Gibson

Difference between an appraiser and an inspector

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So here's the scoop - tried refinancing with a local credit union. Passed all the credit checks, locked in at a nice low rate and everything was going smooth until the appraiser showed up.

 

The appraiser took no less than 20 pictures and submitted them to the bank. The bank called me concerned about MANY items they saw that needed repair.

 

Now don't get me wrong, I'm really handy around my house, having rebuilt my kitchen, installed my own AC system (I'm a contractor), waterproofed the basement - so I figured I was in great shape. I know there are some issues I was in the middle of taking care of and I didn't feel they would be a problem, since it was a simple appraisal, not an inspection.

 

Boy was I wrong. They told me there are 6 items that needed repairs/inspections before anything can close with the loan.

 

1. There is a settlement crack on the exterior - It's been waterproofed repaired in the basement, but on the outside its noticeable (my fault for not repairing that issue, even though its not a problem). Bank wants a certified structural engineer to come out. Cost is $500.

 

2. A simple receptacle cover missing from a paint job we did in a bedroom. Cover must be installed by a licensed electrician with paperwork to prove. Same thing with a loose light fixture on the outside of the house.

 

3. SIdewalk is raised due to a tree root. This was going to be a summer project anyway, but now I need licensed professional contractor to tear the block out and repave, and must be inspected by an engineer AGAIN when completed.

 

4. I was in the middle of installing a new ceiling fan and had a hole in the ceiling where I was going to put the fan. You guessed it, pictures were taken and hole must either be covered over or if a fan is installed, must be done by a licensed electrical contractor. With paperwork.

 

All this must be done within 30 days, AND I have to pay for a re-appraisal, another $200.

 

I didn't think appraisers were this strict.

 

At this point, I'm considering cancelling the loan, spending the time to get the work done, and reapply with another bank.

 

 

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Most of the problems you describe certainly violate building codes.  They do need to be fixed.

 

There is a fine line between an appraiser and an inspector, but both have the same training,

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Everywhere I read online states that an appraiser's job is to simply appraise the house. I found this online:

 

"An appraiser normally does not itemize defects or make recommendations for fixing problems. They aren’t as concerned about structural integrity. The appraiser’s focus is on establishing a value for the property."

 

If there's a fine line between an inspector and an appraiser, why even have both? (Just venting here).

 

Meh. I'm just going to spend the weekend getting the simple things done.

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I had an appraiser do a drive by on a house I was selling a several years ago and his numbers were 30% less then my sale price. I called him up and had him come back over. I gave him a tour through my house and then told him we need to go for a drive. He had compared mine to others that had sold in an area where they had high fences and bars on the windows. I then asked him exactly how he made these comparisons and he just mumbled. Then I took him to another area closer where houses were selling for 50% more than mine. The next week we get a new appraisal and it was 10k over my sale price. 

 

Things have basically gone from one extreme to another. Around 2004-2008 a lot of these appraisers would drive by the houses, look up any similar houses that sold for a lot and then make the numbers "work". Now they are going to the other extreme and finding every reason they can to make things difficult. In other words now they are now being held accountable for what they sign their name to. During the bubble it didn't matter.

 

As long as your not too deep into it I would definitely cancel this one, repair everything yourself and start over. I think paying another 200. for an appraisal makes a lot more sense than spending a few thousand on things you can do for a fraction of the cost.

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It IS the appraiser's job to report a crack in the structure or foundation.  The upheaval of the  sidewalk as well. I agree with the electrical cover as being minor and not worth mentioning,

 

I don't know where you got that opinion about an appraiser not being concerned about the structural integrity of a property  because quite frankly that is pure bull.

 

The appraisers job is to put a value on the property by examining  the structure, and reporting any and all factors which would affect the value ( and marketability)  of the property. This might also include less tangible things...such as animal odors , such as cat urine, that permeate the premises. Why? Because it affects the marketability (and value) of the house.

 

You would be much better off making these repairs yourself, and applying elsewhere with a new appraisal. Once the repairs and improvements needed are reported on the appraisal the BANK requires the use of licensed contractors. Since you can do these things yourself I think that would be the wisest course of action.

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Painters are allowed to remove outlet covers (and then tape up the actual outlet).  It's technically a violation to get paint even on the plate, because it voids the "device UL listing".  So this is the common practice.  Someone at the BANK is in serious lack of clues.

 

In almost all jurisdictions, home (not businesses) owner-occupant (not renters or landlords) may do their own electrical repairs.  For major repairs, permit pulls and inspection are required even for the owner-occupant.  But putting the plate back on after painting is not even a repair.

 

I agree about the appraiser.  Anything that affects the value is of concern.  The wall outlet plate isn't. (edit: it's not a repair because it is not damaged ... plates are designed for easy removal).

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Thanks for all the replies.

 

I think I'll be holding off on this refinance for now. I'll need more than 30 days to do the repairs myself, but I can get it done.

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What no one has mentioned yet is that it is the LENDER who is requiring all these things be completed.  The appraiser reported all his/her findings to the lender that hired him - as appraisal guidelines require him to.  But the appraiser does not require the buyer to do anything.

 

Anyone applying for an FHA loan will find that the lender has a long list of things which must be done.  However, such a list is MUCH shorter than that same list would have been in the earlier FHA days.  FHA and even many property insurers hate cracked or uneven sidewalks/steps/pavement.

 

Gibson, if you did apply for FHA, that appraisal is not just in that lender's computer system.  It becomes a part of your record and is in HUD's system.  Changing lenders might not work.  Not certain  though.  I worked with FHA loans for many years, but never had anyone try to switch lenders for these reasons - that I knew about.  Keep in mind as a precaution.

 

Basically, the appraisal is for the lender and the inspection is for the borrower.  Inspections will often reveal many problems not seen on an appraisal, and even though major (to the borrower), these problems might mean nothing to the lender.

 

Good luck.

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Patz, this is not an FHA loan. And yes, the underwriter wants the repairs done, not the appraiser. Luckily I'm in contact with the underwriters via my mortgage agent.

 

I was a little pissed, but now I'm calmed down. I do see the banks POV. I work for a contractor and I've seen it first hand the shoddy work done by unprofessionals, fly-by-night companies that collect and bolt. They just want to protect their investment - they want someone to go back on in case a wire is hooked up wrong, or the wrong concrete is used, etc - I know I'm doing it right, but they don't know that.

 

I spoke with a friend a few hours ago who told me the underwriters may try to work with you on some things - such as getting everything done myself and having the engineer sign off on the work. Getting my list of questions together for tomorrow.

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Yes, it is frightening some of the things contractors do.  Had it happen in my current home.  I wish the appraisal had caught it, but it "wasn't on the list."

 

Best to you.  Sometimes underwriters can be people too.

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So now I'm chugging along on all these repairs, with the idea of calling another bank later on.

 

Then I have this thought: What if I use another bank, and THEY find something that may wind up requiring additional work? What if he catches something the other appraiser missed? At least with this set of repairs, I know the appraiser is coming back to reinspect only the issues listed on the report.

 

Ugh.

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Ok, an update: Everything the appraiser listed on the report is now completed by me. Long weekends and weekdays of hard work have paid off and everything looks really nice.

 

I've applied with another bank and flew through the application process in no time. Credit good, rate even lower than prior bank.

 

Now, what are the odds of THIS different bank using the same appraiser?

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Update: So the new appraiser will be here tomorrow. It will not be the same one. I've gone on a tear these last few weeks, going above and beyond what the original appraiser wanted done. Lots of repainting, landscaping, cosmetic repairs have been done.

 

This refinance is with Wells Fargo. I've read so many nightmare things about them online, it worried me about how this will go - but so far, they're 2 weeks ahead of the credit union I worked with. All my paperwork was sent and there has only been one glitch so far, a typing error with my name misspelled. I've been approved pending the appraisal.

 

Anyone else here deal with them during a refi?

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They are my mortgage banker, but they bought my mortgage from my broker.  Each appraiser is different.   :goodluck:

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This refinance is with Wells Fargo. Anyone else here deal with them during a refi?....

 

Working in mortgages for over 13 years - my experience with issues with appraisals.  There's a cost to cure, which is subtracted from the appraised value.  The borrower has to complete the repair(s), have in appraiser reinspect the repairs, then can get the full value.

 

Wells Fargo is one the better conventional lenders.  Reading your notes so far, I don't think you will have a problem.

 

My $00.02... ;-)

 

.

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More updates: Second appraiser arrived and checked house on a Thursday - by Tuesday I had the results. Appraised me higher and no issues at all. So far so good on that front.

 

Been keeping in touch with WF about 2x per week - what's annoying is when I ask how things are going, the loan officer replies back with needing a piece of paperwork faxed - can't they let me know first before I ask? One petty thing was about a residence I lived in 23 years ago!!! I was an apartment dweller back then, I have no idea why this would send up a flag to the underwriter. I'd like to think I'm one of the easier customers - same career, same residence, same job for the last 20 years. No bankruptcies, 740 credit score.

Guess I shouldn't complain, its been 5 weeks so far. I've read refinances range from 2 to 3 months.

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More updates: The insanity continues. Get this: I live in a townhouse. Get an email requesting documents that I've sent over repeatedly (bank statements, W2, pay stubs). I've told the loan officer I've sent these no less than 3 times. "Oh yeah, I have them, you're ok". Then get an email requesting a statement of HOA fees for my townhouse. Tell them there are no HOA fees.

 

"Ok,we will need a document proving you don't pay HOA fees" Document from who? The mortgage company? The township?

 

In my frustration, I ask the loan officer if she owns a Maserti. She says no. I say, "well, I need documentation proving you don't own one"

 

She got my point and hopefully everything will be complete by the end of the week.

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Update: Last straw. Was asked about a "US TREASURY" deposit on a bank statement. Replied back it was a tax refund. Said I needed to fax over paperwork proving it was a refund. I said that I had already sent my 2012 tax statement and they have my 4506T. Said they need something "signed and dated" by me. Unbelieveable.

 

Does anyone know any emails of Wells Fargo higher ups? I've never heard of anything like this.

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Yeah, they are making people jump through incredible hoops these day.  I'm not totally surprised.  

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Update a month later:

 

So after another month of back and forth emails and faxes, I'm all set and meet with the bank to finally close the loan. I was absolutely assured there will be no closing costs due at signing, the day before we met I spoke with my loan rep who said she had all the paperwork in front of her and it showed nothing due, and we will be signing the same thing.

 

Until it came time to sign and they said there was $500 due at closing. And if I didn't sign today, the low rate lock would expire. The $500 was apparently a glitch in the escrow account; recalculations done at the last minute showed it was short. The notary said she sees this a lot and people just pay the amount to get this over with.

 

That's when something clicked in us. She sees this a lot? I wound up calling the loan rep and loan agent who were dealing with my refi, who conveniently were not around. Livid, I called my the 800# for WF and explained my situation, gave them all the names and extensions of those involved and said I'm sitting here waiting for an answer and I need one NOW - not in 4 business days. While I'm waiting, my wife is calling some other WF people she found online and trying to get some resolution there.

 

Apparently my loan rep was in a meeting. She got pulled out to help us deal with this mess. As angry as I was, I could hear her quickly typing away looking up the files and finding the error and redid some of the necessary paperwork. Within a short span, it was sent back to us with no closing costs due, signed by the wife and I, and now we're sitting on 3 business days to make sure everything goes thru. I should receive my new mortgage packet sometime next week.

 

I'm still not convinced, though. My current mortgage is with Ocwen and they dragged their feet on sending me payoff information. From what I've read about them on this board, I'm sure something will be screwed up there.

 

On a side note, I was talking to one of my neighbors who refinanced with Citizens Bank last month and his paperwork is already done and completed. No issues with his appraisal - he was actually appraised 20k higher than I was, and my house is in better shape!!! How the heck he got his done in just over 30 days, and here I am at the 90 day mark and still dealing with all these headaches is beyond me.

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It's probably due to the amount - at a bank a consulted for, their underwriters were tagging out of pattern deposits of more than $500 to source the funds. They're paranoid about money laundering...

 

Update: Last straw. Was asked about a "US TREASURY" deposit on a bank statement. Replied back it was a tax refund. Said I needed to fax over paperwork proving it was a refund. I said that I had already sent my 2012 tax statement and they have my 4506T. Said they need something "signed and dated" by me. Unbelieveable.

 

Does anyone know any emails of Wells Fargo higher ups? I've never heard of anything like this.

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