I hope everyone is enjoying their summer, so far. I haven’t posted recently but ran into a situation that all agents should be aware of, especially those who work with FHA & VA Buyers.
Now most FHA and VA purchase appraisals will result in a list of mandatory repairs that must be completed and signed-off on prior to the Buyer receiving FHA or VA financing. The repairs are typically the responsibility of the Seller to complete. The only problem, in my experience, is that the Sellers often don’t want to incur the expense of those repairs and will often cut corners in doing so.
There was a situation like this last week where our office completed an FHA appraisal for a Buyer in Mount Airy. The appraisal was delivered to the lender along with a list of required repairs and pictures of those repair items. The lender sent the list of repairs to the Seller’s agent. However, the photos were not sent. What resulted was a lot of confusion and a postponement of settlement.
In this case, the Seller did not fully understand what was being requested in the list of repairs. The Seller’s agent was not aware that the Seller was confused and was interpreting the list of repairs incorrectly. So, when the Seller read “Stain/Paint the exposed wood on the exterior of the rear deck” they just assumed that the repair meant the deck flooring. Had they seen the pictures in the report, they would have understood that the appraiser was calling the exposed wood in the entire deck to be stained/painted. This included the floor decking, the railings, the handrails and posts. Check out the photos below to see what was missed.
When the appraiser went out to do the final inspection, he had to inform the lender that the repairs were not competed. The lender informed the Seller’s agent and the Seller who thought the repairs were done and that they were settling the next day. In fact, they now had to complete the additional repairs which delayed settlement for several days.
The moral of the story is, as a Seller involved with FHA/VA Buyers, it is imperative that you have a full understanding of the repairs required by the appraiser. Be sure that you request any pictures of damage or repairs that the Seller might be responsible for completing. Lastly, if you have any questions or are unsure about what is being asked of you and your Seller, reach out to the Buyer’s lender and ask them to obtain clarification from the appraiser. Most appraisers are more than happy to help out.
The Coyle Group’s team of Philadelphia Real Estate Appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com
Great point. I think appraisers need to be very specific in the appraisal report and spell out exactly what needs to be repaired and if it is not clear, the client needs to contact the appraiser before attempting to make the report. That is such a headache for all parties involved when the repair is not done correctly.
Unfortunately, it happens all too often. Agents…when ever you have a question about a required repair, reach out to the appraiser for clarification.