After a natural disaster occurs, such as a hurricane storming through the area, there are generally two kinds of properties regarding real-estate transactions needing appraisals: Properties that have already been inspected by an appraiser, and properties that have not been inspected.
Here’s some bullet points about these.
- Subject property has already been inspected by an appraiser:
- Most lenders will require either a disaster area inspection report (DAIR), or a 1004D.
- Typically, only exterior observations of a property and its surrounding neighborhood are required.
- If damage is noted to a property’s neighborhood, then an interior/exterior inspection will be required, typically.
- If an appraiser has not yet completed a report, he or she will need to return to the property because detailed commentary will be required indicating whether the subject’s improvements and neighborhood were affected. Expect a fee for the return trip.
- For all jumbo and FHA loans, interior/exterior inspections are required. IMPORTANT NOTE: The inspection MUST be after FEMA declares an “incident end” date.
- Subject property has not yet been inspected by an appraiser:
- An appraiser will provide commentary regarding the recent disaster. It will include things such as whether a property sustained any damage, as well as if its neighborhood was affected.
- If an appraisal is for a jumbo or FHA loan, it is suggested that the inspection be delayed due to the incident end date. Otherwise, a 1004D or DAIR report will also be required, costing a borrower further fees.
If for any reason the conditions in the area are unsafe to inspect or travel through, an appraiser will notify the appraisal management company. In most cases, AMC’s will instruct their inspectors not to put themselves in harm’s way.
To find out if an area has been declared a natural disaster area by FEMA, please go to https://www.fema.gov/disasters .