February 21, 2017
A reader asks us a question about FHA appraisal rules this week in our comments section. “Buyers want my house but dont want to process the sale until the end of April. It is now Feb. 19th 2017. I dont have a problem with that but do want some kind of guarantee that they are going to buy it.”
“They are going FHA. Should I ask them to have and pay for an appraisal & inspection now as a good faith issue? If I do hold the house for 2 months I am the only one to suffer if they dont buy. Also who does the appraisal and inspection if the loan is FHA?”
As for the timing of the appraisal and home inspection, that would be up to the lender and the borrower respectively. Factors that influence the timing of these procedures include whether or not the loan has been approved, lender requirements, legal issues, and other factors.
The appraisal is a process to help the lender assign the fair market value of the property and determine that it meets minimum FHA loan standards. FHA appraisals should never to be taken as a type of home inspection, and the results of the appraisal should never be interpreted as a stamp of approval from the FHA that a home is problem-free.
The timing of the appraisal may be affected by state law and/or lender standards, but in general the seller should not expect to have a say in the timing of that appraisal within the overall home loan application process.
The home inspection is a choice the borrower makes, and while it is a voluntary part of buying a home, no buyer should purchase without a home inspection. Without a home inspection, relying on the appraisal only, the borrower can’t make a truly informed decision about purchasing the home.
The “guarantee” portion of the reader’s question is more or less outside the scope of this blog as we deal with issues directly associated with FHA loan processes. The buyer and seller are responsible for negotiating the sale/purchase of the home which can include an earnest money arrangement, seller contributions, etc.
The last part of the reader question involved who carries out appraisals and inspections. The appraisal process for FHA loans is handled by an FHA appraiser who is listed on the FHA appraiser roster. Home inspections are arranged by the borrower and are usually carried out by a licensed professional who meets state certification standards or other qualifications depending on the laws of the state the inspector works in.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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