Re-inspections and How to Avoid Them
As an appraisal management company we get asked quite frequently by many Real Estate professionals “How do I prepare my clients for the appraisal inspection?”. We love hearing this question because its a true demonstration that that the agent or MLO really cares about the client and wants to be pro-active rather than re-active. In the long run it makes all parties look good! I have posted what I believe are the top 5 items that call for the appraiser to Re-Inspect when it can be avoided. Enjoy and good luck!
5.) Well & Septic Locations – If your borrower is qualified for FHA or USDA financing and the subject property has a Well & Septic system the appraiser will need to know the locations of both. HUD has minimum distance requirements and the appraiser has responsibilities to verify the locations and acknowledge if they meed HUD minimum distance requirements. Many times the agent showing the property is not aware if the subject is on a well or septic system. If they are not easily accessible or at a minimum easily viewable it will not be likely that the appraiser can confirm the distances. We suggest the point of contact that is showing the property be knowledgable of the locations to avoid the cost and delay of a re-inspection.
4.) Non-Accessible Areas – When showing the property to the appraiser make sure that all rooms, closets, garages, basements, and outer-buildings are unlocked and accessible This includes access to the Hot Water Heater. Depending on the financing execution of the loan and any lender/investor overlays to appraisal requirements appraiser today are most likely required to take photos of all interior rooms and features that contribute to the value. If an office door or garage is locked the appraiser will need to re-inspect to get the photos. It is important to note that an appraiser can NOT move items, unlock doors, pry open areas ect. They can only report what is readily accessible and viewable. For example if you have the Hot Water Heater closet screwed shut the appraiser is prohibited from opening it.
3.) Non-Cosmetic Repairs – Make sure you know the current condition of the property. Ask the seller or home owner if the home has any deferred maintenance or items that need attention. As of January 1st 2006 FHA appraisals require repairs for conditions that rise above cosmetic defects, minor defects, or normal wear and tear. Appraiser must report ALL deficiencies but lenders can use professional judgement and prudent underwriting practices to determine when a property’s condition is a threat to safety or jeopardizes structural integrity.
This is a list of examples that NO longer required automatic repair to existing properties but are not limited to:
- Missing handrails
- Cracked or damaged exit doors that are otherwise operable
- Cracked window glass
- Defective paint surfaces in homes built after 1978
- Minor plumbing leaks such as faucets
- Worn or soiled floor coverings or finish
- Rotten or worn out counter tops
- Damaged plaster or sheet rock or other wall and ceiling material on homes constructed after 1978
- Poor workmanship
- Trip hazards such as sidewalks or badly installed carpet
- Lack of all weather driveway surface
Examples of conditions that may be of risk to health and safety of occupants or soundness of property that continue to require automatic repair, but are not limited to:
- Inadequate access/egress from bedrooms to exterior of home
- Leaking or worn out roofs
- Structural problems such as foundation damage caused by settlement
- Defective paint surfaces in homes built before 1978
- Defective exterior paint on homes built after 1978 where finish is unprotected
2.) Carbon Monoxide Detector & Hot Water Heater Double Strapping – Depending on your state you will want to make sure that the hot water heater is double strapped and the home as the required amount of CO detectors. In California this is the #1 item that gets overlooked and is the easiest to prevent. It should be part of every good agents routine to make sure the home has these items ready to go!
1.) Attic & Crawl Space Areas – The number one most common cause for re-inspection is adequate access to the attic and crawl space. Many home owners have screwed them shut or blocked access. Remember the appraiser may be required to complete a “head and shoulders inspection” of these areas and if the access is not available the report will be condition “subject to inspection”. Make sure you know ahead of time that access is available and the appraiser will be able to inspect.
Please use this as a guide and if you have any questions please dont hesitate to ask!