Not Meeting Minimum FHA Requirements Yet Passing...

Asked by R D B, Woodbridge, VA Mon Dec 8, 2008

I understand that an fha appraisal is a no guarantee the home needs repairs once you've moved in , however I am also aware of MINIMUM requirements that an fha loan appraisal has. One thing that I have not been able to find out is that what if you bought a home that was approved for an FHA, but VASTLY does NOT meet many minimum requirements? Is there anything a shocked homeowner can do?

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Cindy Jones, Agent, Alexandira, VA
Tue Dec 9, 2008
I'm shocked that you did not notice some of the basic things you are mentioning just by walking through the property with your agent. Listing agents love to tell you that you can't do an inspection on a foreclosure property but most banks not only allow them but they also encourage them. As far as the FHA inspector it does sound as if there may be an issue. You need a copy of the report to determine what was reviewed and noted. Talk to your agent, hopefully you had one and then an attorney to see if you have any recourse.
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Lori Rossi, Agent, Warwick, RI
Tue Dec 9, 2008
I would seek legal advise. I am not local, but in RI-the FHA appraiser needs to sign off stating that utilities were on during the appraisal,and are at least in working order. Especially in bank owned properties where the water and utilities are shut off. I have had cases where my buyer turned on the utilities for inspection/appraisal purposes. I'm assuming since it is a government program that guidelines are the same in all states.
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Luisa Rodrig…, Agent, Woodbridge, VA
Tue Dec 9, 2008
I am so sorry that you were advised not to get a home inspection. FHA appraisers are not home inspectors, so they will not catch things that an inspector will find. It is true that some banks, and only one that I can think of at the moment, that will not accept anything other than an informational home inspection. However, most banks managing bank-owned homes understand that buyers need to be able to walk away from the table if there are major problems with home. As a buyer's agent, I always advice that my clients get a home inspection, regardless of whether it is a bank owned property that was forclosed on, a short sale, or any other type of property. And although it depends on the bank, they will turn on the utilities for you to have the inspection or at least allow you to do it on your own dime. If the bank will not allow a home inspection, I always urge my clients to look at the next home. The risk is just not worth it.

As far as what you can do now, I am not a lawyer and as Realtors we cannot provide legal advice. Therefore, I would recommend that you seek the advice of someone licensed to practice law so that you can get the best advice possible.
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Vicky Chrisn…, Agent, Purcellvile, VA
Tue Dec 9, 2008
I would say this is an issue, but I don't understand how it would happen.

These seem like major issues... how is it that you didn't know the issues existed? Did you see the house?

Yes, you can and should report the appraiser (don't do this until you have a copy of the report) to the lender and to the appraisal board. However, that appraiser's job is not to protect you, it is to protect the lender. So, other than the satisfaction of knowing that you are reporting someone who has done a TERRIBLE job, therefore posssibly protecting future victims, you don't get anything from it.

Who advised you not to do a home inspection? I advise my clients that if the seller won't turn on the utilities not to buy the darn thing. Did you have a real estate agent - and by that, I do not mean did you talk to an agent who helped you, but was the agent working FOR you as your buyers agent?
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R D B, Home Buyer, Woodbridge, VA
Mon Dec 8, 2008
Let me re-phrase something: I meant to write that I'm aware an fha does not guarantee that there will be no repairs.

And let me be specific: Our home was previously sabotaged- main water line SAWED OFF, along with other areas of plumbing. Also, it IS invested with roaches, the water heater is rusted through, cannot use the kitchen counters due to broken-off surface, cannot use all cabinets due to water damage... the list goes on. We were advised to not get a home inspection because we were told that since it is a foreclosure they wouldn't be able to turn on any of the utilities and therefore an inspection is useless.
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