What You Should Expect on an Dallas FHA Renovation Appraisal
So you have found the house that you want to buy and the contract has been written for the asking price. How do you know that the house that you are going to buy is worth what the seller is asking? You are going to make a lot of repairs to the property once you purchase it, how do you know what the property will be worth once your repairs are complete?
The property must be appraised by use of Dallas FHA Renovation Inspection to find the future value. When you purchase a home using the FHA Renovation Loan Program, the appraiser must have a copy of the work write-up that has been prepared by the General Contractor and a copy of the Inspection Report that has been prepared by either the Dallas House Inspector or the Consultant.
It is also important that you write-up a narrative for the appraiser, stating what you intend to repair in the property. Are you going to add rooms, are you going to move walls, are you installing a new kitchen or bath? Give the appraiser some details about your project. If you are moving walls or making room additions, the underwriter may need drawings. Major renovations such as walls being moved or rooms added to the property may need an architectural exhibit and not drawings. The work write-up that the appraiser will get from the will only have raw numbers.
Once the Appraiser has reviewed the information he/she will go to the property to make the inspection. The appraiser will take into consideration the work that will be done to the property once the loan closes. He/She will then assess a future value to the property based on the repairs that will be completed. The value must be equal to or greater than the combined sales price, renovation costs and soft costs.
The appraiser does not list the repairs on the appraisal form but will attach a copy of the Contractor’s work write up and the Inspection Report to his report. The underwriter will review the appraisal report and the other reports attached.
The value of the neighborhood is very important to the future value of the property. The appraiser will compare the subject property to the closed sales in the neighborhood. The sales must be within previous six months. If the appraised value is lower than the sales price, renovation costs and the soft cost, the loan will not be approved.
The FHA Renovation Loan program is awesome and I consider it to be the best mortgage loan program available. It is a complex loan and it is important that everyone involved in the process be knowledgeable.
If you’re looking for a Dallas Home Inspection Service, then give us a call today at 214.734.2632 or complete this contact request form.
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