What Are FHA Appraisers Looking For?

If you have decided to apply for an FHA loan to purchase a home, or if you are attempting to sell your home to someone with FHA financing, there are some special appraisal facts of which you should be aware. FHA stands for Federal Housing Administration and is an agency of the federal government. Therefore, the same rules apply around the country for any home bought using an FHA insured loan. These appraisal requirements are more stringent than those for conventional loans and may seem confusing to first-time buyers. Sammco is here to help you understand FHA appraisal requirements and ensure that your home complies with all federal regulations.

The Cardinal Rules for FHA Loans

There are a few things homeowners can do when their properties are being appraised by the FHA for sale. These include:

  • Turn on utilities. Even if the house is empty, water, electricity and gas should be turned on in order to allow appraisers to test the home’s systems and appliances. Everything must function properly in order to get clearance from FHA.
  • Ensure adequate drainage. There must be a proper perimeter to permit drainage around the house. Flooding in basements can be a disqualifier of a home.
  • Check heating and AC. Heating units are required to be in good working order, as are any wall or central air conditioning units.
  • Be sure water is available. Appraisers check for both hot and cold running water as well as flush the toilets to be sure they are all working. Adequate water pressure must be present and all water fixtures must work properly as well as the water heater. The water heater must also be strapped according to local codes.
  • Check attics and crawlspaces. Appraisers will look for vents in the attic to ensure adequate ventilation. There should be no exposed or frayed wires or visible sunlight. There should be no standing water in crawlspaces. It may speed the process to remove excessive debris from attics and crawlspaces.
  • Lead-based paint should be covered or removed. Prior to 1978, lead-based paint was used in many homes. If this paint is chipping, peeling or flaking, it must be carefully removed and repainted with a safe emulsion.
  • Cover electrical outlets. All electrical outlets must work and should have a cover plate.
  • Get rid of termites. An active termite infestation must be treated and solved before the closing of escrow.
  • Clean it up. There should be no dangling wires, broken windows, missing fixtures, missing sheet rock or trip hazards.
  • Keep alarms working. All smoke detectors and carbon monoxide detectors required by local law must be in place and working.

Common cosmetic problems are not usually a problem as long as there are no health or safety issues associated with them. If there are health or safety hazards present, they must be resolved according to requirements and the appraiser will request another inspection to confirm.

For more information about FHA and Conventional appraisal requirements, contact Sammco today.

The ‘Sammco Appraisal Group’ specializes in divorce appraisals, bankruptcy appraisals, date of death appraisals, estate appraisals, pre-listing appraisals and more throughout the Orange County area.

For more information contact us at (714) 872-8770 or (949) 566-8833, visit our website Orangecountyappraisers.org, or email us at Kevco1@aol.com. You can also follow us on YouTube, or “LIKE” our Facebook page as well. Also, make sure to check out our ‘Praise’ page and see what others are saying about Kevin Howell and the ‘Sammco Appraisal Group.’

Thinking of hiring the cheapest appraiser?

Orangecountyappraiser1If you have never worked with an appraiser before, you probably wouldn’t realize that all appraisers are not created equal and can be very different depending on their experience, education, and knowledge of your market area. 

Anyone who has had a bad experience with an appraiser because they hired the cheapest and fastest will tell you it’s simply not worth the risk. So don’t wait for your own bad experience to be a wake-up call when hiring an appraiser for your needs.

It can be tempting to hire a low fee appraiser. It seems like just a formality anyway. However, when it comes to hiring a professional appraiser for such an important job remember that you often get what you pay for!

It’s not worth trying to save $50 or $100 on the cost of an appraisal when there’s a very good chance you may not receive the quality report you deserve if your main hiring decision was simply to go with the cheapest appraiser. So when it comes to working within your budget, don’t select an appraiser simply to save a couple bucks because it could cost you dearly in the long run.

There are a few ways to help ensure you are hiring a quality appraiser. First, you should always ask for referrals from people you know and trust or from reputable real estate professionals within your market area. You can also look online for appraisers that come up repeatedly and start your research from there.

In addition, you should always pre-screen an appraiser. Any appraiser who’s not willing to answer a few questions for you up front is probably not someone you should be entrusting with an important job like appraising your home.

Interviewing your appraiser and the questions you should be asking:

  • Besides full name and telephone number, you should also ask for the appraiser’s license or certification number. This lets the appraiser know you are serious about the person you are hiring. If they won’t share this information with you this is a red flag and you should consider calling someone else. Save yourself some time and tell them you’ll need that information before you can speak with them any further.
  • Find out the location of the appraiser’s “home base” or office. It’s a very good idea to work with an appraiser who has completed a substantial amount of work in your area and be afraid to ask how many appraisals they’ve completed in your area over the past two years. It’s very important for the appraiser to be familiar with your market area in order to produce an accurate and reliable appraisal report. Additionally, keep in mind that when appraisers are slow they may be willing to reduce their fees and drive great distances into market areas they are unfamiliar with, so beware.
  • Ask how long they’ve been appraising and if they’ve ever been sanctioned. 5 to10 years of experience is ideal and you should avoid hiring appraisers who’ve been sanctioned disciplined in the past by the OREA.
  • Find out what level of licensing they have. An appraiser’s license can vary from Trainee to Certified General. Never hire a trainee unless a fully certified mentor is involved in both the appraisal process and final analysis. In California, appraisers with “AL” designations mean they can perform appraisals on properties worth up to $1M while appraisers with “AR” designations have more training and education and can perform appraisals on properties up to and above $1M. Appraisers with “AG” designations allow them to perform appraisals on commercial in addition to $1M plus properties.

I hope you found this helpful and if you have any questions about the appraisal process please call us anytime.

The ‘Sammco Appraisal Group’ specializes in divorce appraisals, bankruptcy appraisals, date of death appraisals, estate appraisals, pre-listing appraisals and more throughout the Orange County area.

For more information contact us at (714) 872-8770 or (949) 566-8833, visit our website Orangecountyappraisers.org, or email us at Kevco1@aol.com. You can also follow us on YouTube, or “LIKE” our Facebook page as well. Also, make sure to check out our ‘Praise’ page and see what others are saying about Kevin Howell and the ‘Sammco Appraisal Group.’

 

 

FHA Kitchen Requirements

FHA does not require that all kitchen appliances be present.

The issue regarding appliances is whether they’re ‘built-in’ or ‘slide-in.’ Built-in appliances are considered to be real property and are required by FHA however; slide-in appliances such as a slide-in stove are considered personal property and therefore are not typically required by FHA. A built-in stove is required to be present. Regardless of built-in or slide-in; any appliances that are present must be in good working order and not a threat to the safety of the home or its occupants. Additionally, if a slide-in ‘gas’ stove is not present then the gas line leading to the stove area must be capped; which is generally the same for ‘gas’ dryers.

In regard to dishwashers, FHA typically requires a dishwasher be installed or present when a dishwasher opening and plumbing are present and intended for such use. This item is often overlooked on ‘flip’ properties where a kitchen has been remodeled but no dishwasher was installed in the intended opening.

Utilities to the home must be on and in order to check the proper working order of the appliances. Also, keep in mind that the lack of appliances often raises red flags as to the proper working order of utilities, especially functional electricity and safe wiring to outlets.

Another requirement is that the kitchen must have a working sink with sewage and potable water as well as adequate kitchen counter space for occupants to be able to prepare meals.

An operable refrigerator is not one of the FHA requirements for kitchens. The kitchen design and space should allow for an area to place a functional refrigerator even though it’s not a requirement. Food storage is not one of the details necessary for food preparation based on FHA guidelines.

I hope you found this helpful and if you have any additional questions, thoughts or comments please leave them down below.

The ‘Sammco Appraisal Group’ specializes in divorce appraisals, bankruptcy appraisals, date of death appraisals, estate appraisals, pre-listing appraisals and more throughout the Orange County area.

For more information contact us at (714) 872-8770 or (949) 566-8833, visit our website Orangecountyappraisers.org, or email us at Kevco1@aol.com. You can also follow us on YouTube, or “LIKE” our Facebook page as well. Also, make sure to check out our ‘Praise’ page and see what others are saying about Kevin Howell and the ‘Sammco Appraisal Group.’