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Take a Pic and Ask a Question!

February 21, 2018 by Leave a Comment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If you ever see something at a property and find that you have questions, just take a picture or shoot a video and text your question to me!  Questions like…Is this an FHA or VA repair issue? Is this functional obsolescence? Is this likely to have an effect on the value?  Should my Seller have this repaired prior to putting the house on the market?   I’ll give you my professional opinion.  Please feel free to share this with your Philly Agent/Broker colleagues!

 

Michael Coyle  text  610-316-8007

 

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. We also provide “footprint” sketches for determining a more accurate square footage of a property.  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

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FHA & VA Repairs?…be sure to Ask Questions!

July 6, 2017 by 2 Comments

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

 

 

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Five Fast FHA Fixes!

August 3, 2016 by 12 Comments

The Coyle Group - HUD LogoFor those Agents who deal with FHA and VA financing, you understand how the required repairs can be frustrating, costly and time consuming.  Sometimes the repairs may even kill your deal.  As Philadelphia Appraisers we certainly understand your situation. That being said, let’s keep in mine that the repair requirements are intended to protect the borrower/veteran.

There are; however, a number of fixes that can be done proactively to reduce or eliminate FHA required repairs.  Here is a list of five easy FHA repairs that can be done ahead of time that will save you and your seller time, money, hassle and in the end help the home get sold.

 

The Coyle Group - Defective Paint - Philadelphia AppraiserDefective Paint.  This is one of the biggest FHA issues out there and one of the easiest to recognize and repair prior to listing.  If a home was built prior to 1978, there is the potential for the presence of lead based paint.  This applies to the dwelling and/or all related improvements (garages, sheds, barns, fences, outbuildings and appurtenant structures).  The appraiser is to observe all interior and exterior surfaces including common areas, stairs, decks, porch, railings, windows and doors for defective paint (cracking, scaling, chipping, peeling or loose) and call for repair.

If these areas of distressed paint can be identified and taken care of ahead of time, your seller and you are ahead of the game which will result in saved time, money and hassle.

Please note that all repairs should be in compliance with HUD and EPA guidelines.

 

Missing Hot Water Heater Valve Extension.   The FHA requires that all hot water heaters be equipped with an extension to the pressure relief value that extends to within six-inches of the floor.  This is to prevent scalding should the valve release.  As appraisers in Philadelphia, we run into this one all the time.  The fortunate thing is that this is literally a $5.00 – $10.00 fix and can be done by almost anyone.  This fix can easily save hundreds in appraiser re-inspection fees, hassle and lost time that could jeopardize the deal.  Simply, go to the Plumbing Supply department of Lowe’s or Home Depot and explain your problem to an associate.  If they can’t point you a pre-made extension, they will easily be able to show you to the components to make one for yourself.

(HINT:  If you’re an agent that does a good deal of FHA/VA business in Philadelphia or the surrounding counties, you may want keep one or two of these in your car, just in case.  Also, some extensions will require an elbow joint as well.)

The Coyle Group - Hot Water Heater - Philadelphia Real Estate Appraiser

Heater without Extension

The Coyle Group - Pressure Relief Valve - Philadelphia Appraisal

Heater with Extension

 

 

 

 

 

 

 

 

The Coyle Group - GFCI Outlet - Philadelphia Appraiser

GFCI Outlets.  This is another one that we see all the time.  Look at it this way, if your seller has an electrical outlet within six-feet of a water source (a sink, washer, toilet, shower/tub, etc) they should replace it with a GFCI outlet.  If the outlet is already part of a GFCI breaker but doesn’t have the easy-to-see reset buttons, you may want to have a qualified electrical contractor write-up a certification to that effect prior to listing.  Show the cert to the appraiser and buyers.  It should take that FHA repair off the table.

 

The Coyle Group - Frayed ESW 2 - Philadelphia AppraiserFrayed Electrical Service Wires (ESW).  As a Philadelphia Appraisal firm, we appraise a lot of older homes.  Even if an older home has been updated, sometimes the exterior electrical elements can got forgotten.  After years of exposure to the elements, the exterior (and some times interior)  ESW can become cracked and frayed.  This poses an obvious hazard.  If your seller has this problem, recommend that the replace the exposed lengths of ESW.  Again, it’s an easy fix that will save money, time and hassle in the end. It will also show the buyer that the seller has been maintaining the electrical service.

 

DSC06497

Non-Functional Appliances.  With the new FHA Guidelines for appraisers, one of the new requirements is that the appraiser must test that all appliances are operational.  While many appraisers feel that this is more a job for a Home Inspector, it is the way things are for now.  So, if your client has an y appliances that are non-functional, it is recommended that they repair or replace them prior to listing.  If the appraiser finds that they are not operational, the seller will have to repair/replace them anyway.  So why not proactively take the problem out of the equation?  The house will show better and there will be less wasted time, money and hassle.

By now, I’m sure you’ve caught on that these Five Fast FHA Fixes will all save your client and you a great deal of time, money and hassle.  I hope you found this informative.  If you have any questions about FHA repairs or any appraisal related matter reach out to us by email, phone or FaceBook.  Also, feel free to ask about our FHA Pre-Listing inspections where one of our appraisers will visit a property and inspect it for any potential FHA repair issues, prior to listing.

The Coyle Group’s team of Philadelphia 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

 

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FHA Repair Do’s & Don’ts

July 31, 2014 by 6 Comments

If you have Sellers who are willing to accept FHA financing from Buyers, make sure you/they understand these two words…professional and workmanlike. The reason being, HUD requires that all repairs for FHA insured loans be completed in a professional and workmanlike manner. If they are not, the financing may be denied.

Now, I understand that most Sellers aren’t thrilled about making repairs to a house they plan on selling.  Some Sellers figure if they do the bare minimum repairs everything will be fine.  However, if the repairs are not completed in a professional and workmanlike manner the deal could fall through. Here’s a real life example of how not to complete required FHA repairs. In this case, the FHA guidelines required that the exterior of all of the windows be scraped, prepped and painted.  The Seller (who balked at the idea) came up with his own solution.  

The Coyle Group - Bad Paint Job 6 - Philadephia Appraiser    The Coyle Group - Bad Paint Job 5 - Philadephia Appraiser     The Coyle Group - Bad Paint Job 4 - Philadephia Appraiser   The Coyle Group - Bad Paint Job 3 - Philadephia Appraiser    The Coyle Group - Bad Paint Job 2 - Philadephia Appraiser    The Coyle Group - Bad Paint Job 1 - Philadelphia Appraiser

Well, needless to say this didn’t pass the professional and workmanlike standards of  HUD.  The appraiser deemed the repairs unsatisfactory.  As a result, the Seller had two options, make the repairs or lose the deal.  As you can imagine, his paint job didn’t exactly add value or make his house more attractive to a new Buyer.  Eventually, the Seller decided to make the proper repairs.  He hired a professional painter (at his own expense, over $4,000) to complete the job in a professional and workmanlike manner.  The repairs were then deemed satisfactory.

Bottom line, when it comes to FHA repairs it pays to do them correctly the first time.  If a repair requirement is unclear, reach out to the lender or appraiser for clarification.  Doing so can save time, money and the sale.

If you are working with a Seller and would like to address potential FHA repairs prior to listing, please contact our office.  We have a service available to homeowners and agents where one of our professional, certified and FHA Approved appraisers will visit your property and work with you to identify potential FHA issues.

 

The Coyle Group’s team of Philadelphia appraisers is a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing appraisals in the greater Philadelphia Metro Area.  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

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FHA Guidelines (a Cheat Sheet)

December 9, 2013 by Leave a Comment

The Coyle Group - HUD LogoThis is a special announcement to all of our real estate agent friends out there.  The Philadelphia Appraisers at the Coyle Group just published “The FHA Cheat Sheet”.  It was developed in response to agents, who for years, have asked us “is there a comprehensive list of FHA requirements?”  Well, it may not be comprehensive but, The Coyle Group has compiled a list of 40 of the most frequent FHA repair items and issues that face sellers, buyers and agents.  Gain some insight on how the FHA views defective paint or cracked pavement.  See what to do about broken window and graffitti…plus a whole lot more.  We’ve even include a BONUS Tip at the end!

If you are interested in receiving a PDF copy of the FHA Cheat Sheet, please send an email with your full name and email to appraisals@coyleappraisals.com be sure to put FHA in the subject line. 

For more information be sure to visit our website at www.thecoylegroupllc.com or contact us by phone at 215.836.5500

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Agent Alert!

March 29, 2012 by Leave a Comment

AGENTS!  Spring is here and these warmer temperatures will only help to heat up the Spring Selling Season.  If you haven’t done so already, now is the time to take a hard look at your older listings and think about how they will compete in the Spring market.  Perhaps, it’s time to do a little Spring cleaning and meet with your Buyers to decide whether they need to “reposition” (re-price) their listing. 

You can bet this new crop of inventory will be priced to sell.  If you want to contend with these new listings, you need to have a competitive price.  Proper pricing is the key!

One way to test the market is to have a Listing Appraisal completed.  Now, having an appraisal completed on a listing is not necessary for all situations.  However, if you have a unique property or a stubborn Seller, a Listing Appraisal may be the way to go.

The obvious benefit is that a Listing Appraisal will provide you and your client with an unbiased, professional opinion of the property’s current fair market value.  Aside from that important fact, there are other benefits to having an appraisal completed on your listing. 

As an agent, having a Listing Appraisal completed allows you to still “be the good guy” and maintain your client relationship while adjusting your Seller’s expectations.  Unfortunately, some Sellers refuse to believe that their home has been affected by recent real estate trends or, perhaps, they feel that shag carpeting and pickled-wood cabinets are making a come back with Buyers.  Having an impartial appraiser look at the property could provide you with the insight and feedback necessary to help your Seller “see the light.”

A Listing Appraisal also gives agents and Sellers an idea of how a potential Buyer’s appraiser may view the property when completing an appraisal for mortgage financing.  This way you limit the chance of being hit with any last-minute surprises or having to renegotiate your contract price because of a Buyer’s appraisal.

If your listing falls under the FHA program limit of $420,000 for Philly region, having a Listing Appraisal can provide added benefit.  Some appraisers will actually perform an FHA-style inspection when looking at your property and incorporate their findings in their appraisal report (our office does this as standard practice).  This will give you and your Seller a heads-up on any potential FHA issues that may affect your Listing.  That information can be used to correct the problem, possibly eliminating future headaches, negotiations and wasted time.

So, what’s the cost?  Well, typically a Listing Appraisal will be in the $300-$450 range (sometimes more if the property is unusually large or complex).  However, if you think about it, this is a relatively small investment if it can minimize your listing’s time on the market.  Or look at it another way…would you (or your Seller) be willing to pay $300 if you knew that your listing could sell faster and that you wouldn’t have to waste weeks dealing with hidden FHA issues, negotiations and stress? 

Think about it…and have a great Spring!

If you have any questions about Listing Appraisals or any other appraisal related question, please feel free to contact our office at appraisals@coyleappraisals.com or 215.836.5500.

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HUD REOs for only $100 Down!

October 31, 2011 by Leave a Comment

In a recent article on the DSnews.com website, Carrie Bay writes about a new HUD initiative aimed at reducing their REO inventory in several markets across the US. 

I can understand the desire to reduce the inventory and get these properties into the hands of qualified homeowners.  However, the idea of possibly putting distressed properties into the hands of individuals with very little “skin in the game” is concerning.  Sure the 203K program will be able to help the owners finance repairs but, it does nothing to prepare and assist these owners with the unforeseen complications of owning an REO property.  Oftentimes, these homes have unseen issues that the typical buyer is not aware of or cannot adequately prepare for. 

While I can see that the program has good intent, I am not sure if this is a great idea.  What do you think?   Below is the full article.

HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers.

In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.

The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.

The $100 down payment incentive program has been approved for two of HUD’s four national regions – the regions managed by theDenver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.

Denver Homeownership Center’s Jurisdiction:

  • Arkansas
  • Colorado
  • Iowa
  • Kansas
  • Louisiana
  • Missouri
  • Minnesota
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Oklahoma
  • South Dakota
  • Texas
  • Wisconsin
  • Wyoming
  • Utah

Atlanta Homeownership Center’s Jurisdiction:

  • Alabama
  • Florida
  • Georgia
  • Kentucky
  • Illinois
  • Indiana
  • Mississippi
  • North Carolina
  • South Carolina
  • Tennessee
  • Caribbean

HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.

Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering.

MMREM is under contract with HUD to assist with disposition sales of its repossessed homes. MMREM handles properties throughout 16 states, or about a third of HUD’s REO portfolio.

With an FHA 203k loan, “buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100,” Martin explained.

“MMREM is excited to work with this recent initiative, in a way that it supports putting HUD homes back into the hands of homeowners,” Martin said.

In addition to $100 down instead of FHA’s typical 3.5 percent down payment, HUD says it will also cover up to 3 percent of the closing costs in most cases.

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FHA: Hazards & Nuisances

March 29, 2011 by Leave a Comment

From time to time when inspecting properties in and around Philadelphia, we come across homes that have less than desirable locations due to external influences.  External influences are conditions locate on or beyond the premises of the subject property that may have an adverse (or positive) affect on the value or marketability of the home.  An example of a positive influence is a property located on a golf course or on the beach.  But the focus of this post will be negative external influences and hazards.

FHA realizes that these conditions exist.  When an FHA Appraiser notes a Hazard and/or Nuisance at a property, they must “indicate whether the dwelling or related property improvements is located within the easement serving a high-voltage transmission line, radio/TV transmission tower, cell phone tower, microwave relay dish or tower, or satellite dish (radio, TV, cable, etc)”

Other external influences that are considered to be Hazards & Nuisances by FHA are:

  • Airports
  • Railroad tracks and other high noise sources
  • Flood zones
  • Lead based paint
  • Radon
  • Overhead high voltage transmission towers and lines
  • Operating and abandoned oil and gas well, tanks and pressure lines
  • Water towers
  • Insulation materials
  • Lava zones
  • Avalanche hazards

Here are some pictures of Hazards & Nuisances that Coyle Group appraisers have taken over the years.  If you ever have any question as to whether or not your property affected by a negative external influence, please feel free to call our office. 

  

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“Anti-Flipping Waiver” Extended

February 1, 2011 by Leave a Comment

On January 28, 2011, HUD/FHA distributed a press release announcing extension of the temporary  “anti-flipping waiver”.  This regulation was waived last year through January 31, 2011.  Now FHA will permit the waiver through the end of 2011.  

The release states: “This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.”  Follow this link to read the entire press release.

This program is a good thing for Philadelphia and the region.  It will help properties to move by allowing investors and market forces to operate free of cumbersome restrictions.  Prior to the “anti-flipping waiver” FHA required 90 days between the initial acquisition and the date when the property could be place under contract, again.  FHA research found that in the current market, purchasing, renovating and reselling a property typically takes less than 90 days.  Click this link to read the Anti-Flipping Waiver.

If you have any HUD/FHA or appraisal related questions, please feel free to contact our office at 215.836.5500 or submit your question through our Ask PAB! page link.

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FHA Protocols

January 19, 2011 by Leave a Comment

The FHA has a number of appraisal inspection protocols which must be followed by FHA Appraisers.  Agents and Sellers should be aware of these inspection protocols as they may affect the appraisal and upset settlement timelines.  These protocols are intended to assure a level of due diligence that must be performed by the appraiser in order to property assess whether or not a property meets the Minimum Property Standards set forth by HUD/FHA.

The Head & Shoulders Test – this standard simply means that when inspecting attics, basements and crawl spaces an FHA appraiser must enter the space to “head and shoulders” level, at a minimum, to allow for a proper visual inspection. 

Mechanicals & Plumbing – all of the homes mechanical systems and plumbing must be turned on and available to be tested by the appraiser.  A representative sampling of switches, outlets and fixtures must be tested.  The heater must be operational.  If temperatures permit, cooling systems must be tested.  Water pressure and temperature should also be tested.

If for some reason, the appraiser cannot access any of these spaces or complete any of the necessary system tests, the appraiser must contact the lender and reschedule another inspection of the property at such a time that property access can be made.

This is where Agents and Sellers have to be proactive.  Make sure that these areas are readily and safely accessible to the appraiser.  Have a ladder ready for the attic inspection if there are no drop stairs.  Clear the access to the crawl space and have a light available to light up those dark corners.  Remove any personal property that could block these areas from access and view.  Make sure that all of the utilities are turned on and are ready to be tested.

These simple steps will save time and money.  The FHA appraisal process will move more quickly without having to schedule unnecessary reinspection appointments; and the appraiser won’t have to charge a re-inspection fee.

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