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So an Appraiser Hits Your Dream Home with Repairs - Now What?

Person fixing a roof shingleHome appraisals can be one of those things home buyers get tripped up about during the buying process. In fact, we've talked about home appraisals and why they're needed before. The fact is, they're good for buyers, sellers and everyone involved. But they can also be frustrating when an appraisal comes back with required repairs.

When the appraisal comes back on the home you want to buy, and there are some repair items listed, what do you do? Don't worry; there are still plenty of options. It all depends on the type of loan, the seller, buyer qualifications, extent of repairs, etc.

Some of your options include repair escrow, seller repairs, FHA 203k or another loan option where you as the buyer can roll the cost of repairs into it.

This video with mortgage consultant Jeremy Drobeck will go over some of your options with AmeriFirst Home Mortgage.

See the embedded video here - Appraiser-Required Repairs when Buying a Home: Now What?

Find the documents mentioned in the video here:


Here's a little more information for you, too.


Conventional, FHA 203k, VA & Rural Development Repair Options:


1. Seller completes the repairs – this is the best option, typically costs little to no money, repairs are done prior to closing and the property is re-inspected prior to closing. Simply the best option. For bank owned homes (foreclosures) often the bank will not do any work to the property. It can’t hurt to ask and I would encourage that, however if the bank will not complete the repairs there are other options.


2. Repair Escrow – with this option repairs are done after closing. Here’s how it works:

  • Obtain a bid from a licensed and insured contractor for only the required repairs (2 bids required for FHA & VA). Buyers are not allowed to complete ANY repairs themselves.

3. Switch it to a Streamlined FHA 203k Renovation Loan

  • Typically the most costly option: Higher APR/Interest Rate & Higher Closing Costs
  • 3.5% down required
  • Obtain a bid from a licensed and insured contractor for the required repairs and any other repairs the buyer wishes to complete
  • AmeriFirst reviews bids & validates the contractors
  • Closing occurs and repairs are financed into the loan.
  • Contractor receives half the money upfront
  • Work completed and property is re-inspected
  • Check for remaining balance cut to the contractor

Learn more about the home buying process at the button below. We want to make sure you're ready for everything when it comes to the home buying process.


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*Jeremy's walk-through of this home is strictly for informational purposes. Jeremy is not a licensed appraiser, but he has several years of experience working with appraisers and he has seen many appraiser reports. His examples are meant to educate home buyers so you know your mortgage options.

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