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Old 02-02-2006, 08:42 AM   #1
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House Appraiser, Same As Inspector?


hi folks!

im in the midst of purchasing a house, this is my first time buying a house, so all new to me. the LL im currently renting from is being very helpful, and seems to be an honest man with all the dealings ive had with him in the past. the realitor said the house needs to be appraised before the closing, to make sure it is worth at least the asking price or more, more beimg better for me, because it will establish some equity. my question is, what exactly does the apraiser look for while doing his apraisal? obviously the condition of the house, square footage, location, but how about electric, plumbing being up to code? is he also an inspector for that too? i know there are a few electrical violations, that even i noticed, like an outlet near a sink (about 2ft away) that is not a GFCI outlet, and its also a 3 prong outlet without any ground, and there are other 3 prong outlets that are not grounded, and not marked NEG either. any info would be greatly appreciated!

bob

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Old 02-02-2006, 11:17 AM   #2
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I've been through this several times. Most of an appraiser's work is done at a desk--meaning that the "comps" (prices of recent sales in the area) have more to do with your house value than anything else. Sure they want to come by and make sure that the floors are rotting through to the basement or that there's not a herd of cats urinizing everything, but they're not concerned about "minor" things like not having a GFCI outlet near a sink. Sometimes they'll even ask what value you're looking for and will try to get close to that if it can be justified.
Hope this helps.

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Old 02-02-2006, 11:56 AM   #3
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House Appraiser, Same As Inspector?


c&d,

the appraiser came by today!!! he measured the square footage of the house, came in and walked briefly through the house, and that was it! 20 minutes tops, and asked nothing! i asked more questions than he did! lol....bob
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Old 02-02-2006, 12:18 PM   #4
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He didn't even the mention the GFCI outlet??? :D Glad it went well for you.

I actually aspire to be an appraiser when I grow up. It looks like pretty easy money.
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Old 02-02-2006, 06:42 PM   #5
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House Appraiser, Same As Inspector?


An appriaser is a bean counter. All he does is measure and count what you have and put a value on it. It is not in his scope of work to point out violations and problems. Unless of course it is blatant and dangerous.

So the receptacle near the sink is not GFI? How old is the house?
If it was not code to have GFI's when the house was built then it is not code now. Since when are codes retroactive or grandfatherd in. If GFIs didn't even exist when the house was built then it would have been hard to install them.
Some banks will not give mortgages without certian criteria; yes, such as GFIs or maybe if the house has knob & tube wiring. But this is not a "code" issue, it is a bank issue.
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Old 02-02-2006, 08:50 PM   #6
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House Appraiser, Same As Inspector?


u aint kidd'n good money! $350 to read a tape, and do some math! and draw a floor plan of the house as he walked through it! i walked around the house without a tape, about a yr ago, and stepped it out, and i was only off by about 200 sq ft, from what he measured! i like his job!!! lol
i didnt think about GFCIs not being around when the house was made or maybe not required by code back then, but it will have one soon!

bob
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Old 02-03-2006, 06:08 PM   #7
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A appraiser is just that. He appraises the value of the house. He doesn't care what state it is in other than how that affects the value he putting on the property. He is there to make sure the bank can get its money back if you default on the mortgage.
If you want to know the condition of the house you need a home inspection.
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Old 02-03-2006, 10:01 PM   #8
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House Appraiser, Same As Inspector?


A home inspector goes over the house with a fine tooth comb and usually takes about 3 hrs. to finish. He then gives you a detailed report highlighting any serious problems. They charge around 350, same as your appraiser and in my opinion it's worth every cent. At least you have peace of mind that you're not falling into a money pit.
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Old 02-04-2006, 01:23 AM   #9
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House Appraiser, Same As Inspector?


APPRAISERS: A licensed appraiser establishes their opinon of the fair market value of a property based on size, age, construction, condition, amenities, etc., and most importantly, recent comparable sales of similar properties. A property being financed must be appraised, and appraise at or above the sale price for that particular loan application for the buyer to get the loan percentage of the sale price being applied for (i.e. 95%, for instance).
In all states now, a real estate appraiser must acquire a special license to appraise certain types of properties. They are not there to do an "inspection", but must report and take into account obvious defects (such as leaking plumbing, leaking roof, or other clearly visible defects or damages).
The theory is that 100 different appraisers could appraise the same property at the same time using the same data base (courthouse sales records, MLS, etc.), and they all should be within 5% of each other. As with all professions, the results vary with the competence and expertise of the appraiser.
INSPECTIONS: A buyer or anyone they choose (friend, relative, licensed professionals, etc.) may inspect the property at the option of the buyer between contract and closing. Although I represent the seller 99% of the time, I always highly recommend that every buyer get a minimum of two types of optional licensed inspections... a pest inspection (termites, powder post beetles, etc.) and a General Home Inspection.
A seller is not legally required to correct defects, but if there are "significant" defects (and there is no legal definition of that...it is determined by a judge on a case-by-case basis, if it comes to that), the buyer may (a) get their earnest money back and walk if the seller doesn't correct them, or (b) the buyer may renegotiate the sale price, or (c) the buyer may accept the property "as-is".
Usually, "buyers pay for inspections and sellers pay for corrections", as negotiated. if of any significance. As said previously, a property only has to meet the codes in place at the time of construction.
TITLE EXAM & TITLE INSURANCE: I also highly recommend a third buyer "inspection", if there is no lender financing (they usually only and always will require this one now)...a title exam and title insurance. It is a one-time premium that covers the title as long as the borrower owns the property or owes money on the loan, depending upon whether it covers the lender only or both.
The rule these days for sellers is "disclose, disclose, disclose" all things that affect the value of the property. All real estate agents must do the same. The rule for buyers is "inspect, inspect, inspect".
Don't sell or buy a law suit.
Believe me, there is a tremendous amount of liability involved in real estate now for sellers, agents, and appraisers. It isn't as easy as it looks, and they all put all of their money and their license on the line every time.
Mike
A Long-Time Real Estate Broker
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Old 02-04-2006, 07:58 AM   #10
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House Appraiser, Same As Inspector?


mike,

ty for the detailed info! i didnt know there was so much involved! i should say then, after reading your info, that the appraiser "made it look" easy! he did seem very knowedgeable, for instance, he knew how many sq ft in an acre off the top of his head and other calculations as well.the purchase of this house seems to be moving quite quickly. contract drawn up and signed, on 1/20/06, closing date set for 2/9/06. is that the norm? is this a good? i know ppl that purhased a house, and it took 2-3 months before the closing was final. im buying the house from my LL, who owns 20+ properties (houses) he rents, so it seems he has everybody needed to sell, or buy a property all in place.
the seller is also paying for the closing, is that normal procedure too? any hiddden cost i might not be aware of. i talked to the processor, i think thats what she called heself, and she said the only costs i might be required to pay during the closing is the house insurance, and she is going to get me an estimate from a insurance agent her firm uses...bob

bob

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Old 02-04-2006, 04:49 PM   #11
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Bob,
Yep, everyone in real estate should know that 43,560 sf/acre. LOL.
A 60-day loan processing window is the norm in a residential real estate contract, although it may take more or (usually) less time. A 17-day contract-to-closing is extremely fast for a conventional loan, but not for seller-financing or cash.
A fast closing is normally in everyones' interest, as long as you have plenty of time to INSPECT everything. Remember, everything is negotiable, even at the closing table.
Once you close, however, it's yours unless you have something in writing that survives the closing date (such as for repairs or replacement of something). Seller proceeds from the closing can and should be escrowed to cover pre-agreed-upon repairs or replacements that are going to be done after the closing.
The seller must be getting a good enough price that he is willing to pay all buyer closing costs except insurance. Normally the buyer would be paying for a lot of things. If all that you're paying at closing is for your first year insurance, that is great for you.
However, homeowners insurance is one place that you can save big by shopping around. I wouldn't necessarily agree to go with that one agent until you do, unless he has the lowest premium AFTER you check around. You can use the quote from him to shop around, because to get an apples-to-apples insurance comparison, you need to compare the same replacement cost figure and the same deductible.
For instance, if it costs $200,000 to build another home exactly like the one you're buying, and the deductible is $500 per loss, then all other quotes should be based on those same two figures.
Then just go with the lowest premium for the same coverage. (I've seen the same coverage with same deductible be almost twice as much from one insurance company to another.)
The best kind to get is called HO-3 Full Replacement.
HO-3 Full Replacement covers the cost of completely rebuilding a home just like it if it burns down or is otherwise destroyed. It also usually covers 70% of the replacement figure for your personal property (furniture, appliances, clothes, etc.), and also has liability for accidents, and also loss-of-use (6 months rent of another house while your's is being rebuilt new).
Get the agent to explain exactly what is covered and what isn't (usually guns, jewelry, etc.) except with a rider for them for an extra charge.
You can delay the closing if you need to.
Good luck!
Mike

Last edited by Mike Swearingen; 02-04-2006 at 04:57 PM.
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Old 02-06-2006, 02:27 PM   #12
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House Appraiser, Same As Inspector?


mike,

everything is being done, processed through his realitor, his lawyer, etc.... ive rented this house for about 2 yrs now, so i know what the house needs as far as any renovations i would like to do. its a clean well maintained brick ranch style house. he also agreed to replace a small metal shed that feel down last winter, its a 12'x12' utility/storage shed. he is going to have a carpenter build a wood 8'x10' shed on the exsisiting 12'x12' concrete slab, and he is going to have all the gutters replaced on the house also, cause a few are saging, and tearing away from the house. imho, he is being VERY fair, i can only hope there r no unexpected loop holes! also, since the closing is planned for this week, he said he would reinburse me for the unused rent after the closing, at the closing! he wants to sell 10 of his houses that he rents, and is offering his tenants first shot at buying the houses. witch is cool.

bob


Last edited by bobo; 02-06-2006 at 02:30 PM.
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