What to Tell Borrowers in an Inspection
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It can be hard to know exactly what to tell a borrower sometimes in an inspection when it comes to repairs. For example, if you see chipping and peeling paint in an older home, and it is an FHA inspection, do you let the homeowner know that there is a good chance that their lender will ask them to repair it? While it is probably not a big deal either way, I see both pros and cons to both sides of this issue.
If the borrowers seem kind and agreeable, I typically will tell them about the repairs. It gives me an opportunity to explain exactly what needs done so I do not end up coming out a third or fourth time. Additionally, it gives the owners a heads up so they are not surprised when the request comes back from their lender.
As I am walking through the home, if the borrowers seem hostile or defensive (it happens), I usually do not tell them about the repairs. My reasoning for this is thatI have encountered owners who have gotten angry when I mention that they may need repairs. They get upset because they think I am being difficult by pointing out a problem with their home. As you know, we as appraisers are really just the messengers when it comes to these types of repairs, so this is not a situation that I want to find myself in. It is sometimes better coming from the lender.
Ultimately, it probably does not really matter whether you tell a homeowner about possible repairs that may be required. I typically try to read the borrowers and go with the option that I think will produce the best reaction.
For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: 126 Telling Borrowers About Repairs