The Appraiser Said I have to repair What???

 

The appraiser said I have to fix what??

I am going to attempt to give you a little insight into when and why repairs may be required.

The reason I say attempt is because there are a ton of different scenarios that we encounter.

Hopefully, I can help you… and not confuse you even more!

It begins here:

When we visit your property we are looking at all of the readily observable areas of your property.

So during our appraisal appointment you'll notice us opening up all of the doors, walking into every room and walking around the outside of the property.

We take lots of photos - I personally take photos of every single room, all outbuildings, all deferred maintenance, higher quality improvements and all recent updates.

We are not home inspectors or code enforcement officers… so we do not climb on roofs or determine if everything is up to local building codes.

Here are a few general things to notice as you look around your home….

1- Are there any items of deferred maintenance that might be

considered a health or safety issue? Examples include:

• Peeling or flaking paint on a home that was built prior to 1978. (It

may possibly contain lead based paint)

• Missing hand railings at your stairs.

• Exposed electric wires

2- Items of deferred maintenance that do not appear to be

health/safety issues ….here are a few examples:

· Worn carpet

· Peeling paint on a house built after 1978

· Broken or missing cabinet doors

3- Items that will cause a me to ask hmmmmm:

What's this?

What caused it?

Has the issue that caused it been repaired?

(Example: a stain on the ceiling caused by a leak)

The reason that I ask these questions is so that I am able to provide my Client the most clear and accurate report of what is going on with the property.

So, how to we determine the items that are recommended or required for repair?

Ultimately, it all depends on the type of assignment, the Client's requirements, and the intended users of the report.

There are so many different scenarios… here are just a few of the most common situations that our office routinely encounters:

**** Typically, the Lender Clients will only require the health/safety issues to be corrected.

Again, it all depends on the type of mortgage loan and the Lender's specific requirements.

(I am not going down the FHA, USDA, VA or new construction rabbit hole here….we will save that for another day)

But in any case, it is ultimately the Lender's decision to determine what to do about the deferred maintenance and decide which repairs are required.

Once the repairs are complete the Lender will normally ask the appraiser to go back out to the property to take photos of the completed repairs.

If all of the repairs have not been completed the Lender will usually keep sending us back to the property until all of the repairs are 100% complete…. I have never experienced a Lender being ok with 99% complete.

So, in order to make this process as simple as possible….please be sure that your repairs are 100% complete before bringing the appraiser back over to your house.

Personally, I always go over the list of repair items with the homeowner or realtor before I travel back to the house. It makes the process much smoother for the everyone.

**** If the appraisal is being used for settling an estate or divorce, then the deferred maintenance items are usually mentioned for descriptive purposes only and the Client will rely on that information as an understanding of the overall condition of the home.

**** If the appraisal is being used to determine a sale price via a cash transaction, then the deferred maintenance items mentioned may be used by the Client as a means of negotiating the terms of the sale.

Important:

As appraisers, we are not experts in the field of home inspection so please keep in mind that in certain situations it's our responsibility to recommend an expert in a particular field to take closer look. In my experience, I have recommended repairs and certifications from experts in the fields of roofing, heating, plumbing, mold, structural engineering, electric, asbestos and a several more. Please, please, please do not rely on an appraisal report as a replacement for a home inspection.

I hope this has helped to shed a little light about repairs!

As always - I am happy to have a more detailed conversation with you anytime.

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