Utilities must be on per Underwriter--VA

[staceyuw]

I just got stipped by a VA underwriter on a VA purchase I am processing. Stipped for " Appraiser must verifiy all utilities are on and in working order".
I was surprised to see that since I an used to seeing that on FHA appraisals not VA.
So, I called the VA appraiser and he told me that is a FHA stip not VA and he wasn't going to go back there just for that and he has been doing it for 20 years etc. Which I understand and told him so.

I did look up Appraisal Requirements Chapter 11 and didn't see anything that utilities must be on.
Any thoughts/reference material?

Thanks Much!
Stacey

 

[CANative]

The utilities must be on in order to do a complete inspection of the property.

The appraiser doesn't have to state that the utilities were on.

 

[Natalie117]

Found this language here:

http://www.HUD.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502appdHSGH.pdf

page 5 (my bold)

Check mechanical, plumbing and electrical systems in the subject property to ensure that they are in proper working order. This examination entails turning on the applicable systems and observing their performance. If any conditions exist that would affect the health or safety of the occupants, condition the appraisal on the repair or alteration of the condition” and/or a “required inspection.” The following is not an all-inclusive list, but a listing of the more common readily observable property deficiencies.

 

[Natalie117]

The utilities must be on in order to do a complete inspection of the property.

The appraiser doesn't have to state that the utilities were on.

It would seem that if you are required to comment whether the said systems were tested, and in order for them to Be tested they had to be on, then you are saying that the utilities were on, in other words of course.

 

[realbiz]

VA does not require utilities to be turned on, however there are a few lenders that have this requirement. This has been addressed in annual meetings. I personally inspect utilities at the time of inspection, and have the information in my workfile.

 

[Lee Lansford]

I recently completed a VA appraisal where the subject's plumbing system was winterized and I obviously could not determine whether the plumbing system was functional. I was told by the VA (St. Paul) not to make the appraisal "subject to" for this property condition.

 

[Mike Garrett RAA]

Same here. Not a VA requirement that the utilities be on. In fact, I have appraised VA owned properties where the VA refused to turn on the utilities.

I also have heartburn with the term "tested". I am not a home inspector. I call tell if I think the systems are working but I don't "test" them.

 

[Mike Garrett RAA]

Since my last post...I looked at a house yesterday afternoon. HUD home...utilities off. Guess who will probably get a $100 re-inspection fee?

 

[staceyuw]

Update

thanks for all your answers. I e-mailed the underwriter what the VA appraiser said and she waived the condition. Amazing, right? That doesn't happen too often anymore.

 

[hastalavista]

thanks for all your answers. I e-mailed the underwriter what the VA appraiser said and she waived the condition. Amazing, right? That doesn't happen too often anymore.

(my bold)

I actually think it will start happening more and more.
Let's face it (and this is not a knock against underwriters), after 2007, the entire underwriting process had changed. I went to conferences where lenders (large banks) readily admitted that many of their underwriting staff had never manually underwritten a full loan package. They were used to automated underwriting. That has changed.
Couple the lack of non-automated underwriting experience with a tightening (draconian, in many cases) of lender underwriting requirements, and it is no surprise that the pendulum swung to the "no exceptions" extreme. Now, the pendulum is starting to swing back to the middle where underwriters have more experience and lenders are not as draconian. So, I expect (and have started to see) more exceptions to so-called lending requirements made by underwriters as we go forward.

Unfortunately, at some point, my prediction is the pendulum will swing too far and we'll be back to loose underwriting standards. Probably by 2020 (remember this prediction! :laugh.