FHA Appraisal Advice

I've been working on a SS with Wells Fargo ( FHA) for a few weeks. No double closing - I am planing to buy the property, hold it, clean it up maybe do some minor work and unload it after their 30 days. The appraiser just called me and I will meet him there next Tuesday or 3 days from today. House is located in a very nice area but is the least attractive in its current condition. Several necessary repairs including roof, lots of updating (about $40K to $50K) and the grass was up to my knees when I was there a few days ago. Any advice on how to handle this appraiser (other than the typical influence) so I can get a good number in my favor? Is FHA still going 82% of the appraised value or has that changed?
Thank you.

Bill Gulley

Real Estate Investor · Springfield, Missouri

5,642 posts
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Aug 14 '10, 01:10 AM

Hi, if you can get into the property and get some solid estimates on the repairs needed, from contractors as necessary, that information will be a big help to any appraiser. In the narrative of the appraisal it can be mentioned that bids support the repair estimates. Be as detailed as possible about materials. ie. a 15 year composite roof shingle vs. 25 year decorator.sculptured shingle. This will give an idea as to the quality of materials to be used. Get bids for the work you intend to do as well. Work done by a homeowner is usually highly discounted, for a higher appraisal, consider the work is to be done professionally.

As you mentioned be careful approaching the appriaser with comps, some frown on it as an attempt to influence them and some welcome all the information they can get. Make sure they are acceptable, within one mile to three miles, don't forget style of the home in addition to sq. ft and the usuall bed/bath count. Good luck, Bill

Steve L.

SFR Investor · Rancho Cucamonga, California

890 posts
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Aug 14 '10, 05:00 AM

Are you using a 203k loan? Otherwise, the appraiser may say the property doesn't meet FHA standards.

Larry Moore

Real Estate Investor · Belvidere, Illinois

171 posts
2 awards
50 influence

Aug 17 '10, 07:36 AM

As far as what FHA can accept, the guidelines changed to 88% for the first 30 days listed, 86% for the next 30 days, and then 84% for the final 30 days. Often, the lender wants the house listed for full appraisal and won't accept less right out of the gate. As far as influencing the FHA appraiser, good luck with that.

Luiz Souza

Wholesaler · Gainesville, GA

105 posts
3 awards
50 influence

Aug 17 '10, 09:24 AM

Hi Bill,

The appraisal was done today. The appraiser was very open to all I pointed out. I was very cautious however, when I pulled out the repair estimate of $94K. He was much appreciative and thanked me by saying that it would help him a lot. Of course in the folder with the repair list included information about other properties sold in the area.

Larry,
I have a feeling favor is on my side but if not I can always try again : )
Thank you all.

L.Souza-GA

J Scott

Real Estate Investor · Atlanta, Georgia

Donor Pro

6,628 posts
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Aug 17 '10, 11:25 AM

Originally posted by Luiz Souza

The appraiser was very open to all I pointed out. I was very cautious however, when I pulled out the repair estimate of $94K. He was much appreciative and thanked me by saying that it would help him a lot.

Luiz -

I know we've talked about this a lot in the past, and as I've always told you, if you treat the appraiser with respect, he'll be thrilled to let you help him do his job...

Plus, appraisers *LOVE* information...the more you can provide (like repair lists, invoices, pictures, etc), the happier they will be.

Congrats!

J Scott, Lish Properties, LLC
Telephone: 770-906-6358
Website: http://www.123flip.com
http://www.123flip.com

Larry Moore

Real Estate Investor · Belvidere, Illinois

171 posts
2 awards
50 influence

Aug 17 '10, 11:02 PM

I'll keep my fingers crossed for you, Luiz.