FHA Appraisal on a bank owned prop?

Question

We are in the process of buying our first home. It's a bank owned and we have an FHA loan.

We had the inspector out who alerted us to the copper piping beneath the bathroom having been stolen (crazy!), and that the smoke detectors didn't work. (great)

The appraiser then went out and has asked that we do the following: clean carpets, fix a window, put up screens, and paint the whole interior.

Does this sound absurd to anoyone else??? I need clean carpets but don't need pipes?? I need fresh paint but don't need smoke alarms?? Is this a normal response from an appraisal? Do they only care about cosmetics?

That being said, the seller (aka, bank) has agreed to pay up to $2K in repairs. Are FHA repairs usually in addition to any repairs we request? Or will my $2K most likely be eaten up with cosmetic c**p I'll redo once I move in anyways.

Just wondering what's "normal"

Answer 1

I'm a FHA Certified appraiser and FHA is about safety, security and soundness. FHA could care less about the carpet other than the deferred maintenance part of the appraisal. FHA states All plumbing must be in working order. No broken windows. No one cares if you have screens, not FHA or the appraiser. The only paint issue FHA cares about is if the home was built before 1978 then there can be no pealing paint anywhere on the site to include out buildings, fences and the home interior and  exterior, due to lead based paint. Smoke alarms are a safety issue and are needed. A apprasier must note all deferred maintenance and deduct for it under condition. This may be an issue if the interior is in poor condition. Remember the appraiser will be comparing other homes that just sold in average marketing condition to come up with a value for your loan. If your home is in fair-poor condition then you will not get the loan. The appraiser must state if the home is in poor, fair, average or good condition in the report. Also remember the appraiser will be setting an effictive age on your home and the lower the effictive age the better. If the home does not meet FHA standards then the appraiser MUST make the appraisal subject to repairs and the loan can not proceed until the repairs are complete and the appraiser come back to inspect the repairs to see if they are complete before he will sign off the 442 form. Sorry but that just the way it is. The appraiser could loose his license if he does not. Everyone says they will fix it later. I went to appraise a home last week and on the phone the homeowner stated he had new kitchen cabinets.

I went to the home and asked him where are the new cabinets and he said in the garage still in the boxes and his wife said and thats where they have been for the last 3 years. I told him they dont count until they are installed. Also you can not order another appraisal, there is a FHA case number assigned to the lender and the first lender would have to release it. And all FHA appraisers must follow the same rules. Also expert realtor does not know what she is talking about. FHA appraisers are required to look under the house to check for standing water and look in the attic, also required to check the plumbing to make sure it works correctly and same with light switches. A FHA appraisal is part home inspection and part appraisal.

Answer 2

You have to understand what the requirements of an FHA loan is.

1.  FHA loans DO NOT require a home inspection.  They never have.  So it's good that you got your own to go out there and discovered the missing copper piping...but don't you dare buy until you get an estimate from a plumber on what that will cost to fix, it will blow your mind how high plumbing repairs can be.

2.  Appraisers ARE NOT home inspectors.  He didn't go under the house...he isn't required to.  That's not his job and he is not required to look at the inspection either b/c FHA doesn't require one.

That $2,000 can be eaten up in the PLUMBING alone...that is why I'm telling you to get an estimate.

PS:  Call your bank and see if it's necessary that painting and carpet cleaning need to be done...it's their call, not the appraisers.

I used to be an FHA underwriter, and those are both considered cosmetic.  Things like paint, we weren't concerned about nor carpet as long as it was in one piece.

PSS:  JAN IS WRONG...YOU cannot order another appraisal for an FHA loan.  That is a waste of money and a bank won't accept it.  The bank orders the appraisal...it's for them...NOT you.

Answer 3

Get another appraisal by another source other than one's recommended by your mortgage company. Yes it may cost, but many mortgage companies use the same appraiser alot and tend not to be as subjective with their final appraisals.  Also, anything that has to be done to bring the house up to code (such as piping and smoke detectors) has to be paid by the seller which is the bank in this instance unless you are buying as is.