Portland Area Real Estate Appraisal Discussion

Appraiser Certification of Repair Completion
December 4th, 2015 1:08 PM

Portland Appraiser Certification of Repair
Real estate appraisers who are following lender guidelines often make home appraisal reports “subject to” or “call out” repairs of certain issues.  I recently wrote about how there are often
gray areas when appraisers call out these repairs.  For this article, I will focus on what happens when an appraiser calls for the repair and later must sign off that it has been completed.

An appraisal that is made subject to inspection by another professional is different than calling for a repair.  After a subject to inspection, the appraiser is usually finished with the process.  An example is that the appraiser is unsure if the roof has sufficient life left and chooses to complete the appraisal subject to inspection, assuming that the roof is satisfactory.  The lender will then hire a roofer or the appropriate professional to provide an opinion on the roof’s adequacy before proceeding with the loan.

When an appraisal is made subject to repair, the appraiser will normally need to return and verify that the remedy has been completed before the bank will proceed with the loan.  In this case, and for most types of loans, the appraiser uses the Fannie Mae Form 1004D Certification of Completion.  With this form, an appraiser returns to the property and verifies that the conditions in the appraisal have been met.

Often, lender clients or real estate agents will call appraisers and ask, “Can I send you a picture of the repair and have you sign a 1004D that it has been completed?”  Lenders make this request to save time and money.  The problem is that when an appraiser signs the Form 1004D, they are signing that they “…performed a visual inspection of the subject property to determine if the conditions or requirements stated in the original appraisal have been satisfied.” 

In my opinion, this leaves us with bit of a professional conundrum.  Given that appraisers cannot edit preprinted forms, I believe that by signing the 1004D, an appraiser certifies that he or she has personally viewed the repair.  While it can be argued that seeing a photo or video could also be considered as “viewing,” I am not willing to risk my professional standing by being perceived as misleading (at best) or in violation of licensing requirements (at worst).  What do you think?  Does anyone know of a definitive ruling on this issue by Fannie Mae?  Please share your views in the comments below.

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Thanks for reading,

Gary F. Kristensen, SRA, IFA, AGA

My blog comments are now working. I'm sorry that they have not been working for a while.

Posted by Gary Kristensen on December 4th, 2015 1:09 PM
Gary, It always amazes me that the banks never seem to have an issue asking appraisers to comprise themselves and when things go bad, the appraiser is the first to be blamed. Good post and the SRA looks good behind your name.

Posted by Casey Lyon on December 4th, 2015 10:23 PM
Thank you Casey for your comment. I never want to jeopardize my license. The nice thing is that now when someone asks us to sign off on a repair using only a photo, we have a blog post that we can point them to.

Posted by Gary Kristensen on December 5th, 2015 12:25 AM
Interesting article, several months ago a similar topic came up with the introduction of google glasses. The idea was to hire someone to do the on-site portion of the appraisal with the google glasses and the appraiser could review the recorded footage. Although it is an interesting and certainly a progressive idea the outcome was it would not be an acceptable means of visual inspection, appraisers still must go to the property. I wish had the article to share.

Posted by John Tsiaousis on December 7th, 2015 10:55 AM
Thanks for bringing it up John, video inspection is something that needs more discussion.

Posted by Gary Kristensen on December 7th, 2015 7:32 PM
Great points Gary. I've been asked if I can view a picture and complete the 1004D as well but I feel like you do, that we should personally view it.

Posted by Tom Horn on December 26th, 2015 7:30 AM
Invaluable comments - Apropos , if your company requires a Freddie Mac 442 / Fannie Mae 1004D , my kids found a sample document here https://goo.gl/nmJpYU.

Posted by quincy watermark on November 21st, 2016 10:08 PM
Such a nice blog , Thanks for Sharing .

Posted by John Watts on July 28th, 2017 12:36 PM
Casey Lyon! Please forward the blog link you are referring to. I work at an AMC and have ran into this frequently recently. I would love to read that blog post. Thank you.

Posted by Nicholas on June 26th, 2018 4:58 PM


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