender can overrule the appraiser's condition if they feel it is incorrect, or get a contractor's opinion to support that it is not a concern. The reality is, nobody -not Fannie, the lender, or the appraiser - wants to own the risk. You can blame the appraiser for this, that's usually what everyone does, but the lender could just as easily resolve this if they wanted.

 

[J Grant]

I’m in a holding pattern for a purchase of a home that has an older 12x16’ shed at back of property. Appraisal is conditional on removal of it. While there is areas of water and rot, the framing is not compromised and it’s a well built shed. I removed all rotted exterior panels and problem roof areas leaving frame exposed and replaced rotted flooring. I was planning on rebuilding after purchase. Appraiser is telling me since it was originally an enclosed shed it needs to be rebuilt as one(this was not communicated by lender) or torn down. This has already moved the closing date back and now I am running out of time. Myself and lender asked if it could be classified as an open air shed or even a pergola or gazebo but now appraiser is putting it on the lender saying they’re the ones who can waive it or put in writing that they accept it as something different. I feel like I’m getting the run around and don’t understand that if the rotted areas that were a safety concern were removed why can’t it be signed off on and why is he requiring it to be rebuilt especially if it has no bearing on property value and considered personal property? Why is he making such a big deal over a shed? It’s a conventional loan not an FHA that have more strict regulations. Am I at the mercy of the appraiser on this?

If FHA, it must be removed, conventional loan, idk why the appraisal made it subject to removal. There might be a reason impossible to say on a bb.

When a borrower applies for financing, then the loan can be subject to certain conditions. That is not the case when paying cash.

 

[Terrel L. Shields]

Fannie and Freddie don't provide clarity on whether sheds need to meet the safety/soundness/structural requirements.

Exact problem. They'd have 40 years to address the issue with a simple statement and don't.

As for "conventional" there are 2 kinds of conventional loans. Any loan is a conventional loan thru a bank. But secondary market is a conforming loan and loans held by the bank are non-conforming. It should not be an issue at all for non-conforming.

If FNMA et al, then I would call out the appraiser on it and demand that they provide the exact verbiage in FNMA's selling guide. I bet they'd be hard pressed to find it. I'd bet they never actually looked it up only relied upon what they thought it meant or someone told them when they were training.