- The Washington Times - Wednesday, June 21, 2006

Q:We are under contract to purchase a home that was built in 1960. The

mortgage is approved and we had a home inspection. The inspector was very thorough and spent a lot of time explaining his report to us.

In a nutshell, the house is in good shape, but there are some minor issues that need to be addressed. There are a couple of light switches that don’t work, a broken light fixture in the basement and a slow drain in the bathroom. He also said that the roof was new but that the gutters should be replaced.

We really like the house and aren’t terribly worried about these problems but are concerned that the lender will balk at making the loan because we are putting no money down. Our agent tells us not to worry. Is the lender going to revoke our approval because of the home inspection?

A: No. I’m surprised that your agent didn’t tell you that the lender doesn’t see the home inspection. The lender will certainly require an appraisal and review it carefully, especially when the borrower is looking for 100 percent financing. The appraisal report is a professional opinion of market value that’s determined by looking at similar homes that have recently sold.

The appraiser is not a home inspector and is not trained to dissect all aspects of the house. He is there to determine the market value of the home “as is.” A home inspector investigates the details of the house. The best way for a new homeowner to learn about his new asset is to follow the home inspector around during the inspection.

An appraiser is, however, required to note anything that might adversely affect the marketability of the home. Noticeable things, such as a very evident water stain on the ceiling will be disclosed on the appraisal report as evidence of a current or repaired leak in the roof. It’s not his job to determine whether the leak has been fixed.

The home inspector, on the other hand, will stick a moisture meter in the ceiling. This will determine whether the leak might still be in need of repair. The sellers may have repaired the leak years ago, but not the stained drywall on the ceiling.

The items listed in your home inspection are not significant enough to adversely affect the marketability of the property. I am not a real estate agent or an attorney, but as I understand it, most standard real estate contracts require that all electrical, plumbing, heating and cooling elements of the house be in working order.

The seller, under the terms of the contract, is typically required to repair any of these items. In your case, the seller should, indeed, repair the light switches and the fixture in the basement. The slow drain might be a gray area and subject to different interpretations, but most sellers would have no problem addressing the problem. The gutters, on the other hand, are more of a negotiable item.

A home inspection is important for two reasons: First, it identifies the defects of the house that need to be repaired under the terms of most contracts. Second, an expert takes a good look at the property and gives his opinion as to whether any major problems exist. If the lender accepts the appraisal report, you won’t have a problem.

Henry Savage is president of PMC Mortgage in Alexandria. Reach him by e-mail ([email protected]pmcmortgage.com).

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