Inspection vs Appraisal

[sdowens1026]

What is the name of your state? WA

We are in the process of closing on the sale of our home. The inspection has been completed to the buyer's satisfaction. The buyer informed us that the appraisal revealed severe internal structural damage to our furnace chimney and fireplace. We had no prior knowledge of these damages. The buyer stated that to close on time we would need to decrease the price of our home by $5000. She had already signed off on the inspection Can she do this? Can she back out of the deal now with a signed off inspection and an approved home loan?

[HomeGuru]

Originally Posted by sdowens1026

What is the name of your state? WA

We are in the process of closing on the sale of our home. The inspection has been completed to the buyer's satisfaction. The buyer informed us that the appraisal revealed severe internal structural damage to our furnace chimney and fireplace. We had no prior knowledge of these damages. The buyer stated that to close on time we would need to decrease the price of our home by $5000. She had already signed off on the inspection Can she do this? Can she back out of the deal now with a signed off inspection and an approved home loan?

**A: it depends upon the language in your contract. But suffice to say if the lender requires repair they will not make the loan. No loan, no closing.

[FloridaRob]

If an appraiser writes anything negative about the property on his report, the lender 95 times out of 100 will make someone repair the problem. "As is" is only good for financing if the appraiser doesn't point it out in the report.

Even with the appraiser allowing for the "cost to cure" a lender usually wants the problem resolved.

[Daniel M.]

Originally Posted by sdowens1026

What is the name of your state? WA

We are in the process of closing on the sale of our home. The inspection has been completed to the buyer's satisfaction. The buyer informed us that the appraisal revealed severe internal structural damage to our furnace chimney and fireplace. We had no prior knowledge of these damages. The buyer stated that to close on time we would need to decrease the price of our home by $5000. She had already signed off on the inspection Can she do this? Can she back out of the deal now with a signed off inspection and an approved home loan?

Is this an FHA/VA appraiser?
I've never seen an appraiser determine severe internal damage of anything! Did you receive a copy of this appraiser's work order/findings?

Ultimately the buyer can accept the house and the inspection however they choose but the bank does not have to. The approved loan is typically subject to an acceptable appraisal.

[sdowens1026]

I have a little more information now after a second conversation with my buyer. All of the above damages were on the inspection report that she signed off on stating that she accepted them. Now that the house is being appraised she is afraid the lender will generate work orders for the condition that she accepted in the inspection.

[Daniel M.]

Originally Posted by sdowens1026

I have a little more information now after a second conversation with my buyer. All of the above damages were on the inspection report that she signed off on stating that she accepted them. Now that the house is being appraised she is afraid the lender will generate work orders for the condition that she accepted in the inspection.

She should have made this demand during the pendency of the inspection contingency not afterwards.

It is HIGHLY unlikely the appraiser will make an issue of this "internal damage", much less so if the appraiser is not for an FHA/VA transaction, which you did not answer.

Tell her that you will wait for the appraisal to come back and see if there are any issues raised and cross the bridge at that time. Post back here when the appraisal comes in.

[sdowens1026]

The above loan in not a FHA/VA loan.

[HomeGuru]

Unless there is obvious substantial damage to the interior, the appraiser would not flag it.