Friday, March 4, 2016

Things that appraisers believe are adverse conditions that must be repaired prior to closing...Part 1...

As I spent Monday morning painting 2 exterior door frames and trim on one of my listings, I thought of a great idea for a series of blog posts...I think it will be educational to post items that appraisers note in their appraisals as adverse conditions that require repairs prior to funding a buyers and sellers take note!

I should preface all of this by disclaiming that appraisers will have differing thoughts on what will constitute an issue that must be fixed as a condition of making a loan. This is the perfect case in point.

This particular home, a +/- 10 year old home in Natomas, was initially in contract with a buyer who ultimately could not complete the purchase -- that buyer's appraiser did not call out any adverse conditions requiring repairs. The home went back on the market, and the new buyer had to have her own appraisal. That appraiser noted the exposed wood in his appraisal report. On the photos, you will see the worn paint on the photos to the left and them my handiwork to the right. My seller has relocated to another state so I gladly painted this for her. Initially I had planned just to touch up the areas with exposed wood, but the new paint was more vibrant than the existing paint. So I ended up painting the entire exterior door frame and trim. And I think it turned out looking pretty nice.

Appraisers are generally on the look-out for health and safety issues. Missing smoke detectors. Missing carbon monoxide detectors. Unstrapped or improperly strapped water heaters. Missing deck railing. Exposed electrical wiring. Obvious dryrot. You get the idea.

This appraiser was a little picky to call this an adverse condition in my opinion. In my experience, most appraisers will let something like this slide -- as the first appraiser did in this case -- unless it is really bad. By really bad, I mean like there is a significant surface area with exposed wood (more than this anyway), or peeling paint all over the house.

Peeling paint on a home built before 1978 can have other implications (like if may be lead-based paint that requires special remediation), and that is another post for another time.

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