Property Valuation
A Minnesota appraiser completing an FHA appraisal discovers health and safety deficiencies. What is the appraiser's obligation?
AReport the value as-is and let the parties handle the deficiencies
BNote the deficiencies and require them to be corrected for FHA loan approval✓ Correct
CComplete the appraisal without commenting on health and safety
DRecommend the buyer not proceed with the purchase
Explanation
FHA appraisers in Minnesota must note health and safety deficiencies observed during the appraisal inspection. FHA requires that the property meet minimum property standards, and deficiencies noted by the appraiser must generally be corrected before the loan can close.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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