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Home appraisal safety issues not fixed

Safety issues not fixed

Q: " I recently completed a purchase appraisal and the report was subject to repairs, which included material safety issues. I was then called and asked to go back out to the property to confirm all the called for repairs had been completed. When I called to schedule the inspection, I discovered that the loan had already closed and the buyer had taken possession with still unresolved safety issues. The buyer told me that the seller had promised that the repairs would be completed, but now the seller is not returning phone calls. The buyer asked me what he should do. I told him that I was not in any position to give him advice, but that the repairs needed to be made. I explained that some of the issues were potentially serious...like the problem with the exposed electrical wiring.

The AMC and the lender say this is now a “matter between the buyer and the seller”. They say both of the parties were in a rush to close and they both knew the required repairs had not been done. As far as they know, the seller did not sign anything agreeing to complete the repairs.

It has been weeks since the sale closed. Some of the repairs that I called for were to correct potentially serious problems. They want me to call the buyer every week or so to ask if the repairs have been made. Once I am told they are complete then I should go and do my inspection. This does not sound right to me. What happens if someone gets hurt, or if the house burns down...do I have exposure here? I feel like I owe it to the buyer to tell them the problems are potentially serious and they need to be fixed.

A: I appreciate your concerns about the buyer, but I am also a little worried that you are warning them about potentially dangerous conditions. I think the bank should be monitoring the status here, not you. The buyer was not your client and it is hard to imagine how the lender can just wash their hands of this.

I think you need to confirm this situation with the lender, in writing, with language such as..."...my appraisal was done "subject to" the repairs. When I was called to go back and certify completion I was told that the loan had already closed without the required repairs being made. I have contacted the buyer on (fill in the details about dates you called) and have been told that none of the repairs have been done and no time for work to be done has been scheduled.

I would be happy to go back to the property for an inspection when work has been completed. It is not my obligation to call the buyer to inquire about the status of the suggested repairs; nor will I be doing so. When you are notified that work has been completed, please let me know and I will call the owner to schedule a time for my inspection.

I also need to stress to you that some of the repairs I noted in the original appraisal fall under the category of health and safety issues. In my professional opinion, those repairs need to be addressed and I accept no responsibility for any consequences that might arise if those conditions are not remedied."

The lender cannot just make this your responsibility now. Let them follow up with their client, the property owner. I suspect the lender will soon realize this is a problem they will have to resolve because no investor will buy the loan at this point.

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