Appraisal-required repairs can sound a little intimidating for both buyers and sellers. But once you know what appraisal-required repairs are and why they exist, you’ll feel prepared for any appraisal!
First, let’s go over some definitions. During the closing process, lenders will require an appraisal before they process the buyer’s mortgage. This is required by the lender to ensure that they make a sound investment since they’re putting up the funds for the mortgage.
However, sometimes problems are found during the appraisal. If this happens, the lender will require that repairs are done before they give the green light on the mortgage. Appraisal-required repairs usually deal with the livability of a house and include the following repairs:
-Replacing lead-based paint and/or asbestos
-Repairing stairs in poor condition
-Repairing an old or damaged roof
-Replacing or repairing a damaged foundation
-Repairing mechanical systems
-Updating or repairing electrical, exposed wiring, and fuse boxes
Whether you’re the buyer or the seller, you want to avoid finding an appraisal-required repair. As a seller, you can get an inspection done before listing and make any updates to ensure the house goes through the appraisal process smoothly. Buyers can ensure that they include an appraisal contingency in the purchase agreement.
If appraisal-required repairs are found, the buyer and the seller will come to an agreement concerning the repairs so that the buyer can obtain the mortgage to buy the home. If the parties can’t agree on the repairs, the lender won’t fund the mortgage, and the contract will fall through.
Have any other questions about the closing process and things to watch out for? Feel free to contact me.
RE/MAX of Lloydminster