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REA - HUD and FHA Guidelines for Valuation Analysis for Single Family and One to Four Unit Dwellings - 03 PROPERTY ANALYSIS - Part 11 - Real Estate Appraisal From A to Z
13. Mechanical Systems
These are the requirements for mechanical systems:
- Must be safe to operate
- Must be protected from destructive elements
- Must have reasonable future utility, durability and economy
- Must have adequate capacity and quality
The appraiser must observe the systems in VC-10 and determine if any of the conditions do not meet the above stated criteria.
- If the systems require repair, mark "YES in VC-10, condition the appraisal on the repair or further inspection and prepare the appraisal "as-repaired" subject to the satisfaction of the condition.
- If systems could not be operated due to weather conditions, explain that in VC-10 condition the appraisal on assumed functionality, and make a note of this condition on the Homebuyer Summary - Part 3 of the Comprehensive Valuation Package.
14. Heating
Heating must be adequate for healthful and comfortable living conditions:
- Dwellings that use wood-burning stoves or solar systems as a primary heat source must have permanently installed conventional heating systems that can maintain a temperature of at least 50 degrees F. in areas containing plumbing systems. These systems must be installed in accordance with the manufacturer's recommendations.
- Properties with electric heating sources must have an acceptable electric service that meets the general requirements of the local municipal standards.
- All water heaters must have a non-adjustable temperature and pressure-relief valve. If the water heater is in the garage, it must comply with local building codes.
- All non-conventional heating systems - space heaters and others - must comply with local jurisdictional guidelines.
Solar energy systems are discussed in Appendix B.
15. Electricity
Electricity must be available for lighting and for equipment used in the living unit. Refer to the specific instructions in the protocol (Appendix D) for determining adequate electricity.
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1995 - I had 28 forms in my last refinance and 13 of them were what I call "I told you so," forms. These forms serve no other purpose than for the settlement/escrow service provider to be able to say, "I told you that you have the right to hire your own attorney to represent you in this transaction and here's the form you signed acknowledging that it says you agree that I gave you notice to hire your own attorney if you wanted to." Or something like that. Is all this paperwork really necessary? Unfortunately, it is. I talked it over with the attorney conducting my latest settlement and it all came down to this – people aren't honest these days. If they were, a handshake would seal the deal. So when you look at that mound of paper on the settlement or escrow table, here's some insight as to what it is you're about to dive into. Settlement Statement Notice: The first notice I had to sign was that the settlement company had actually given me the HUD-1 Settlement Statement. The HUD-1 is a document published by the U.S. Department of Housing and Urban Development. It tabulates the funds flowing through the transaction, whether it's the sale of house or a refinance. (By the way, more than 21 percent of my $6,295.60 of closing costs were taxes. Read this Nemmar Real Estate Training article at
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16. Other Health And Safety Deficiencies
The appraiser must note and make a repair requirement for any health or safety deficiencies as they relate to the subject property, including:
- Broken windows, doors or steps
- Inadequate or blocked doors
- Steps without a handrail
- Others
The appraiser must operate a representative number of windows, interior doors and all exterior and garage doors, as well as verify that the electric garage door operator will reverse or stop when met with resistance during closing. If conditions exist that require repair, mark "YES " in VC-11 and prepare the appraisal "as-repaired" subject to the satisfaction of the condition.