Whether buying or selling a house, an appraisal is an important and necessary step in any transaction. Due dates are set for the appraisal to be completed, and after that, delays can push the due date back farther and farther and become more difficult for your clients as time goes on.
Recently, there has been an uptick in closing delays due to tougher requirements on some home appraisals. Along with a shortage of appraisers and increase of homes being sold, these tougher requirements not being met can push your clients due date back significantly and can make closing harder.
Strict Appraisal Requirements
FHA and VA home appraisals specifically have proven to be more rigorous due to their focus on safety and making sure the home fits “minimum standards of living” before purchase.
In conventional home appraisals, repair issues or defects may lower a home’s value but may not prevent mortgage loan approval. With FHA and VA home appraisals; even if a home has an acceptable value, a home which does not fit the appraisers’ minimum standards of living is unlikely to receive loan approval until the home is made safe again.
Here are some things for your clients to look out for as they are buying or selling a home which could hinder the appraisal.
Carbon Monoxide detectors – make sure the home is fitted with carbon monoxide detectors which are in good, working condition.
Earthquake straps on water heaters – though your clients may not live in an earthquake prone area, earthquake straps are becoming more prevalent in appraisal requirements. They will ensure the water heater does not come loose from the walls and create more water damage in the case of seismic activity.
Smoke detectors – smoke detectors are obvious, but even something as small as smoke detector batteries not working can set your appraisal back.
Other – structural integrity, code compliance, etc. the appraiser could have several other requirements they are looking for while appraising the home. So contact an appraiser to find out what they may be looking out for in the appraisal.
The appraisal foundation encourages realtors to actively communicate with appraisers. If your client is selling the house, make sure they are aware that these aspects of the home may be checked and if the home does not meet these standards, they may have to pay to fix them before the house can be sold. If your client is buying the home, make sure they are aware of these reasons why the appraisal could be taking longer.
Buying a home is a major financial undertaking. We strive to educate clients and referral partners on all aspects of home financing to help alleviate concerns and ensure a smooth home purchasing experience. Call or email PRM today!