HUD to require appraisers to determine property condition?

[Nick Gromicko]

In March a new HUD GSE (FNMA & FHLMC) rule is going to go into effect that requires appraisers of properties being financed by HUD to express an opinion as to their condition.

See: http://www.nachi.org/documents/hud-g...t-jan-2012.pdf

[Gary Farnsworth]

I hope HUD understands that this will be an "opinion". Actual conditions will vary. Most all appraisers are not licensed or trained to dictate what a defect is, or is not, in any state. Amazing.

[Nick Gromicko]

I'm going to argue that this is a positive thing for the home inspection industry.

[Dan Bowers, CMI]

Why do you think that

[Gary Farnsworth]

Perhaps he thinks that appraisers will miss something, the buyers will find out about it, and the reputation of appraisers will sink further. Complaints to whom, or who ever hired them, will follow, along with lawsuits.

It just seems these days that its the honest people who are threatened. Corruption, lies, dictating what you want, and not the real truth, are all the new norm.

It is all in how large that thumb over your head is. Too many liberals, too many laws, rules and regulations, heck pretty soon we will have to ask the government which bathroom to use, and how to use it, how much paper and water to use, how much time is allowed, how to clean up a mess, all according to their laws. It is getting to be that stupid.

[Nick Gromicko]

Getting appraisers to remind everyone that condition, not just value, is important too... drums up more full home inspections.

[Michael Larson]

There has been confusion in the public mind between home inspections and appraisals for a very long time.

Now that they are required to report on "conditions" it may well make it worse.

IMHO of course.

[James E. Braun, CMI]

I think Nick is onto something there. Appraisers are noting in their reports about stains, mold, foundation cracks, roof conditions and visual electrical, and are calling them out to be evaluated. I book several jobs a year, due to this. If they got to comment on a how bad of a condition that a home is, the underwriter of the loan will probably want it to be verified with a home inspection.
If I was an appraiser I would ask for a copy of the home inspection before I even viewed the property, just to cover my backside. I would just note in the appraisal report the condition of things that are noted in the home inspection.

[Michael Larson]

A full home inspection should be performed BEFORE any appraisals but unfortunately I don't see this being required.

[Christopher Currins]

Originally Posted by jbraun

If I was an appraiser I would ask for a copy of the home inspection before I even viewed the property, just to cover my backside. I would just note in the appraisal report the condition of things that are noted in the home inspection.

That's a great theory. But we all know all home inspectors/inspections are not created equal.

Sad but true.

[James E. Braun, CMI]

Wow, the Q4 section is a killer for an appraiser: "meet or exceed applicable building codes".
The C4 section is a little better but still scary to an appraiser; "requires only minimal repairs to building components/mechanical systems".
I could see none to smart appraisers being sued over this. Big lawsuits too.
If I was an appraiser I would automatically ask for a home inspection report, and use that report to back up my condition statements in my appraisal.
Maybe NACHI could inform all appraisers that they have a right to see a recent home inspection report by a certified InterNACHI inspector before determining a condition of a property.
The Missouri Rural Development loan office tried to get the appraisers to state if the septic systems was operating correctly in their appraisal reports. Most appraisers are smart enough to ask for a septic inspection from a licensed inspector.

[Gary Farnsworth]

Seems like a way to mandate home inspections. Just double the appraiser fee, get an experienced home inspector to inspect the property along with the appraiser, the loan company is happy, the buyer is happy, done.

Yep. Mandate apprasals, mandate home inspections, right along with the transaction.

[Bruce A. King]

This has been going on for years here, also other contractors check the HUD property every few weeks or so and write "good" on the sheet. Good just seems to mean its still there, no doors or windows missing, no tree limbs poking through a wall or ceiling and no new vandalism. I do inspections every week for people who already have an inspection report of some sort in their hand and they are chuckling so hard they can hardly tell me the address.