Spring is almost here, and as the weather warms up, the real estate market will buzz with activity! If you’re planning to buy a home or help clients navigate the process, here’s something you’ll want to know. My friend Robin Livingston, a loan officer at Canvas Mortgage, shared some tips about appraisal deficiencies in a recent email. I thought I'd share them with you. They will help you avoid financing delays.

What Are Appraisal Deficiencies and Why Do They Matter?

Let's start with the basics. Appraisers evaluate homes and assign a condition rating from C-1 (excellent) to C-6 (needs significant repairs). Most lenders won’t approve loans for homes rated C-5 or C-6. If you’re eyeing a fixer-upper or a house with a little "character," this is critical to know upfront.

So, what lands a property in the no-go zone of C-5 or C-6? Robin broke it down, and here are the biggies:

C-5 and C-6 Deal Breakers

●      Active roof leaks

●      Significant plumbing issues or water seepage.

●      Uncapped or exposed wiring

●      Curled, cupped, or missing roof shingles.

●      Foundation problems

●      Non-functioning or end-of-life mechanical systems

●      Failing sanitary systems

If you spot any of these issues, it’s time to hit pause and call your lender. These problems don’t make the home less livable—they can stop your financing in its tracks.

What About Less Serious Issues (C-4)?

Okay, not all imperfections are deal-breakers. C-4 properties often have small issues. They can be fixed after the purchase. Here’s what might fall into this category:

●      Worn carpet or floor finishes.

●      Minor window cracks.

●      Dings in walls or missing trim.

●      Missing cabinet doors, handles, or light fixtures.

●      Dripping faucets

●      Damaged sidewalks or countertops.

While these might not derail financing, they’re still worth discussing with your lender before making an offer. Robin recommends looping in your lender early to avoid surprises.

How to Stay Ahead of Appraisal Issues

No one wants a dream home to become a financing nightmare. That’s why it’s so important to have a proactive team on your side. If you’re not sure about a property’s condition, reach out to your agent or lender for advice. They can help you navigate the process and avoid costly delays.

Why Robin’s Expertise Matters

Robin Livingston knows her stuff, and she’s passionate about helping buyers find solutions. Whether it’s tackling tricky appraisals or answering questions about financing, she’s always ready to help.

If you’re wondering how a property’s condition might affect your loan or have any questions about mortgages, don’t hesitate to reach out to Robin:

●      Phone: 601-336-1227 (Office) / 601-303-4663 (Mobile)

●      Email: robin.livingston@canvasmortgage.com

●      Address: 12 Keystone Drive, Hattiesburg, MS 39402

Takeaway for Buyers

Buying a home is one of the biggest decisions you’ll make, but with the right team and the right info, it doesn’t have to be stressful. Keep these tips in mind, and you’ll be one step closer to finding a home that checks all the boxes—without the financing hiccups.

Have questions about buying or selling a home? I’m here to help. Let’s make your real estate journey a success!

Beth Scharwath       Dec 1, 2024

Quick Answer:

Roof age isn’t just a maintenance issue—it can impact your insurance costs, loan eligibility, and even the affordability of a home. With many roofs in Hattiesburg nearing 20 years old post-Katrina, buyers need to know what to look for and what questions to ask before making an offer.

Why Roof Age is a Bigger Deal Than You Think

If you’re shopping for a home in Hattiesburg, you’ve probably got a checklist: number of bedrooms, good schools, maybe a big backyard. But how old is the roof? It’s not always the first thing buyers think about, but it can quickly become a major hurdle. Here’s why.

FHA and USDA Loan Rules on Roofs

FHA and USDA loans have strict guidelines about the condition of the roof—and they tie directly to the insurance policy on the home. If a roof isn’t up to par, it can make insuring the home difficult, and without insurance, the loan won’t be approved.

FHA Deductible Rules:

Homeowners and flood insurance: The max deductible is the greater of $1,000 or 1% of the dwelling coverage.

Wind and hurricane insurance: The max deductible is the greater of $2,000 or 2% of the dwelling coverage.

USDA Deductible Rules:

Homeowners insurance: The max deductible is the greater of $1,000 or 1% of the dwelling coverage.

Flood insurance: The maximum deductible is $10,000.

What Does This Mean for You?

If the insurer wants to add exclusion riders for an old roof or raise deductibles, it could disqualify the home from FHA or USDA loans. That’s a deal breaker if you’re using one of these loan programs.

The Insurance Complication

Here’s the challenge: Insurance companies are tightening the rules around aging roofs. As Hattiesburg homes reach the 20-year mark post-Katrina, insurers are getting pickier. Some common roadblocks include:

Exclusion Riders: Some policies exclude roof coverage for homes with roofs over 15 to 20 years old.

Higher Deductibles: For wind or hurricane damage, insurers may require high deductibles over the loan limits.

Non-renewals: Insurers may refuse to renew policies unless the roof is replaced or inspected.

All of this adds to the cost of owning a home, making it harder to stay within budget.

Don’t Skip the Property Condition Disclosure

In Mississippi, homes sold with the help of a real estate agent are required to have a Property Condition Disclosure Statement (PCDS). This document should include the roof’s age, any known repairs, and its current condition.

Here’s the catch: Sometimes the roof’s age isn’t listed because the homeowner doesn’t know, or it’s estimated. That’s why it’s so important to get a copy of the PCDS before making an offer and to have the roof thoroughly inspected during due diligence.

How This Affects Affordability

Let's break it down. Insurance costs and stricter loan rules can make some homes with older roofs less affordable than they seem. Even if the sale price fits your budget, the extra insurance costs or repair needs could throw things off.

What Buyers Can Do:

Ask the Right Questions: Always confirm the roof’s age and condition before making an offer.

Review Insurance Policies Early: Don’t wait until closing to find out what the insurance will cost or if there are limitations.

Negotiate Repairs or Credits: If the roof is an issue, ask the seller to address it or offer a credit to cover replacement costs.

Tips for Buyers Navigating Roof-Related Challenges

1. Get a Roof Inspection: Don’t rely solely on the PCDS. A professional inspection can uncover issues the seller might not even know about. I listed a home with an 18-year-old roof. The seller had tried unsuccessfully to get their insurance company to replace it. During the buying process, the buyer’s roof inspector found hail damage, and the insurance company ended up replacing the roof. It’s a great example of how thorough inspections can make a big difference.

2. Partner with an Experienced Agent: I've helped buyers and sellers in Hattiesburg for over 25 years. I can spot potential roof problems before they derail your deal.

3. Think Long-Term: A newer roof isn’t just about today’s costs—it’s about protecting your investment for years to come.

The Hard Truth Is. 

Roof age is more than just a number. It can affect insurance costs, loan eligibility, and affordability. This is especially true in Hattiesburg, where many roofs are 20 years old, post-Katrina. Ask the right questions. Partner with a knowledgeable agent. This will help you avoid surprises and find a home within your budget.

Ready to start your home search? Let’s make sure you’re asking the right questions and looking out for potential pitfalls. Even if you just have questions, reach out anytime. 

Beth Scharwath       November 25, 2024

Getting your home holiday-ready doesn’t have to break the bank! Whether you’re hosting family or just sprucing up your space for the season, these affordable tips will help you create a festive and welcoming atmosphere right here in Hattiesburg:

1. Deck Your Front Door: Add a budget-friendly wreath or DIY door decor to make a cheerful first impression.

2. Spruce Up with Greenery: Use local greenery or faux garlands to add festive charm to mantels and staircases.

3. Cozy Up Your Living Room: Swap out pillows and throws for warm, seasonal colors.

4. Light It Up: String lights around windows or porches to create a magical glow.

5. Set a Festive Table: Use inexpensive candles, ribbons, or pinecones to dress up your dining area.

6. DIY Holiday Crafts: Get creative with DIY ornaments or centerpieces using materials you already have.

7. Upgrade Your Entryway: Add a simple doormat or festive runner to welcome guests.

8. Bake and Display: Holiday treats not only smell amazing but also double as decor when displayed in glass jars.

9. Create a Scent of the Season: Use budget-friendly options like cinnamon sticks, orange peels, or holiday-scented candles.

10. Shop Local in Hattiesburg: Visit local markets for unique and affordable holiday accents.

These simple updates will help your home shine this holiday season!