Questions - Subject to Repairs - LO's Raising Contract Sales Prices

[larryrebecca]

FHA Subject to Repairs - mention item in condition of subject section, estimate cost to repair, check "subject to repairs" second page, no deductions from any approach correct? Then we go back and do final inspections after repairs are done? like "subject to plans and specifications" for a proposed house? correct?

Basically we don't have any deferred maintenance deductions because these lesser items fall under cosmetic? thus, no deductions for repairs in an FHA report?

Also, anyone had any LO's increasing sales contracts over the actual sales price in order to minimize the buyers out of pocket expenses by hoping that the appraiser will buy into the fake sales price and appraise the house for the higher sales contract amount? I just had one of these situations happen.

Thanks,

 

[larryrebecca]

Another Item - Open Water Well

I just completed an appraisal whereby the owner directed me to a piece of metal siding laying on the ground just 5 feet off the back porch where when lifted it revealed a 3' wide 20' deep water well about half full with water. Man that crawled all over me!!! I'm making this a safty item and calling for either a housing or cap be placed on the well. No pumps are hooked up. Its just an open well. Can it be this close to the house? I'm checking "subject to repairs" and estimating a cost to cure the item. No deductions from any approach correct? thanks

 

[The Sheriff]

Definitely a safety issue... I would be on the phone with the appropriate HOC in the morning... 1-800-Call-FHA. CYA!

Also check out 4150.2 appendix D. If you place it in a search engine, the pdf will come up for it and you can read through it on how to handle various issues in the report. It is very handy!

 

[liberated]

The homeownership center reference guide index is also helpful. An appraiser at HUD's homeownership office referred me to this when I had a problem.

http://www.HUD.gov/offices/hsg/sfh/ref/hsgrindx.cfm

 

[Mike Boyd]

I just completed an appraisal whereby the owner directed me to a piece of metal siding laying on the ground just 5 feet off the back porch where when lifted it revealed a 3' wide 20' deep water well about half full with water. Man that crawled all over me!!! I'm making this a safty item and calling for either a housing or cap be placed on the well. No pumps are hooked up. Its just an open well. Can it be this close to the house? I'm checking "subject to repairs" and estimating a cost to cure the item. No deductions from any approach correct? thanks

Yes to all...................

 

[larryrebecca]

Thanks everyone for answering my questions.

Thank you.

 

[RSW]

FHA Subject to Repairs - mention item in condition of subject section, estimate cost to repair, check "subject to repairs" second page, no deductions from any approach correct? Then we go back and do final inspections after repairs are done? like "subject to plans and specifications" for a proposed house? correct?

Basically we don't have any deferred maintenance deductions because these lesser items fall under cosmetic? thus, no deductions for repairs in an FHA report?
Also, anyone had any LO's increasing sales contracts over the actual sales price in order to minimize the buyers out of pocket expenses by hoping that the appraiser will buy into the fake sales price and appraise the house for the higher sales contract amount? I just had one of these situations happen.

Thanks,

I'm not clear on your statement about, basically we don't have any deferred maintenance deductions because these lesser items fall under cosmetic?

Cosmetic items are to be reported and adjusted in the sales comparison analysis under condition to the comparable sales.

 

[larryrebecca]

Cosmetic items

Costmetic items are to be described in the condition of the improvements with no estimate of a cost to cure and no deduct from the market or cost approach for the cost to cure it or them? is that what your saying? I thought cosmetic items affected your overall condition rating of the subject property and thus entered that in the grid, i.e. fair, average, good, etc. Not -$1,000 for the carpet being bad and the wall damaged? right. Thanks, Larry