Tuesday, October 22, 2019 / by Heather Schelling
Answers to these questions depend upon the type of buyer you're wanting to attract. If you're looking for maximum exposure and top dollar, you'll definitely want to make repairs that if left undone, will likely be an appraisal issue or worse yet, deter the majority of buyers from looking at your home.
With an FHA, VA or USDA loan, the appraiser will be looking for anything that could be a potential health and/or safety issue. For example, if you have a VA buyer and the stairwell is missing a handrail, the appraiser will probably say that as long as a handrail is installed, they will give the appropriate value to the property. With a conventional loan, the appraisers have a much less rigorous checklist. (The handrail shouldn’t be an issue.) In either case, if the buyer is getting a loan to pay for your home, there will likely be some repairs/updates you will need to make in order to sail past the appraisal.
In Washington state, all loan types will require the correct number and placement of both smoke detectors and carbon monoxide sensors. For most loan types, the appraiser will also be looking for seismic/earthquake straps on the hot water heater regardless of when it was installed.
Since the buyer pays for the appraisal to protect their and the lender's interest in the property, it’s best to stay in front of any potential issues. If the appraiser asks for repairs to be made before the value is given, the buyer will probably have to pay for a re-appraisal unless special language is drafted into the purchase and sale agreement.
It's imperative that any known issues be addressed prior to the appraisal; otherwise, the buyer or seller will be paying for the re-appraisal fee and potentially delaying the closing.
If you can’t or won’t make any repairs, then know that you’ll only be able to accept cash or a non-conforming loan offer. That pool of buyers is very small and your home could take much longer to sell.
Either way, it’s up to you…just know that as-is isn’t always as-is.
Until next time!
Heather Schelling, Realtor®