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Buying and Selling Homes

FHA Home Inspections

9 years ago

Today we accepted a favorable offer for our rental house. It was our asking price which I never expected to get and they didn't ask for closing costs which surprised me as well. The only kicker is that it's a FHA loan and I've heard that their inspections are much stricter. Would anyone be able to give me any details regarding the differences between FHA and regular inspections?

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Comments (6)

rrah
9 years ago
FHA does not do home inspections. This is a common misunderstanding. An FHA appraisal tends to be more like a home inspection. The appraiser has a checklist that is used and the home must meet minimum standards in several categories. For example, the roof must have at least 5 years of life left, (or something like that). The home must also be inspected for wood destroying insects by an approved bug inspector. The difference is that the appraiser will often mention relatively minor items that need to be fixed, but contribute to the longevity of the house. Personally I think the reason so many see the FHA appraisal as nitpicking is because one has already had an actual inspector out. Sellers "thought" they were done with that.

The FHA appraiser does not mention anything a good home inspector would not find. The difference is that some repairs--e.g. no handrails on stairs--must be completed for the loan to fund. http://www.fhahandbook.com/appraisal-guidelines.php
tcufrog
Original Author
9 years ago
This is a serious problem then. I can not afford to spend a ton of money on repairs. We had other buyers interested in presenting offers but their potential offers weren't as strong.
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C9pilot"You don’t. The buyers are just trying to get concessions from you because it doesn’t hurt to ask. I’ve seen this when there are multiple offers (not that this is necessarily the case) that the buyers will make a higher offer to “win” the contract and then start whittling it down using the home inspection as a weapon." I despise this Buyer/bad agent tactic and won't play games. If the condition was observable prior to making the offer, it's off the table anyway. The Inspection exists only for the Buyer to know the current condition of the house he has chosen to buy; that's it. It is not a secondary negotiating round and I won't treat it as such, Buyer or Seller. It is fair game to ask for a SAFETY repair after Inspection that was clearly unidentifiable prior to Inspection. I will have electrical or plumbing items that are health and safety risks repaired, but that generally doesn't happen anyway, as I repair all this prior to move-in and maintain it. Get out of here with your upgrades and improvements, or your "the furnace might only last a few more years" nonsense though. The house has already been priced for those; and either buy it or don't. I don't play that game as the Buyer or as the Seller. My offers as a Buyer are reasonable and fast, and I know there will be work. Lots of Inspectors are not very good and they miss a lot and make up other stuff. Some are great. Find the good ones.
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It was probably a good idea to walk. As a first time buyer, you don't want to be saddled with repairs that are beyond your ability. Let's talk about what you have learned and what you might have done. Norm Abram from This Old House advised us to think of a house as an old man in winter. Does he have on boots, coat and hat. Or, is the foundation, exterior and roof okay? If yes, proceed. If no, it's going to cost a lot to get the house properly dressed. Those are the areas where you must spend a lot of money to keep the structure from falling down. In the case of the house you were considering, the next step would have been for your realtor to get an inspection extension in order to find a structural engineer to conduct and report on the status of the foundation, the water intrusion and cracks in the walls. Many people think that a home inspection is the only inspection that is needed. To stop with a general home inspection is to buy something without a full understanding of the features and potential costs. To fully understand and be able to quantify your purchase, you may need to employ additional specialists to inspect the structure, the HVAC plant, the roof, the plumbing and the electrical. While it makes sense to do this with older homes, newer homes have just as many problems. A skeptical eye should be used on any property that you will be paying good money to acquire. The general home inspection is just the start of the process, not the end. Often 10 days isn't enough. This is where your realtor can help by arranging for inspection contingency extensions. If a seller won't grant an extension for an additional inspection, my answer would be to walk away. I want to know what I am buying. I'm never embarrassed to inconvenience someone in order to get my questions answered. You did the right thing. Hopefully, the next home you place a contract on will be in better condition with fewer issues.
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User
9 years ago
I sold my first house FHA. I did have to do stuff like handrails on the front steps, new basement steps (nothing fancy), and repair some gutters etc. It wasn't tons of money but it did add up to maybe 2% or so of the sales price. Plus it had to be done in 30 days. It was stressful but we got it done.
Kris_MA
9 years ago
last modified: 9 years ago
We sold a year ago, and our buyers had an FHA loan -- they didn’t when they bid but had some issues and switched to FHA at some point during the process. We didn’t even know they had gone that route until closing, which was pretty quick at 1 1/2 months from point that we accepted offer. Buyers waived the inspection, and no issues were brought up by the FHA appraisal. I’d have been really nervous about it, had I known, but since I didn’t it wasn’t a problem at all. Guess this is to say that sometimes it goes without a hitch. Hope this is the case for you, too.
pamghatten
9 years ago
FHA Appraisers are only supposed to comment on "Health & Safety" issues. Times have changed, and the FHA requirements aren't nearly as onerous as they used to be.
tcufrog
Original Author
9 years ago
pamghatten...

I hope you're right. Money is really tight right now and our main house is on the market too.

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