Appraisal Repairs - What's Required and What's Not

When selling a home, most homeowners hold their breath while waiting for the results of a home appraisal - concerned with the value of the home. Will the value be high enough and acceptable for the buyers? Will the value meet requirements of the buyers loan? But other things can surface during an appraisal - like repairs.

appraisal repairs

While an appraisal is not a home inspection, and an appraiser is not looking for non-working light switches, missing baseboards, or doors that don’t close easily, an appraiser will notice signs of neglect such as broken windows, chipped paint, cracked walls, etc.

 

What Does An Appraiser Look For?

Besides square footage, and condition of the home to determine overall value, an appraiser is also looking for safety hazards or things that could cause damage to the house. Why? Because the different types of loans (VA, FHA, Conventional Loan) have their own requirements. In some cases the lender has their own set of requirements beyond those. It’s almost like the appraiser is performing a mini-inspection.

Here are common things an appraiser looks for:

  • Stairs: Safety rails must be proper height, in good condition and properly secured for safety reasons.
  • Paint Condition: Peeling or chipped paint on the exterior or interior of a home (or on property fences or structures) must be fixed if the home was built before 1978 due to safety concerns with lead-based paint.
  • Roof Condition: Roof must have more than 2 years of life left, or it is required to be replaced. How does an appraiser know? By looking at the condition of the roof tiles or shingles and looking inside the house for signs of water damage.
  • Rotting or Bare Wood
  • Utilities: Plumbing, electrical, and HVAC (heating, ventilation, and air conditioning) must be in working condition
 

What Repairs Are Required?

When an appraiser finds something wrong, it is put into the appraisal in writing, and it’s written in legalese due to loan requirements. Sometimes this makes it hard to determine whether a repair is required or not - it all depends on how it is phrased.

Must Be Repaired:

  • "appraisal subject to [insert item] being done" means it must be repaired.
  • Might Need To Be Repaired:

  • "the appraised value is subject to further inspection of [insert item] by a qualified professional and compliance to results" means there must be a further inspection, but whether or not it needs to be repaired relies on the results of the secondary inspection.
  • Recommended But Not Required To Be Repaired:

  • "appears to be an issue with [insert item], recommend inspection by a qualified professional be conducted to verify problem is fixed" means the repair is optional.
  • However, if this appraisal is for a divorce for example, different appraisal form is used and repairs are only recommended, not required. This will also be reflected in the wording used.

     

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