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Subject has no heat ?

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Tom Foster

Senior Member
Joined
Apr 18, 2003
Professional Status
Certified Residential Appraiser
State
California
Hi,

I'm doing a 1,300 SF 60 year old home in Los Angeles with no heater.

I'm sure it had a heater at one time, but the owner says this is the way he purchased the house a few years ago.

Seems like they removed the wall heater to put up some nice bookshelfs.

The area does not get that cold, but I think there is law that you have to have a working heater so the young and old don't die on a cold night.

I put no heating in the report and the reviewer came back with:

No boxes are marked in the improvement section pertaining to the heat&cooling.

Report states that subject doent have heat and grid indicates there is no 'cooling' system in subject, please put 'none' in space next to boxes--there cannot be any blanks.

As per above, please also state if it is common/typical for area for 'no heat and cooling system'and also state if the livibility is effected.

Will they even fund a loan on a house with no heater ??
 

Lobo Fan

Elite Member
Joined
Nov 28, 2004
Professional Status
Certified Residential Appraiser
State
New Mexico
It depends upon the lender. If it is a private investor, they can loan on anything. If it is FHA or FNMA, I am pretty sure it is a problem. For sure on FHA. I wouldn't worry about it and report the facts as you see them. No heat, unusual for the area. Cost to Cure is $$$$. I see it a lot where a wood stove or a fireplace is the only heat source.

Then you get into the question of whether natural gas is available or if a propane tank must be installed. Usually, if starting from scratch electric baseboard is the cheapest fix. I think the FHA standard is that the heat source must be able to maintain a minumum of 50 degrees.

It doesn't really matter to your appraisal. It is what it is. Whether or not to loan is a decision for others.
 

Steer

Junior Member
Joined
Dec 12, 2007
Professional Status
Licensed Appraiser
State
Maine
Tom,

To me it does not sound typical, and I grew up in Florida, a pretty warm climate. Do the comparable sales and market data offer any insight into possible marketability issues? It could just be a cost to cure, or be completed as a hypothetical condition subject to the addition of a heat pump, etc.

I would talk with your lender in detail after you do some additional research. They generally appreciate good communication on these issues.

Good luck
 

Tom Foster

Senior Member
Joined
Apr 18, 2003
Professional Status
Certified Residential Appraiser
State
California
It's for Bank of America.

I'm going to just explain it the best I can and let the chips fall where they may.
 

Tom Foster

Senior Member
Joined
Apr 18, 2003
Professional Status
Certified Residential Appraiser
State
California
Also , no fireplace, pot belly, or pellet stove either.
 

Tom Foster

Senior Member
Joined
Apr 18, 2003
Professional Status
Certified Residential Appraiser
State
California
I meant Pot Belly Stove !!!.

I have a Pot Belly...but it only puts out enough heat to keep my wife or girlfriend warm.

( but not at the same time )
 

J L H

Sophomore Member
Joined
Oct 3, 2007
Professional Status
Licensed Appraiser
State
Utah
wired solution

Although uncommon, winter nights can fall into the 30's in LA, even an occasional 20ish degree event can happen. I wouldn't worry about pipes freezing in the LA basin, but an unheated 60 year old home wouldn't be comfortable for most, and would be unhealthy for some.

Woodburning stove might be acceptable to some underwriters, but probably wouldn't fly with the air pollution regulators and permit issuers(don't they even have pollution regulations on lawnmowers in LA?!)

Taking out the pretty bookshelves and (re)installing the wall unit would work fine, but might be rather expensive for something you only NEED to run on occasion, especially relative to the value of an older home.

Cheapest and easiest fix would be the electric baseboard(s). Can be installed in hours, adequate to take the chill off an old home, no concerns about fuel or venting, and probably acceptable to most underwriters.
 

Tom Foster

Senior Member
Joined
Apr 18, 2003
Professional Status
Certified Residential Appraiser
State
California
I like the electric baseboards idea.

I have lived in the Orange County / LA area for over 40 years....

I have gone as long as 4 years without using the AC or the heat.

But I was told to run the heat and AC every 6 months to keep moving parts from sticking.
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
Electric baseboard heating in an older house might be a problem because of inadequate electric main. They can find another location for a wall heater that should be sufficient.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
Contrary to Steer who grew up here, right now I have two reports I am working on without heat.

HUD requires that all rooms receive heat but make exceptions for several states and several countiies in Florida. If an FHA California requires heat:

ALL habitable rooms must have a heat source. This does not mean that each room must contain a heating device but that each room must receive sufficient heat. (Exception: Homes located in the Caribbean, Hawaii and the Florida counties of Lee, Charlotte, Glades, Hendry, Palm Beach, Collier, Broward, Monroe and Miami-Dade do not require heat if, the lack of, is "typical" for the market area and does not adversely affect the marketability of the property.

As for Fannie, it would fall under the guidelines for unique or unusual houses. You simply have to prove marketability by finding at least one other comparable that lacks heat. Relatively easy here, but I am sure not so easy there. If you can't, they can't do a Fannie/Freddie loan on it. Normally what I do when I have a house without heat is I research the market for another one or two without heat and if that fails I research the comps to find what types of heating sources are acceptable in the market (i.e., the different types of heat the comps have). I call the client and tell them what I found, what the options are, and the report goes on hold, until they discuss it with the owner.

A major reason it is best to call the lender is because chances are they are going to require a heating source and your report will have to be made subject to heat being installed. You need to know what type of heat is going to be installed, so you can adjust accordingly.

The two houses I have right now without heat are both about 800 to 900sf. I live in an area that generally stays above freezing but we do have our 27 to 32 degree nights (maybe 2 to 5 a year). Wall heaters are sufficient and one owner has agreed to install a wall unit while the other is deliberating between a wall unit and getting an old propane fired space heater back up and working (I don't think it has worked since the 50s).
 
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