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FHA Appraisal Pitfall Checklist: A helpful Tool!!

By
Real Estate Agent with Keller Williams Premier

Here is a great list that can help with evaluating homes for FHA financing buyers:

FHA Appraiser Checklist

When viewing a property, an appraiser is required to note those repairs necessary to make the property compliant with FHA's minimum property requirements. The appraiser determines whether repairs, alterations or inspections are necessary. Some conditions automatically require repair. Above everything else, make sure the water and the electricity are turned on!

Some require further inspection by an expert, and some conditions are considered only to be cosmetic. Repairs that are automatically required involve the protection of the HEALTH and SAFETY of the occupants and the SECURITY and SOUNDNESS of the property.

Conditions where repairs are automatically required:
a) Inadequate access /egress from bedrooms to exterior of home. Example: burglar bars that can't be opened from the inside
b) Leaking or worn out roofs
c) Structural problems such as foundation damage caused by excessive settlement
d) Defective paint interior and exterior surfaces in home constructed pre-1978, such as lead based paint chips
e) Defective exterior paint surfaces in post 1978 construction such as bare wood
f) Windows that won't stay open or are missing cranks

Examples of minor property conditions that no longer require automatic repair for existing properties include, but are not limited to:
a) Missing handrails
b) Cracked or damaged exit doors that are otherwise operable
c) Cracked window glass
d) Defective paint surfaces in homes constructed post 1978
e) Minor plumbing leaks (such as leaky faucets)
f) Defective floor finish or covering (worn through the finish, badly soiled carpeting)
g) Evidence of previous (non-active) Wood Destroying Insect/Organism damage where there is no evidence of unrepaired structural damage
h) Rotten or worn out counter tops
i) Damaged plaster, sheetrock or other wall and ceiling materials in homes constructed post-1978
j) Poor workmanship
k) Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting)
l) Crawl space with debris and trash
m) Lack of an all weather driveway surface

Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Nice summary.  Do you know how this compares to a VA appraisal?

Jun 30, 2009 03:01 AM
Anonymous
Ryan Bretzel

Mike,

I dont know the specifics of differences between the VA and FHA appraisal but I do know that VA's criteria is Safe, Sound, and Sanitary

Jul 07, 2009 07:42 AM
#2
Anonymous
mandi

My clients won a HUD bid on a beautiful home that is only a couple years old.

It is missing 2 interior doors (one in the guest downstairs bathroom and one in an upstairs bedroom) and the oven.  Do you know if this will be an issue for the VA appraisal?

Also, who is responsible for turning on the utilities?  I am guessing we (the buyers) are because HUD does not.  Will the VA turn them on?

Jul 16, 2009 01:51 AM
#3
Anonymous
mandi

After re-reading your blog, i see it's for FHA appraisals....it came up on my VA search :)

Are you familiar with VA appraisals?

 

Jul 16, 2009 01:54 AM
#4
Ryan Bretzel
Keller Williams Premier - Stillwater, MN

Mandi,

VA appraisals are going to be similar, but if anything they might be a little more strict.  Their biggest concerns are Safety, Sanitary, and Sound.  If the house fails in these areas you may have a work order. 

As for the interior doors, I wouldn't be too concerned.  They may care about the oven door though.  There has to be a way for a home owner to cook food.

HUD should turn on utilities because VA will need them on when they do the appraisal.  The home has to have running water and heat.  Good luck!

Jul 17, 2009 07:38 AM
Anonymous
Anonymous

we are getting a home in the city of pomona,ca but beforehand they want us to pay for the termite fees and repairs, everything else on the homes seems to be va approved, also they have an unpermitted room. after the termite issue is fixed will the va appraiser let us go on with our va loan. We want to make sure it will pass before we say yes to the offer. thank you

May 26, 2010 08:34 AM
#6
Ryan Bretzel
Keller Williams Premier - Stillwater, MN

Thanks for the response.  I'm a little confused by your question, and this might be because I am not familiar with CA real estate terms (what is an unpermitted room?) .  Also we don't have termites in MN so that is not an issue. 

Basically though when an appraiser does the appraisal they will list any items that need to be fixed before the loan can close (or escrow in your terms).  If there were any issues they should have been listed and once these items are fixed the VA appraiser will come out to re-inspect and verify they were fixed and give the green light.

Hope that helps.

May 26, 2010 05:53 PM
Anonymous
Rita Pummill

I would love to send you a copy of my resent copy of my fha appriasal she nitt picked all the things you list as no longer needed to repair. got two real crap for mortgage companies would'nt even show the proftional curtisey to call and tell us the could;nt give us the loan. one woul;nt even call our realter back, had to find out through anthor agent in the same office. the first bank was Fist national of omaha, op office, 2nd one was ron at leader one, river side office.

Mar 09, 2011 09:27 AM
#8
Anonymous
Jennifer

What does it mean when the appraisal comes back way below the asking price and all the comparables are much higher than asking price for the same area and neighborhood?  Should a split level  home be compared to a ranch style home in assesing its value? Why would only a small portion of the homes finished square footage been considered in the appraisal for a split level home if all rooms have windows and are compleatly finished?

May 18, 2011 04:30 AM
#9
Anonymous
Ben

I know this is an old post, so I apologize for attempting to revive it. This post is in regards to MN, which is where I'm intending on purchasing my home.  My question is in regards to FHA appraisal requirements.

I'm looking into purchasing a short sale. The house is in prestine condition except one of the two bathrooms. The seller purchased the home and was in process of flipping the house. The bathroom was redone to an extent. This bathroom has an exposed solid concrete floor. The old drywall was ripped down and replaced with new drywall, but was left unpainted. There are also spots in the ceiling where some of the previous light fixtures where removed. The spots have the exposed wires for rewiring a new fixture, but the ends are twisted with a wire nut, so they themselves are not exposed.

Would the condition of this bathroom make the fha appraisal fall flat and prevents us from recieving the loan for this house?

Thank you for your time

Jan 19, 2012 02:23 PM
#10
Ryan Bretzel
Keller Williams Premier - Stillwater, MN

Ben,

Sorry for the delay in response but I didn't get a notification of your comment and just saw this.  Unfortunately appraisers are subjective and all will comment differently.  The good thing though is since you are working with a real seller it should be an easy fix.  The only issue I see is them possibly calling the wiring.  They may say there needs to be a junction box installed.  Hope that helps!  Let me know if you need anything else.

Feb 02, 2012 04:38 PM