What Is An Appraisal?
An appraisal is the estimated value of a home determined by an inspection of the property and comparison of recently sold homes in the area to estimate the value.
Who Appraises The Home?
Appraisals must be conducted by a licensed, third-party appraiser who has no connection to the buyer, seller or lender. That way, all parties can be sure the determined market value is fair, unbiased and free of any influence from any party that could benefit.
Home Appraisal Checklist: What Do Appraisers Look For?
The appraiser’s job is to assign a total, fair market value to the property. In order to do this, they need to look for certain things that can affect the price or impact the lender’s decision to loan you money for the home. These are:
- Health and safety hazards
- Structural integrity of the home
- The condition of the home
- Upgrades or improvements
- Visible defects
- Any conditions set by the lender
Appraisers can order any inspections they feel are necessary, such as a roof, pest inspection or water inspection if there are signs of potential issues.
If the appraisal or inspection finds any conditions that don’t meet the lender’s requirements, they’ll have to be corrected before you can move in.
Standard Requirements
For properties located in States that mandate the installation of CO Detectors, Smoke Alarms and/or Water Heater Strapping requirements, CRESTICO, INC. requires the following when an Appraisal or Property Inspection note these items are required but missing or improperly installed.
Conventional Loan Types
The Appraiser indicates CO Detectors or Smoke Alarms are missing, or that inadequate strapping of a Water Heater is noted and marks the appraisal ‘‘Subject To’’ completion of these items, the completed work must be re-certified by the appraiser and a 1004-D, if there are other repairs or inspection items noted.
If the Appraisal, however, notes the above items are missing or the appraisal is marked ‘‘As Is,’’ and the appraiser comments these items are missing or incomplete, CRESTICO, INC. will accept the following to support the work has been satisfactorily completed:
Loan Purchases:
- Certification Form completed and signed by either the Seller or Agent(s);
- Must include receipt/proof of purchase; and
- Photo(s) of installation (water heater strapping).
- One picture of the home’s front entrance must also be included
Loan Refinances:
- Certification Form completed and signed by Borrower(s);
- Must include receipt/proof of purchase; and
- Photo(s) of installation (water heater strapping).
- One picture of the home’s front entrance must also be included.
FHA and USDA Loan Types
According to Department of Housing and Urban Development (HUD) property guidelines.
- The lot to be positioned so drainage moves away from the house, not toward it
- Handrails alongside steps and stairways
- A foundation that can withstand “all normal loads imposed on it”
- Proper ventilation and fully functional mechanical systems
- A roof that keeps moisture from entering the home (a roof that needs to be replaced within 2 years must be reported)
- Lead-based paint jobs (often in homes built before 1978)
- Defective paint on properties built after 1978 (chipping, peeling or flaking paint)
- Evidence of termites (though termite testing is not required by the FHA)
For a complete checklist of these and other appraisal requirements, refer to HUD Handbook 4000.1.
Veterans Administrations (V.A.) Loan Types
If the Appraiser indicates CO Detectors or Smoke Alarms are missing or that inadequate strapping of a water heater exists, the LAPP Reviewers should not indicate these items on the NOV regardless if the appraisal was done ‘‘As Is’’ or ‘‘Subject To.” VA does not consider these items to be part of the Federal Minimum Property Requirements. The reviewer will, however, condition for these items to be completed. To satisfy the condition, we will accept the same Certification Form and documentation evidence as outlined above for Conventional loans with ‘‘As Is” appraisals.
Note: If the Appraisal, does not indicate that these items are not installed but completes the appraisal as meeting minimum property standards we will assume that they are in place.