There are three ways to look really old:
- Never wear sunscreen (guilty)
- Frequently reference the “killer U2 concert” you saw at the Red Rocks Amphitheater in 1983 (“Dude, I like totally cried when Bono sang ‘Bloody Sunday’…”)
or - Refuse FHA offers because you’re concerned about condition issues.
We recently had a listing agent refuse to accept the only solid offer she’d received for her listing because it involved FHA financing.
She was concerned that the FHA appraiser would flag too many condition issues – and her sellers had already told her they would make no repairs.
We looked at the listing photos carefully and saw no serious issues – so the listing agent walked away from her only viable offer for no reason.
A few things:
FHA appraisers = Conventional appraisers.
- There is not a pool of appraisers who only do FHA appraisals. The same people who do FHA appraisals also do conventional appraisals. FHA appraisals are just on a different form, but appraisers use the same technique and perspective for both types of appraisals.
FHA stopped requiring clear pest inspections in late 2005 – FHA TRANSACTIONS CAN BE “AS IS.”
- This fosters many of the misconceptions about FHA and condition, as FHA required clear pest reports until late 2005 – just like VA does still.
FHA ≠ VA.
- This, too, fosters misconceptions, as many agents consider both types of government-sponsored financing (FHA and VA) to be very similar or even the same. They are not even close to the same for many reasons that I won’t discuss here. But the biggest difference is that VA requires clear pest reports, and FHA does not.
Both FHA and Conventional appraisers call out the same condition issues – if they are visible and obvious.
- When condition or health and safety issues are obvious, appraisers must call them out no matter what. These issues include missing handrails, missing “built-in” appliances, broken windows, standing water, stagnant swimming pools, excessive dry rot, exposed electrical wiring, unstrapped water heaters, water leaks, and badly aged or damaged roofs.
FHA appraisals do have stricter inspection standards – but in practice, appraisers still tend to just call out glaring issues.
The one thing we do see called out more for FHA: peeling paint.
- There is one thing we do see more often called out with FHA, and that is peeling paint. But – this is something we’ve remedied numerous times by simply sending out a handyman to scrape and paint the worst areas.
And no, you don’t need a licensed contractor to do cosmetic work.
For the listing I discussed at the top of this blog, we offered to send out a handyman at our expense to do cosmetic repairs, if any were called out (like peeling paint).
The listing agent refused our offer, though, because she insisted that only “licensed contractors” could perform any type of repair.
Sigh.
Meanwhile, back at the ranch, her listing is still sitting…
