Housing affordability is a significant issue in the San Juan Islands where our current median home price on all 4 main state ferry served islands exceeds $800,000. As of today, September 13th 2021 the median sold home price over the past 180 days for San Juan Island (Friday Harbor) was $817,000 (94 sales), for Orcas Island was $975,000 (51 sales), for Lopez Island was $1,101,000 (15 sales) and for Shaw (1 sale) $1,300,000.
According to a recent October 2017 HUD publication, nearly 60,000 single-family mortgages totaling over $13 billion dollars were FHA endorsed in Alaska, Idaho, Oregon and Washington over the past year; I have yet to find out the number of FHA mortgages for San Juan and Skagit counties. I do know it is an attractive program, with significant benefits, that offers less stringent criteria for down payments and credit scores that can be very attractive to first-time and many other homebuyers.
Current FHA requirements are not as stringent as they once were. Things like a lack of a crawlspace vapor barrier or specific stair rail measurements are no longer a standard requirement for repair. MPRs (Minimum Property Requirements) still exist and the three primary categories that an appraiser looks at are safety, soundness, and security. Safety items relate to the health, sanitary condition and habitability of the property. Common types of problems include malfunctioning electrical service or even missing or failing hand rails on stairs and decks. Chipping or peeling paint can also be a safety concern because it can be ingested and is poisonous. This is especially important because lead based paint was commonly used on homes built prior in 1978 and prior. If you are interested in the exact requirements you can log on to the official HUD website at https://www.hud.gov/program_offices/housing/sfh/handbook_4000-1
This short blog article is to provide some helpful tips to Realtors and sellers when their listings sell with this common form of financing. By making sure that the home is ready for the appraisal inspection, the entire loan process can run smoother and additional costly trips for repair inspections can be avoided if HUD requirements are met in advance.
- Electricity must be on for the appraiser to verify operation of the HVAC system, appliances, and the electrical system.
- Plumbing must be operational so the appraiser can look for leaks, flush toilets, and check water pressure. Make sure the water is ON before the appraiser inspects!
- Attic access (when present) must be readily accessible and provided to check for insulation, attic ventilation, and any damage.
- Crawlspace access (when applicable) must be provided; remember appraisers do not carry power tools and typically will not remove obstacles in the way of the access point. This is required to check for standing water, possible damage, and ventilation. Clear and open the access point in advance of the inspection.
- Windows must be able to be opened. This is important for safety reasons as access to the outside is necessary for egress safety. In addition, if security bars are present, which are very rare in San Juan and Skagit counties, they must have a quick release mechanism; if not present, they must be removed.
This is by no means a complete and comprehensive list but it includes items I have run into lately that have created delays in the closing process. If you have any questions regarding appraisal requirements for FHA financing, please do not hesitate to contact me at (360)317-5845 or firstname.lastname@example.org.
“In Federal fiscal year 2017 – October 1, 2016 through September 30, 2017 – the Federal Housing Administration endorsed 59,024 single-family mortgages in Alaska, Idaho, Oregon & Washington State – the seventh-highest total in the 80-plus year history of FHA – with a total dollar value of $13.1 billion. As of September 28th there were 299,916 active FHA-insured mortgages in those four states.” November 2017 NorthwestHUDLines epublications: https://www.hud.gov/states/shared/working/r10/newsletters/hudhighlights
My comment: This is a really great article written by a successful appraiser in Alabama. He discusses some very relevant information including tax assessments (which are set to come out very soon in San Juan and Skagit counties), Zillow, pre-listing appraisals, return on investment for home improvements, and using the cheapest appraiser available :/
November 2017: According to the San Juan County Assessor’s Office 2018 Notices of Value have been mailed out! If you live on Orcas, Lopez, Shaw, Friday Harbor or the outer islands please read my blog about appealing your property taxes. Feel free to contact me at (360)317-5845 or email@example.com. Continue reading
My comment: 2017 appraiser fees were studied nationwide – including rural Washington state which includes all of San Juan County; Friday Harbor, Orcas, Lopez, Shaw, and Guemes in Skagit County. 92+% of rural Washington appraisers are charging over $600 for a standard 1004 URAR (single family residential) lender report, with 55% in the $600-800 range. Keep in mind some lenders use an AMC (appraisal management company) instead of hiring the appraiser directly. Using an AMC adds to the cost of the appraisal and many of you know that your appraisal fee charged during financing is significantly more than what is indicated in this study.
Since its inception, Zillow’s home-value calculator, know as the “Zestimate” has been one of the most controversial features of the company’s real estate portal. Zillow co-founder Rich Barton openly admitted to GeekWire that the tool is “very provocative and personal and a little voyeuristic.” Continue reading
Home values continued their upward climb, however not quite as fast as homeowners estimated, according to Quicken Loans’ Home Price Perception Index.
On average, appraised home prices came in 1.77% lower than what homeowners expected, the fourth consecutive month the gap between the two opinions widened, according to the index.
Northwest Multiple Listing Service brokers saw an uptick in new listings during March as the housing market saw an increase of 50% from February in new listings.
The report, which covers 23 counties in and around Washington state, showed brokers added 10,321 new listings during March. Brokers also added an even greater number of pending sales, 10,447, leaving inventory near historic lows. Continue reading
In recent years, the National Association of REALTORS® has heard concerns regarding a perceived shortage in appraisers. NAR is also aware of reports of long turnaround times for appraisals, higher and/or rush fees in certain areas, and difficulty in bringing new appraisers into the profession. NAR seeks research to determine whether a shortage of appraisers exists and to what extent, as well as to further explore the other issues facing the appraisal profession. (read full article on nar.realtor.com)