Realtors Don't Let a Little Crack Delay Your Closing!
Michael S. Bolton in an appraiser in Zimmerman, MN. I will admit that the first thought that came to mind is Michaels name sake and singer Michael Bolton, THAT actually got me to click on his blog.(good for you ;-)
Appraisers, do not have an easy job...at least not here in Colorado. Recently, Marcia Waters, director of the Colorado Dept. of Regulatory Agencies, DORA, explained to a room of realtors, just how many appraisers the state of Colorado has lost in the past few years and that the licensing requirments are superstrict and VERY expensive.
When I met up with 'my' appraiser, meaning the one that was assigned to one of my properties, I had to remind myself that he might be having just a bad day when he snarled at me.
I am sure Michael is ALWAYS in a good mood ;). Love his post about cracked windows and how he handles it.
One of the major challenges Realtors face when having one of their sales go FHA financing, is what work orders is the appraiser going to call for. With Fannie Mae and Freddie Mac in everyone's crosshairs, FHA financing is only going to become more prevalent within the housing market. I would highly recommend that Realtors become familar with HUD's Mortgagee Letter 2005-48, and FHA's three S's.
Small Window Cracks Don’t Need Repair
FHA no longer requires that all cracked or broken windows be an automatic repair. Requiring a window to be repaired can be challenging for an appraiser, because what is considered safe and just a maintenance item for one appraiser, may be considered a danger to another. FHA requires that all deferred maintenance be noted within the appraisal report, along with a photo, so the underwriter can make the final decision if it’s in doubt. This window has such a small crack that it wasn't probably worth mentioning, but I did anyways just to CYA. The underwriter agreed, and no repair was necessary.
Some Window Cracks That May Need Repair
It's tough to see, but this crack is much larger, however, it was dual pane glass and the owner could operate the window without getting hurt. That doesn't mean that someone on the outside touching or moving the window wouldn't get injured. On this appraisal I just reported it to the underwriter; "That this window has the potential for injury," and let them make the call. The underwriter ended up requiring the window to be repaired.
The Obvious Window Cracks That Should Be Repaired
This window is pretty much a no-brainer, and would be required to be repaired. It doesn't meet FHA's MPR (minimum property requirements) guidelines, which is to protect the improvement (house) from the outside elements, and the safety of the homeowner. However, the underwriter does have the final say, but most likely will require that it be repaired.
The bottom line is that if you have any window that is cracked or broken, and has the appearance of being a safety hazard, have it repaired before listing the property for sale. This will keep your sale from being delayed at the last minute by an FHA work order.
If you have any questions, or Minnesota real estate appraisal needs (divorce, bankruptcy, tax appeal, or estate planning) please contact Michael at 612.599-2581, or use the form on the contact page.
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