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The House Introduces a H.I. Counseling Bill


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A bill to establish a home inspection counseling program at the federal level, HR4776, was introduced in the U.S. House of Representative in December of 2007. The bill was assigned to a committee but, as of this writing, hasn't been acted upon. To read the entire bill, click here. It looks like this is basically a bill that seeks to emphasize primarily to FHA and VA buyers that a home inspection is not automatically included in an FHA or VA transaction.

This may be the result of backlash at HUD. The rules for FHA and VA appraisals were modified nearly a decade ago to require that FHA and VA appraisers conduct cursory "inspections" of properties which they've appraised. Despite the use of a one-page information sheet about the process warning consumers that the FHA and VA appraisal is not the same thing as a home inspection, many purchasers in this most vulnerable of home buyer categories have purchased homes without getting inspections.

The confusion between an appraisal and an inspection, has resulted, time and again, in some families finding themselves in serious financial straits when issues that might have been discovered in a home inspection turned up. The bill seeks to establish training and provide training materials for full-time counselors, who are intimately familiar with the home buying and inspection processes, who will counsel buyers and ensure that they no longer confuse FHA and VA appraisals with home inspections.

What's your take?

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  • 2 weeks later...

I did an inspection the other day, buyer's agent was there for part of the job. The agent called today and said the appraiser called and was going to do a "drive by appraisal. " She seemed to think that I was suppose to be aware of this.

What really baffled her was why a second appraisal was necessary since I had already done one. Apparently she did not realize that I had done an inspection for the conditions of the house and the appraiser was considering the value.

Confusion? There ain't no stinkin confusion!

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The problem is with the #$%&@ agents telling naive, first-time buyers that they don't need "another inspection" since the "FHA inspector will find all the major issues".

I think legislation that removes reeltors from the entire inspection process would better serve the public.

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  • 2 weeks later...
Originally posted by Eric B

I did an inspection the other day, buyer's agent was there for part of the job. The agent called today and said the appraiser called and was going to do a "drive by appraisal. " She seemed to think that I was suppose to be aware of this.

What really baffled her was why a second appraisal was necessary since I had already done one. Apparently she did not realize that I had done an inspection for the conditions of the house and the appraiser was considering the value.

Confusion? There ain't no stinkin confusion!

I believe some FHA/VA Appraisers are using our inspection reports to save them time and effort, hence drive by Appraisals. As FHA/VA Appraisers they have the power to call for a complete home inspection, most buyers gladly give them a copy of the HI report to avoid paying for another one.

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Obviously, there is some confusion.

I had this e-mail this morning...

Richard -

We're shopping around for an inspector and saw your name on xxxxxxxxxxxxx. Are you qualified to do FHA inspections? Please let me know. Thanks.

Just in case I was missing something new, I did check out the FHA web-sites and also called a couple of of my "regular" realtors (don't start), which turned up nothing . So, my reply...

Hi xxxx,

The FHA appraisal process, which is more for the lender, requires an FHA approved appraiser. My understanding is that that appraisal is a little more involved than a normal appraisal, but still falls far short of a good home inspection in determining actual defects.

To the best of knowledge, there is no actual FHA “qualificationâ€

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Originally posted by hausdok

What's your take?

My take is the NAR will lobby to fill the counselor's position w/droids, who essentially flog the necessity of having a realtor steer the nimrod home buyer through the process.

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