Common Pitfalls

    Homes today require a minimum property condition level in order to quality for mortgage lending.  Property condition levels are often affected by a single condition issue, such as a roof leak or section of missing siding.  A home does not have to be old for this to affect the property condition rating.  Following are some examples of the more common pitfalls that occur during the appraisal process.  If any of these condition pitfalls apply to you:  please call the appraiser immediately to discuss!

 

  1. Roof:  The roof of the home must appear to be in good enough condition that it would be reasonable to expect that the roof will last at least two years without replacement.  When shingles are curling, warn at the edges, missing shingles, or has any visible damage - this assumption cannot be made.  A roof leak will cause a low condition rating. 
  2. Foundation:  Foundation issues are a common pitfall.  Bulging basement walls, crumbling basement walls, and large amount of seepage or water in the basement are all common pitfalls.
  3. Electrical:  Most lenders require the electricity to be on during the appraisal inspection (important to know when appraising vacant homes).  While old electrical systems are generally acceptable, electrical issues can be a pitfall.  In the event that your home has a Federal Pacific Stab Lock system, knob and tube wiring, or other system that appears to be a hazard, your home may require updating prior to qualifying for a mortgage.
  4. Plumbing:  Most lenders require that the water be on during the appraisal inspection.  Items such as leaking pipes are condition issues that will cause a low condition rating.
  5. General:  Any deferred maintenance or adverse condition issue that would generally be considered to affect the safety, soundness, or structural integrity of the home would be a condition issue that will affect the ability to mortgage the home.
  6. Owned Materials for Future Projects:  This is a common misconception.  Frequently, a home owner will have the materials on site for future improvements.  Examples include:  new flooring material, new windows, new shingles, new lumber for a proposed deck, new siding, etc.  For most appraisal assignments, the appraisal is being completed in the homes "as is" condition at the moment that the appraisal inspection is taking place.  Any material or items that are not installed or fastened are considered to be personal property, and cannot be considered in the value of the home.
  7. Partially Finished Projects:  partially finished remodeling, updating, or renovation projects are also a common appraisal pitfall.  This is a common issue among home owners that are in the middle of a renovation project when applying for a equity or primary mortgage.  For example, a gutted bathroom or kitchen is a significant appraisal pitfall.

If you believe that your home is affected by any of these issues, please call the appraiser as soon as possible to discuss.  It is generally smart to discuss these issues prior to the appraisal inspection.