On several recent transactions appraisers have taken an uncharacteristically aggressive approach to safety and code violations. I'm not talking big issues here, but things like a hole in the ground that needed five minutes to shovel dirt back in or a wall heater that may have been installed without a permit. These are both examples of actual items called out on the appraisal. In both cases, the appraiser would only defend the value of his work if the conditions were remedied and another inspection was arranged to verify completion.
I honor the difficult work appraisers do, so this isn't an attack on their professionalism. It's a question if they are moving into the realm previously occupied by home inspectors and government building officials. In this case, the home inspector had already done his work at the time of appraisal and we shared the inspection with the appraiser. He noted additional items from the subfloor area that he hadn't seen during his on-site appraisal and added them as conditions to fix before he's sign off on the final appraisal.
My buyers were already aware of all the issues the inspector had raised and accepted the house in as-is condition. The only functional effect of the appraiser was to open a can of worms that involved asset managers signing off on repair work the buyers hadn't requested, the lender refusing to fund until the asset manager satisfied the appraiser, and the listing agent pulling out her hair. It wasn't a pretty sight, and killed the deal with that lender. Many unhappy people walked away from that mess.
My overall question is when did we strip the buyers of their ability to accept the condition of the property? None of these issues, particularly filling in the small hole, were going to cost a lot of money. More time was probably going to be spent on getting estimates than actually doing the work. The buyers were putting 20% down on the property and the total repairs were probably worth 1% of their down payment. If delayed, none of the repairs would lead to the deterioration or downgrading of the property.
I don't mind answering to building officials in their formal capacity to request improvements. I am going to object to answering to appraisers who are usurping the building official's roles without the background, license, or knowledge to do so.
Anybody else want to chime in? Especially appraisers.
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