With the current state of the housing market and economy more and more buyers are getting FHA and USDA loans to be able to get into a home. What does this mean for you as a seller?
FHA requires the appraiser be FHA certified and requires them to inspect and see if the home meets FHA standards. You, as a seller might be thinking, my home is in great shape, there aren’t any repairs that are needed.
To give you an idea of the things that an appraiser will look for during an FHA appraisal:
- Test the appliances to ensure they are in working order.
- Test the AC and heating system
- If home was constructed before 1978 then the appraiser will look for peeling, chipping and flaking paint.
- Test the water for pressure, heat, and smell)
- Inspect the attic space even if there is only a scuttle access to the attic.
- Inspect any crawl spaces (Must be 18″ in height)
- Inspect the electrical panel, light switches, and outlets
- The appraiser must flush the toilets and run the water in all sinks, bathtubs and showers
- And more…….
As a buyer or seller I’m sure you have heard of FHA and the requirements needed. Seller’s aren’t always willing to take FHA, because they are thinking the requirements and the repairs that are needed are way to strict. FHA looks for the 3 S’s. Safe, Secure, and Sound.
Now that we covered some of the things that appraisers look for here are a few things that you might not be aware of:
Open up that Attic: If your property has an attic, whether it’s been closed off or just a scuttle space, the appraiser must do at least a head and shoulders inspection of the attic space. Make sure the attic space or scuttle is clear for the appraiser to get to and unsealed if it has been sealed off.
Hoarder Inspection: If your home is cluttered and should be on the show “Hoarders” the property will have to be cleaned up and the floors and walls clear so the appraiser can inspect the property by a visual inspection. The appraiser will not move items to be able to see the floors and walls.
The Whole Package: Any structure that falls within the parcel lines of the property has to be inspected and meet FHA standard. So that run down barn or garage that the buyers might be planning on tearing down, will either have to meet FHA standards or removed prior to closing and the FHA loan being issued. Just remember FHA Standards aren’t for just the main home.
Old Sales: If your home has been on the market for some time and your agent pulled comparable at the start of your home going on the market, some of those sales might not be able to be used. The appraiser has to use sales within a 12 month period prior to the date of value.
Pool Safety: Each area has it’s own requirements for pool safety, so FHA will follow the local authority on their standards for pool safety. There is no one universal standard for all states, so it’s all about local standards.
Calling FHA: If you have a question on FHA or you want to check on a certain item you think might be a problem for FHA, your agent can give FHA a call with any questions you have on FHA standards.
HUD is extremely helpful and polite and willing to clear up any question or concern you may have.
Hopefully this sheds some light on FHA for both buyers and sellers and clears up some concerns you might have with FHA mortgages. You can always visit HUD’s website for more information.