A reader asks, "We closed on house on 3/31. Had inspection. Stated was sewer, prev owner said was sewer, realtor said was sewer. On 5/8 found waste backed up in toilet in basement, called plumber, found out we have a septic system, currently waiting on them to come out inspect and pump."
"We have a FHA loan. How was this missed? we have no problem paying to have it pumped, but who is responsible if it more then pumping out issue? The company we called (only one in area) stated he had just pumped it 2 years ago. So prev owners knew it was on septic."
There is one important question which must be answered--did the reader assume the FHA appraisal could substitute for a home inspection, or did the reader pay for the optional home inspection in addition to the FHA appraisal?
FHA appraisals are NOT considered inspections--not by the FHA nor the lender. The FHA and HUD strongly urge borrowers to pay for a home inspection above and beyond an FHA appraisal, going so far as to publish a document titled, "For Your Protection, Get A Home Inspection".
FHA appraisers are not experts in every mechanical aspect of a home. The job of an FHA appraiser is to insure the home lives up to minimum FHA standards and establish the fair market value of the property. The borrower's responsibility includes making sure the home is fit to his or her own standards and hiring the services of a home inspector is a major part of determining how suitable the home really is.
The FHA does not offer a guarantee that a property is free from defects, and the fact that a home passes the FHA appraisal process is not a promise that no issues are present.
That said, if the reader DID pay for a home inspection as recommended above and the septic issue was not discovered, the reader may do well to seek legal recourse since the home inspector may or may not have done the job properly. It's not our place to say, but if the reader was given a "clean bill of health" for the property by a home inspector, a lawyer would be able to advise the reader whether legal recourse is an option.
Do you have questions about FHA home loans? Ask us in the comments section.
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