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Frequent FHA Appraisal Repair Items

Many different issues can come up during an FHA appraisal inspection. From years of experience, we notice some that appear more frequently than others. These are issues Salt Lake homeowners should be aware of when taking part in an FHA refinance or when selling their home to an FHA buyer, as any of these items could delay the closing of your transaction. For this reason, it’s a good idea to prepare in advance by correcting any of these items prior to the appraiser performing an FHA inspection of the property.
Safety, Soundness, and Security (the three S’s) are the main goals that an FHA appraiser looks for when inspecting a home. Everything on the appraiser’s checklist is meant to ensure the property is safe and habitable so that the home will serve as proper security or collateral for an FHA loan. 1. Utilities Must Be Turned On – All too often and especially with vacant properties, one or more of the utilities may be turned off. This prevents an appraiser from completing a full inspection of the property. When this happens, the appraiser conditions the appraisal for the utilities to be turned- which on delays the loan process, and often costs more money in appraisal fees. The appraiser will have to return at an additional charge to complete a full inspection once the utilities have all been turned on. The utilities must be turned on in order for the appraiser to check that all related mechanical items are functioning properly including the plumbing, running hot water, heating units, central air, gas stove burners, lighting, outlets, and more. 2. Missing Carbon Monoxide Detectors — As per Utah Administrative Code, detectors are required to be installed on each habitable level in new residential structures. This means properties must have approved devices on each floor that have fuel burning appliances, heaters, fireplaces or attached garages. 3. Frayed or Exposed Electrical Wiring — This might seem as an obvious one, but you may be surprised by how many homes have issues with this. Older homes, and often homes bought as ‘Do It Yourself” projects, have frayed or exposed electrical wiring. These items must be corrected. Additionally, missing light switch and/or missing outlet covers must be replaced. Finally, open j-boxes must be covered and most exterior outlets require weatherproof covers. 4. Chipped and Peeling Paint on Pre-1978 Structures – The feared lead paint problem still lingers and many homes still face this issue. For homes built prior to 1978, where any areas of chipped or peeling paint are found along the interior or exterior of the home, it must be corrected. This includes scraping and repainting the affected areas. Additionally, all paint chips lying along the ground or areas nearby must also be collected and completely removed from the premises. 5. Roof Condition / Leaking – Regulations provide that the roof must not leak or allow for any moisture to enter the home. In addition, the roof should be able to properly function for a minimum of two remaining years. In circumstances where this is not the case, the appraiser must note whether the roof needs repair or requires re-roofing. 6. Insulation in the Attic– Common sense would indicate that there would already be insulation in the attic space, and the spaces above the ceiling. An appraiser is required to look into the attic spaces to verify that insulation is there. It goes without saying that if there is no insulation, heating/cooling bills will be much higher, but the appraiser will also have to condition the appraisal for this. Similar to when the utilities are turned off, the appraiser will need to make another trip to the property, often for another fee, to verify insulation has been added. 7. Missing Earthquake Strapping, TPRV’s and Overflow Pipes on Water Heaters – With the exception of ‘tankless’ water heaters, water heaters are required to have double earthquake strapping placed along the lower and upper thirds of the tank. In addition, temperature pressure relief valves and overflow pipes are required as well. Although trying to complete all potential FHA repair items prior to the appraiser’s inspection may not be possible, at least now you’re aware of several of the most common repairs that tend to delay the FHA loan process. Finally, remember that FHA appraisals are no guarantee a property is free from defects. The appraisal ‘primarily’ establishes value of a property for mortgage insurance purposes. Buyers should always secure their own home inspections through qualified professionals to get a better overall picture about the overall condition of a property. I hope you found this helpful and if you have any additional questions please don’t hesitate to call. The ‘Salt Lake Appraisal Group’ specializes in real estate appraisals including: divorce appraisals, bankruptcy appraisals, date of death appraisals, estate appraisals, pre-listing appraisals and more throughout the Salt Lake area. For more information contact us at (801) 260-2828, visit our website at AspenAppraising.com. You can also follow us on Twitter, YouTube, or “LIKE” our Facebook page as well. Also, make sure to check out our ‘Testimonial’ page and see what others are saying about Matt Frentheway and the ‘Aspen Appraisal Group.’
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4 Comments

  1. Gary Kristensen
    January 14, 2014

    I love your appraisal blog. Great tips. I hope that by posting a comment, it subscribes me. Keep up the great work in Salt Lake.

    • Matt Frentheway
      October 23, 2014

      Thank you Gary, we will make sure you are subscribed, and thanks for reading!

  2. Gary Kristensen
    January 2, 2014

    Love your blog Matt and I love the great real estate appraisal work that you do in Salt Lake. Keep it up.

    • Matt Frentheway
      October 23, 2014

      Thank you Gary, we appreciate your input.

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