DEAR BARRY: An article on your website declares that an FHA appraisal is not a reliable disclosure document for homebuyers. In it, you advise buyers not to rely on the findings of an FHA inspection in place of a home inspection. I think that article was an unfair treatment of FHA appraisers and am wondering if you have changed your mind since you wrote it. –Lawrence

DEAR LAWRENCE: That article was never intended to denigrate the qualifications or professionalism of FHA appraisers or to minimize the importance of what they do. However, there is an enormous difference between a home inspection and an appraisal — even an FHA appraisal — and homebuyers need to be aware of this.

Many homebuyers have made the mistake of equating a home inspection with an FHA inspection. They rely on the findings of an FHA appraisal report and forego the services of a home inspector. Then they move into the home, discover undisclosed defects, and wonder what went wrong. The intent of my article was to prevent that kind of disappointment.

The primary purpose of an appraisal is to measure the fair market value of real property. FHA appraisals go a step further by reviewing the general condition and operability of various building components and fixtures. But compared with a thorough home inspection, an FHA inspection is a general overview at best.

Some FHA appraisers will disagree with this opinion, but we are discussing two entirely different kinds of inspection, with divergent standards for evaluating property conditions.

If you disagree, then compare the following job description with an FHA inspection:

  • Home inspectors walk on roofs, climb through attics, and crawl through foundation subareas.
  • They inspect the innards of fireplaces and chimneys, evaluate spark arrestors and chimney caps, remove the covers from circuit breaker panels, and test outlets for grounding, polarity and GFCI compliance.
  • They inspect water heaters for function, safety, and proper installation (including gas connections, exhaust venting, fire clearances, operability, and more).
  • They inspect garage firewalls, evaluate site drainage, operate and test built-in appliances, and evaluate heating and air conditioning systems (including burners, gas connections, exhaust venting, fire clearances, condensate drainage systems, and so on).
  • They test the operational condition of sinks, showers, tubs, and toilets (including the insides of tanks).
  • They verify proper room ventilation, fire escape compliance for bedrooms, smoke alarm compliance, garage door safety compliance, pool fence compliance, water pressure compliance, and various conditions involving fire-safety for wood stoves and gas-burning fixtures.
  • They check for fogging between dual pane windows and for signs of past or current building leakage (whether due to faulty plumbing, defective roofing or groundwater issues).
  • They evaluate physical damage, deterioration, improper construction, noncomplying installations, evidence of building settlement, and much, much more.

FHA inspectors do not spend three or more hours on site to conduct this kind of in-depth visual examination of a home. They inspect according to Federal Housing Administration standards, which are far less exacting. Home inspectors do something that is entirely different, utilizing different procedures, based upon different standards of practice. To equate one type of inspection with the other can be a costly mistake for homebuyers.

Since writing that article, my opinion on this has not changed.

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