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HOMEBUYERS BENEFIT FROM NEW FHA REQUIREMENTS New Federal Housing Administration (FHA) requirements will help protect homebuyers from being stuck with a lemon. Effective August 1999, all buyers purchasing a home through FHA must sign an FHA Home Inspection Notice Form before they make a purchase offer. This will help them make a more informed decision by explaining the difference between a home inspection and an appraisal and that an appraisal is not a substitution for a private home inspection. FHA also allows buyers to include the cost of an inspection (up to $200) in their mortgage loan. In addition, the Department of Housing and Urban Development (HUD) and FHA will soon require appraisers to expand their reports to include more details about repairs needed in the home. Homebuyers, in general, have depended too much on appraisals to determine the condition of their pending purchases. Appraisals, even with the new requirements, only provide general statements about some needed repairs. "These new requirements will clearly differentiate between the role of an appraisal and that of a home inspection," said Mike Goewey, President, Michigan Chapter of the National Association of Home Inspectors. "We expect the number of home inspections to increase significantly as a result because consumers are better informed." Appraisers and realtors are both applauding the new requirements. "I've always recommended private home inspections for my customers," said Sandi McKolay, a real estate agent with Coldwell Banker Preferred in Plymouth, MI. "I think the new FHA form will prompt customers to request one during negotiations with the seller." "Based on the new appraisal requirements, I feel that all appraisals will finally be on an equally level playing field," said Daryl Bauer, President of New Horizon Appraisal Services in Livonia, MI. "This should make the appraisal consistently more accurate." "Personally, I am happy with the change", said Greg Getchen, a mortgage consultant with Metro Mortgage Corp in Northville, MI. "It educates the consumer in understanding the importance of a inspection at the proper time of the home buying process." Top problems that home inspectors uncover:
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