Tuesday, October 18, 2016

Things that appraisers believe are adverse conditions that must be repaired prior to closing...Part 2...

A few months ago I wrote a post showing what one appraiser called out as an adverse condition -- exposed raw wood that needed to be repainted prior to closing...I felt that appraiser was being pretty picky since it was a few square inches of lightly worn paint on a 10-year old home.

Today's scenario is much more egregious -- this is some very obvious dryrot on the exterior siding of the house. Luckily, when I met the sellers to list the property, I noticed the deteriorated siding and trim, and we got a pest inspection before the house went on the market. The seller disclosed the pest inspection report to the buyer in advance, and the buyer agreed to take the house as-is...however the appraiser came along and required the repair work be done prior to closing the transaction. So, the buyer ended up paying for this work to be completed before closing.

One thing to note -- this was required of a conventional loan. A common misconception is that only FHA or VA loan appraisers will note deficiencies in a property and require repairs prior to closing. Conventional appraisers will too if they feel the damage is severe enough, or if the item poses a health and safety hazard.

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