What Repairs Will A Conventional Appraiser Ask For

Ego, Hubris, Hot Markets, & WAMU's Collapse

Realtors are often frustrated about "condition" and "health & safety" issues that get called out by appraisers, and they come to us for guidance.

They obviously want to avoid getting conditions called out by appraisers that will either cost too much to repair, delay closings, or kill deals altogether.

Our Appraisal Manager, Jennifer Muzzall, provided the below list of common items to watch for. She further broke them down by "FHA and Conventional" and "Exclusive for FHA."

BUT – this is the key point: the rules are NOT hard and fast!

There is a huge amount of discretion left to both the appraiser and the underwriter.

Underwriters need to make sure they have a salable loan so they will often require repairs that are on the "FHA-only" list, even for conventional loans.

For example, I have seen conventional underwriters require pool repairs and flooring repairs numerous times.

Similarly, appraisers need to protect their licenses and reputations, so they can never turn a blind eye to anything significant.

But, seasoned appraisers will do their best to avoid calling out too much or pointing out "ordinary" wear, tear and settling for example.

This is again why we maintain our own appraisal panel – so we can make sure our appraisers are very good at making those judgment calls.

In general, as I have mentioned many times, the only condition issue that seems to surface more often with FHA is peeling paint.

FINAL TIP: Any condition issues referenced in MLS will have to be called out by the appraiser.

Hence, agents should purge all condition-related comments from the MLS before the appraisal is ordered if they do not want those conditions called out.

Common Condition and Health & Safety Issues

Common for both FHA and Conventional

Exposed Electric Wires
Active Roof Leaks
Broken windows
Bars on windows without quick release
Handrails on stairs and decks
Smoke detectors – one per bedroom, one in the hall outside of the bedrooms, one on each level
CO detector – one per level installed in the hallway outside of bedrooms
Water Heater – requires at least 2 two straps

Exclusive for FHA

Roof nearing the end of its life – appraiser must warrant that the roof has at least 3 years life left. If there is doubt, the appraiser can ask for an independent roof certificate
Utilities MUST be on and working
Built-in appliances must be installed
Appliances must be working
Heater must be working & able to heat the home to 58 degrees
Peeling paint must be scraped & re-painted
Attic will be inspected for leaks & pest infestation
Crawl will be inspected for water intrusion & pest infestation
Pool must be free of debris & pool equipment must be working
Walls/ceilings should be free of large cracks

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Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167