Sandy McAlpine - Lake Norman Blog: February 2012

FHA guidelines state that a house has to meet MPR (minimum property standards) for existing houses, and MPS (minimum property requirements) for new construction. FHA is very concerned with the three S’s: Safety, Security, and Soundness.

When a Realtor was asked what the three FHA S's were, he replied, "Stupid, more stupid, and seriously stupid FHA appraisers," which I thought was pretty funny, however, a little off the mark. The three FHA S's have to do with the following:

Safety:

Per FHA, "Safety refers to the health, habitability and sanitary condition of the property." When determining what is safe and what is not, does involve some subjectivity on the appraiser's part, while other issues are pretty straight forward. Here is a list of the some of the most common safety issues that require correcting:

• Any peeling or chipped paint on homes built prior to 1978
• Holes in the fire door between the house and garage (doggy doors, missing dead bolts, etc.)
• Missing or damaged handrails for full set of stairs.
• Improper spacing of balusters for decks and balconies (would allow a child to climb in between the balusters).
• 2nd level sliding door not secured when there is no deck.
• Exposed wiring and/or missing outlet covers.
• Missing fire and carbon monoxide detectors.
• Missing carpet over a wood sub floor (If carpet is missing over a concrete floor not an issue-FHA considers concrete to be a permanent floor; however, most lenders may want this addressed).
• Broken or missing windows.

Some of the more challenging issues is what is considered to be minor deferred maintenance, that which doesn't need to be corrected. The appraiser is still required to note within the appraisal all the deficiencies with the property, thus giving the underwriter the final say. Here are some of the most common deferred maintenance issues that don't require an automatic repair:

• Worn, dated, or sagging carpet.
• Cracked windows (see detailed explanation).
• Minor damaged interior walls or doors.
• Minor plumbing leaks.
• Shoddy workmanship.

Soundness:

This relates to the structure and structural components of the dwelling. These types of issues will have to be addressed, which they will either have to be repaired or certified by a professional that they're not a problem. Some of the most common structural issues that I've run across are the following:

• Foundation problems (shifted and bowed walls, large cracks from settling).
• Water damage to walls.
• Roof beyond expected life of two years; more than 3 layers of roofing.
• Decks not properly built to code.
• Additions or basement finishing that wasn't properly built.

Security:

This is the most misunderstood of the three S's. Most assume that if refers to securing the property from the weather, and/or intruders. However, it actually refers to the properties ability to serve as collateral for the FHA insurance fund. The main point here is the marketability of the property to serve as collateral. Here's a list of some of the most common things that I've run into that can affect the marketability of a property is when it's:

• Located near HV (high voltage) power lines (see detailed explanation).
• Located near a municple sewage treatment plant.
• Located near a major freeway or county road.
• Located near a hazardous site or landfill.
• Located near railroad tracks.

Just because the property is located near any of the above, doesn't automatically make it ineligible for FHA financing; however, the appraiser is going to have to be able to address the marketability of the property. The best way to do this is to find similar sales that were subject to the same type of issue(s). The appraiser would then have to be able to use those comparable sales within the appraisal report to help bracket the property, and at the same time meeting all of the lender's other guidelines and/or overlays.

 

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Where oh where could the dryer vent be?

Sometimes you know a change has been made, but you don't know where.

This dryer vent has blown directly onto the AC compressor since the house was built.  That would be 1979.

A dryer vent should not be within 12' or so of a compressor.  Too close, as in this case here, and the compressor will draw in air while the dryer is venting its lint-laden exhaust.  That can load up the fins with lint, clogging them, and robbing the compressor and AC system of efficiency.  I have seen compressors look like they had grown a gray beard!

Over time, enough clogging can kill the compressor.

This compressor is less than two years old.

I have to wonder how many compressors have had to be installed over the years as this dryer vented right onto them!

But wait!  This dryer vent is intentionally plugged with a K-Mart bag!

The dryer no longer vents here.

Not seeing another vent anywhere on the outside of the house, or the roof, I was interested in where it was venting!

When these things happen, they become fun detective scenes.

I like to sing the title of this post to myself!

Sooner or later the vent will show up.

Usually the evidence is, um, visible!

Pulling down the folding ladder to the space over the garage, and looking over, I found it!

Wonderful!

Going further, and I had not been upstairs yet, that white vent cover could be completely removed from the wall there. 

Looking into the hole, I could see what looked like the back side of a dryer!

Mentioning that to my clients, they said, "Oh, yeah, the sellers made a laundry room upstairs."

Hmmm.  This should be interesting.

And it was!  The linen closet had been turned into a "laundry room."  A wall had been knocked out and the "laundry room" was a part of the master bathroom!  And it was cute!

Oh, there was lint everywhere.  And County permits were nailed all over the wall!

I may be exaggerating a bit on the County permits.  There was nothing smart or safe about this installation.  Or the kitchen remodeling.  Or the newly finished basement.  Or the new window in the dining room.  Or the front stoop.

My recommendation:  when you see one wrong thing, it usually leads to another, sometimes connected to the first!  Even if the dryer vent had not been plugged, it still would have been a problem.  And the "fix" for it was no fix at all!  And don't forget to be a preposition!

 

 

 

Jay Markanich Real Estate Inspections, LLC

Based in Bristow, serving all of Northern Virginia

www.jaymarinspect.com

 

 

I feel like so much of my time these days is giving bad news to good people! It's tough! Buyers and sellers are getting bad news from me. But honest news.

Short Sale Sellers are hearing:

• The home value is so low that they have to do a short sale
• The Short Sale "might" result in an income tax bill
• There is a sale date scheduled
• The buyer walked

Equity Sellers are hearing:

• The real value of their home, not what they wish it were
• The home down the street is listed 30% less because it is a short sale
• We have an offer, a lowball offer

Short Sale Buyers are hearing:

• It's going to take a few MONTHS to hear back from the bank
• The listing agent just got a higher offer and has sent that ALSO to the bank
• The short sale approval doesn't include temite, or past HOA dues, or Hazard Reports, or title fee, or escrow costs, or, or, or
• The approval is 20% higher than our offer
• The approval is for 15 days and if we don't close there is a per diem charge

Buyers of standard sale properties are hearing:

• Just because the home down the street is listed 30% lower than this one, it's most likely not going to sell for that price....it's a short sale/bank owned.
• The sellers chose not to counter your offer because it was too low
• The sellers countered your offer to include "as-is" language
• The sellers will not pay for termite work

Just some of the many bits of bad news I have to discuss every day. It's not fun....for any of us. And each time I have to deliver this type of information, I worry. People don't like to spend time with "downers" and I feel like one.

But it's the truth....the unvarnished truth.

The current real estate market is complicated. I requires care and attention to navigate the various aspect of writing offers and getting them accepted...and of course closed. My clients are responsible adults who do not need to be babied, certainly cared for, but not lied to. We need to deal with reality as it is.....lies, distortions and omissions do not help anyone. On my part they violate the fiduciary duty I have for my clients. My job is to give the facts to the best of my knowledge and then allow my clients to make decisions......even if that means they want to work with someone who tells them what they want to hear.

I'm never going to tell a buyer or seller what they want to hear.....I'm going to tell them the truth.

 

 

 Karen Fiddler
Broker/Associate
The Fiddler Realty Team/eVantage Real Estate
Lic # 01494165

www.SearchForOrangeCountyHomes.com

Serving all of Orange County, California Real Estate!
Buyer's Agents, Listing Agents, Short Sales, REOs, Equity Sales, Investors

SEARCH THE MLS HERE

Orange County Home Search 
Orange County Foreclosures
Orange County Short Sales
Buyer Information
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Contact Us With Your Questions

 

Bottom Line ~ Price It Right And It Will Sell!

It's so easy really...Price It Right And It Will Sell. Seven little words, but many homeowners here on The North Shore Of Long Island can't or don't want to listen.

Case in point, let's talk about homeowner Joe. Joe is a young professional who purchased his home at the top of the market. Unfortunate as that is, no one had a crystal ball, his house is worth less than when he purchased it.

Joe has a good job, he's single, he doesn't "have to sell", but nevertheless, he would like to move to a different area. We know what he spent for the house, we sold it to him, and we know what it's worth in today's market. Joe considered all our advice, but wanted to list his house slightly higher than what he paid for it. We told him it would be a waste of time, and although he trusts our judgement, knowledge and experience, he insisted on his listing price.

Although we do not like to take an over-priced listing, and have actually walked away from them, we felt that Joe was a previous loyal client and decided to take his listing, with the understanding that he will keep it at this price only for a short while, and then we'll talk again.

Many homeowners on the North Shore of Long Island are still a little slow to accept the concept that pricing is key to getting a house sold.  We would go as far as to say that if you don’t price it well to begin with, it is most likely that it will eventually sell at a lower price, and the time on the market will be noticeably longer.  If a house does not sell quickly, it will probably have multiple price reductions before it does sell.  

Bottom Line Is...Price It Right And It Will Sell!

 

 

 

 

 

 

 

 

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