• 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.

Question About An Upcoming Appraisal

Status
Not open for further replies.

Xzundra

Freshman Member
Joined
Mar 5, 2018
Professional Status
General Public
State
Pennsylvania
Hello,
My husband and I are first time home buyers. My husband is wounded veteran and we recently signed an agreement to purchase a house.
In our contract we had the seller drop a significant amount off his asking price due to some unfinished work in the home. The owner is a former architect/contractor who built his own home. His children and wife are currently living in Tennessee while the house has been on the market for 2.5 years, so he has been living out of one of the rooms here in PA till the house sold. We live in a pretty rural area made up of mostly farm land. As a result of the seller coming down significantly in the asking price. We agreed that if there were any preparations that needed done to the house for it to pass the appraisal we would take care of the cost. My father in law is a contractor and already went through the house twice and gave us estimate on the remaining work that needs done etc. It is not much. All of the main living areas are finished. The living room needs trim around the windows and above the fire place needs finished. The basement has an indoor pool which was added as an addition to the back of the house with 2 rooms on either side and plumping was ran for a bathroom down there, there is a toilet, but the walls were not finished in just the said bathroom. The beams are all there but no dry wall yet. Everything is enclosed though.. Otherwise the house is easily livable.

We have decided instead of doing a FHA VA loan due to the work that still needed done (we knew there was no way the unfinished basement would pass their inspections or meet their standards, that we would do a conventional 97 through USAA instead. Here is my question that no one can give me a real answer to. The pool room that was added on. There is no siding on the outside yet, and a small corner of the house itself, the siding needs finished. Is this grounds to fail an appraisal for conventional through USAA? As far as I have read the appraisal just involves verifying the house and lands value vs the amount we are financing. But I read they can also look at possible safety hazards. So do we have to make sure we finish the siding and the railings before an appraiser comes out, or could the house still pass and we could do it after? I would really hate to think it will be fine, and then have it fail and have to pay again to have a re inspection done and delay our closing. I just don't know what to do? I am hoping someone will have some answers for me. My realtor has never done an FHA or Conventional with USAA as the lender, so she really wasn't much help

Thank you in advance
Xzundra
 

Xzundra

Freshman Member
Joined
Mar 5, 2018
Professional Status
General Public
State
Pennsylvania
I really need advice, not trolls...
 

CindyR

Senior Member
Joined
Oct 26, 2003
Professional Status
Certified Residential Appraiser
State
Arizona
be sure your lender is aware of all the deficencies before you proceed. the lending decision might be influenced by how much money you are putting down. aren't there some kind of rehab loans where the lender helps finance the required corrections?
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
The pool room that was added on. There is no siding on the outside yet, and a small corner of the house itself, the siding needs finished. Is this grounds to fail an appraisal for conventional through USAA? As far as I have read the appraisal just involves verifying the house and lands value vs the amount we are financing. But I read they can also look at possible safety hazards. So do we have to make sure we finish the siding and the railings before an appraiser comes out, or could the house still pass and we could do it after? I would really hate to think it will be fine, and then have it fail and have to pay again to have a re inspection done and delay our closing. I just don't know what to do? I am hoping someone will have some answers for me. My realtor has never done an FHA or Conventional with USAA as the lender, so she really wasn't much help

Thank you in advance
Xzundra

The house may or may not pass inspection for a conventional loan. When I say "inspection", what I mean is that the appraiser may determine that what is unfinished needs to be completed for (as you identify) health and safety reasons.
Also, understand this: There are two entities that are going to determine if the condition of the home, as-is, meets the property requirements for the loan. The first will be the appraiser, and the appraiser will use his or her judgment based on their understanding of the lender guidelines and their experience and knowledge within your market. The second is the lender; because even if the appraiser concludes that the conditions are not health/safety issues, they will report those conditions in the appraisal and the lender could require it to be done anyway.

In my opinion, the choice is easy: Repair or complete the items you think could be a problem before your appraisal. This way, you've taken whatever steps you think are reasonable to ensure the condition of your property will not be a challenge for your loan.

Good luck!
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
I really need advice, not trolls...
Excuse me Captain Serious.

I love how people come to a place for help and demand that they get your undivided attention, at no cost...and don't you dare chuckle.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Missing siding is an epic fail for any loan except a rehab loan that includes the costs to make the repairs. FHA 203k, Fannie Mae Homestyle Renovation Loan etc.
 

Xzundra

Freshman Member
Joined
Mar 5, 2018
Professional Status
General Public
State
Pennsylvania
The house may or may not pass inspection for a conventional loan. When I say "inspection", what I mean is that the appraiser may determine that what is unfinished needs to be completed for (as you identify) health and safety reasons.
Also, understand this: There are two entities that are going to determine if the condition of the home, as-is, meets the property requirements for the loan. The first will be the appraiser, and the appraiser will use his or her judgment based on their understanding of the lender guidelines and their experience and knowledge within your market. The second is the lender; because even if the appraiser concludes that the conditions are not health/safety issues, they will report those conditions in the appraisal and the lender could require it to be done anyway.

In my opinion, the choice is easy: Repair or complete the items you think could be a problem before your appraisal. This way, you've taken whatever steps you think are reasonable to ensure the condition of your property will not be a challenge for your loan.

Good luck!

Thank you Denis,
We will go ahead and proceed to get the siding done then to be safe. We have been transparent with the lender and told them during the pre-qualifying period that the house was considered unfinished. That is why we were advised to go with a conventional instead of VA FHA which would of ultimately given us a better interest rest, and less costs. But we see the potential the property has when finished, so that is why we went the route we did. Thanks for the advice.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
VA does also have a rehab loan program. I see your reasoning for not wanting a rehab loan to a degree, but the appraised value with a rehab loan will be based on the finished product after repairs (not as is with conventional loan) and the funds are provided to go ahead and get it done now rather than have it potentially languish as you try to come up with the funds little by little over time. My 2 cents.
 
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