Should This Home Pass An FHA Appraisal As C3?

[EdinBama]

the appraisal is for the intended user, the client who hired the appraisers, not for the seller, the buyer, the agents or anyone else involved in the transaction. it is not a home inspection and should not be relied upon one as such. if the seller wants to make assumptions based on a copy of a report performed for mortgage lending purposes they received from the buyer, because the client who hired the appraiser (intended user) will not give a copy to anyone but the borrower, then that is on the seller and by extension the buyer and no one else.

You are correct, it is not an inspection, BUT there are MPR & MPS that MUST be met. If I am incorrect, please point me to documentation that contradicts Minimum Property Requirements & Standards that are required for FHA approved funding. So in that sense, it IS a general inspection as well, otherwise as an appraiser you would have no cause to have to rate the property based upon it's condition and maintenance level.

 

[Deleted member 134708]

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RE: attachment 31829

Judgment: Using all caps means the appraiser is on their way out of the biz, not on the way in or middle. They are not staying up to date and do not care, they are cashing checks until the state comes calling.

Fact: FHA will give them a little spanking because a head and shoulders observation of the attic or crawl space is not allowed anymore unless the appraiser stated "due to limited access scuttle....a head and shoulders was performed"

From what I see, they are doing the attic/crawl space inspections from the old handbook. If they aren't doing this part correct, I'd suspect everything else.

 

[Artemis Fowl]

...as an appraiser you would have no cause to have to rate the property based upon it's condition and maintenance level.

Erm...
Rating condition and maintenance level is pretty integral to most valuation problems.

EDIT: Re-reading this to interpret as a pass/fail rating of MPR/MPS.

 

[TRESinc]

You are correct, it is not an inspection, BUT there are MPR & MPS that MUST be met. If I am incorrect, please point me to documentation that contradicts Minimum Property Requirements & Standards that are required for FHA approved funding. So in that sense, it IS a general inspection as well, otherwise as an appraiser you would have no cause to have to rate the property based upon it's condition and maintenance level.

no, it is not a general inspection. it is an appraisal. the two are not interchangeable. yes there are minimum property standards for an FHA appraisal but it is not an FHA home inspection, hence the name. did the appraiser in your case miss some items? it would appear so, but like any other profession in the world appraisers are not infallible.

you stated you made an agreement with the seller to let the appraisal serve as a basis for needed repairs and that was your first mistake as it is an appraisal and not a home inspection. similarly asking someone on here to perform a review of your appraisal highlights that you don't really know much about the appraisal profession or how it operates. i typically charge double for a review vs a standard appraisal as there is considerably more work involved. if you want the report reviewed then hire a local appraiser who is familiar with your market to do so. bear in mind the results of that review will have no impact on your appraisal or purchase as far as FHA is concerned. if you feel there are inefficiencies with the report there are proper channels to go through to voice your concerns, however an online forum is not one of them.


-edit-

forgot to add this part...

fwiw you are not alone. i purchased my 56 year old home 3 years ago and it had not had a single update in 20+ years. i removed everything right down to the studs including the 18" plaster boards (built before drywall was prevalent). i replaced subfloors, all new plumbing, all new electrical, all new HVAC (except the ducts), added cac, new roof, new windows, new flooring, new kitchen, new baths, new lighting and fans, new sump, etc etc. aside from the studs, foundation and aluminum siding everything in the house was brand new. i refi'd after the construction was complete and the appraiser rated it as a C3.

 

[EdinBama]

no, it is not a general inspection. it is an appraisal. the two are not interchangeable. yes there are minimum property standards for an FHA appraisal but it is not an FHA home inspection, hence the name. did the appraiser in your case miss some items? it would appear so, but like any other profession in the world appraisers are not infallible.

you stated you made an agreement with the seller to let the appraisal serve as a basis for needed repairs and that was your first mistake as it is an appraisal and not a home inspection. similarly asking someone on here to perform a review of your appraisal highlights that you don't really know much about the appraisal profession or how it operates. i typically charge double for a review vs a standard appraisal as there is considerably more work involved. if you want the report reviewed then hire a local appraiser who is familiar with your market to do so. bear in mind the results of that review will have no impact on your appraisal or purchase as far as FHA is concerned. if you feel there are inefficiencies with the report there are proper channels to go through to voice your concerns, however an online forum is not one of them.


-edit-

forgot to add this part...

fwiw you are not alone. i purchased my 56 year old home 3 years ago and it had not had a single update in 20+ years. i removed everything right down to the studs including the 18" plaster boards (built before drywall was prevalent). i replaced subfloors, all new plumbing, all new electrical, all new HVAC (except the ducts), added cac, new roof, new windows, new flooring, new kitchen, new baths, new lighting and fans, new sump, etc etc. aside from the studs, foundation and aluminum siding everything in the house was brand new. i refi'd after the construction was complete and the appraiser rated it as a C3.

Then as an appraisal only, based upon the standards an FHA appraiser is bound to by stated guidelines, the appraiser has done his due diligence in your mind. Understood.

As for this forum, fine, lets stick to THE question I asked. Based upon the actual photographic evidence as provided by an inspection, can YOU as an appraiser state whether this home should be rated as C3 if you were to have appraised it yourself?

 

[TRESinc]

Then as an appraisal only, based upon the standards an FHA appraiser is bound to by stated guidelines, the appraiser has done his due diligence in your mind. Understood.

As for this forum, fine, lets stick to THE question I asked. Based upon the actual photographic evidence as provided by an inspection, can YOU as an appraiser state whether this home should be rated as C3 if you were to have appraised it yourself?

i never said a thing about due diligence. in fact what i did say was:

did the appraiser in your case miss some items? it would appear so, but like any other profession in the world appraisers are not infallible.

you are in the middle of one of the problems of the absolute UAD rating system - one appraiser's C3 is another appraiser's C4. i did not personally inspect the property so i cannot give an opinion based upon on a few photos posted to an online forum. i could argue it to be a C3 or a C4 based on the definitions.

C3
The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every
major building component, may be updated or recently rehabilitated. The structure has been well maintained.

are the items pictured due to normal wear and tear? they could easily be so. have some component been updated? can't answer that as i don't have all the facts from my own inspection, but it is quite possible. has the structure been well maintained? define well; again, i would have to personally inspect to form an opinion.

C4
The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been
adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building
components have been adequately maintained and are functionally adequate.

is there some deferred maintenance and physical deterioration? it would appear so, at least in some areas of the house, but is that enough to call the entire structure the same thing? has it been adequately maintained? can't answer that until i inspect the entire structure. are the repairs minimal or cosmetic in nature? it would appear so but i am not a roofing or mold expert and to state a fact without the proper training would be erroneous. are all major components adequately maintained and functionally adequate? again, can't give an answer when i haven't personally seen the property.


the odds are leaning towards a C4 rating but as stated that is open to interpretation, easily arguable either way and would be dependent on a personal inspection.

 

[EdinBama]

i never said a thing about due diligence. in fact what i did say was:


are the items pictured due to normal wear and tear? they could easily be so. have some component been updated? can't answer that as i don't have all the facts from my own inspection, but it is quite possible. has the structure been well maintained? define well; again, i would have to personally inspect to form an opinion.



is there some deferred maintenance and physical deterioration? it would appear so, at least in some areas of the house, but is that enough to call the entire structure the same thing? has it been adequately maintained? can't answer that until i inspect the entire structure. are the repairs minimal or cosmetic in nature? it would appear so but i am not a roofing or mold expert and to state a fact without the proper training would be erroneous. are all major components adequately maintained and functionally adequate? again, can't give an answer when i haven't personally seen the property.


the odds are leaning towards a C4 rating but as stated that is open to interpretation, easily arguable either way and would be dependent on a personal inspection.

Thank you for the honest feedback. However, I believe you may have contradicted yourself with your own words as highlighted, italicized, and underlined in the quotes above. So it is kind of an inspection?

 

[Mike Kennedy]

There is no water damage showing through, and the ceiling is smooth drywall. As for the white, it is mildew best I can tell. The water appears to be minimal leakage over time, and the insulation looks like it is compressed directly below, leading me to believe the water generally gets absorbed in small amounts and dries out. The seller was clueless, and as a mortgage broker he felt that he shouldn't have to repair anything a "certified FHA appraiser" didn't note on his appraisal. I convinced him otherwise and he is providing repair credit at close.

I am disappointed that the appraiser didn't note anything and rated it so well. I will see if I can drop the inspection report and appraisal in a drop box if anyone is interested in seeing and reading for evaluation. I really just want to feel somewhat vindicated by professionals that I am not crazy in assuming this is a subpar appraisal. I have no issue with the valuation.

Based on the Post 20 photos - obtain your owner Building/Structural Engineer's Inspection report or walk away and buy another house.

 

[TRESinc]

Thank you for the honest feedback. However, I believe you may have contradicted yourself with your own words as highlighted, italicized, and underlined in the quotes above. So it is kind of an inspection?

no, i didn't. the word "inspection" encompasses a lot, and what applies to one situation does not necessarily apply to another. i am an appraiser and i can perform an inspection for appraisal purposes. i am not a home inspector and i am not qualified to perform an inspection for that purpose. as an appraiser one would look at the roof from the ground but a home inspector would (typically) go up on the roof and perform a different type of inspection. that is a prime example of why one should not rely on an appraisal, FHA or not, to replace a home inspection. the two are not interchangeable.

i could inspect the brakes on your car and tell you they are fine but a mechanic could tell you that the rotors, pads and calipers need replacement. two parties "inspected" the braking system but the results were vastly different because they were performed by people with different skill sets.

 

[EdinBama]

no, i didn't. the word "inspection" encompasses a lot, and what applies to one situation does not necessarily apply to another. i am an appraiser and i can perform an inspection for appraisal purposes. i am not a home inspector and i am not qualified to perform an inspection for that purpose. as an appraiser one would look at the roof from the ground but a home inspector would (typically) go up on the roof and perform a different type of inspection. that is a prime example of why one should not rely on an appraisal, FHA or not, to replace a home inspection. the two are not interchangeable.

i could inspect the brakes on your car and tell you they are fine but a mechanic could tell you that the rotors, pads and calipers need replacement. two parties "inspected" the braking system but the results were vastly different because they were performed by people with different skill sets.

Good enough. My actual inspection report told me everything I need to know, and is my basis for repairs I will perform on the home. However, I do believe a good appraiser would have noticed the issues on the exterior ground level of the home, and noted at least a few.