Appraisals | Avoiding Complications
Today I’d like to offer some clarity on appraisers’ duties, and how to reduce the complications that an appraisal can introduce into your purchase, sale or refinance.
It is important to understand that appraisers are required to document any potential health, safety or structural issues that they can readily observe while at the property. Once an issue has been documented in the appraisal report, that loan cannot close until it has been resolved. Several very common examples of readily observable issues are:
- Broken or missing railings on stairs and decks
- Foundation cracks, crumbling concrete stairs and/or other evidence of sinking
- Visible roof, soffit, eve or siding damage
- Evidence of water intrusion into the building
- The visible presence of black mold on drywall, studs or joists
- Signs of wood destroying insect infestation
- Exposed electrical wires or broken light switches and outlets.
For FHA financing please keep in mind that in addition to the above, deteriorating paint/wood around exterior window/door frames and cracked/broken glass will almost always need to be repaired prior to closing.
The most common mistake that leads to complications and closing delays is when everyone assumes that the buyer’s home inspector is going to make note of whatever known defects the home has, and the seller will simply give them a closing cost credit. However, that credit does not circumvent the need for the property to meet minimum condition standards for financing prior to closing.
By keeping a sharp eye out for the items listed above, your purchase, sale or refinance will go much more smoothly.