Have you had a deal fall through because a Distance Certification was needed at the last minute and failed? Was your customer upset that they were now out the cost of a home inspection, appraisal and other expenses? Well, hopefully, this newsletter can help shed some light on this problem.
Hancock Home Inspections is one of the areas only certified HUD Consultants. What this means, is, that we are often brought in on HUD 203(k) loans and FHA type loans to perform HUD Write Ups and Distance Certifications. Unfortunately, these are requested at the last minute, right before closing, rather than being done initially.
So, what is a Distance Certification? With certain types of FHA loans, underwriters will require a Distance Certification. When requested, a certified individual, such as HHI, will be asked to verify the distance, in feet, between the well and aspects of the septic system. Sometimes distances are also requested from the property lines. Below are the required minimum distances.
- Well casing to Septic Tank: 50 feet
- Well casing to front edge of drain field: 100 feet
- Well and Septic components from property lines: 10 feet
Many older homes frequently do not meet these minimum standards and then the deal falls through. Often times, if appraisers can identify and verify these distances themselves, they will. However, when they can not, I often get the call, to locate these aspects and perform and write up the Distance Certifications. Then if they do not meet minimum standards, the deal goes south.
Our recommendation is to identify this need right up front, even before the appraisal. Why not get out ahead of the issue. My recommendation is that when your customer is utilizing one these type loans, to ask the lender involved if a Distance Certification will be needed. Then you or the buyer can address the issue up front. If the well casing, septic lids, and drainfield are easy identifiable, you won't even need to hire anyone to certify it. Just take some quick measurements and make sure they are in compliance with the above distances. If you are unsure and want to verify this information up front, we can perform this service for $100. It's better than spending; say $400 on inspections, plus an appraisal fee, only to find out later that the deal is lost and perhaps a client for not knowing the need for this, up front.
Let's face it, your client feels you are the expert and relies on your expertise in these matters. We certainly understand that some realtors, especially new realtors in the industry, may not realize this can pop up or is even a potential requirement. So, hopefully we have shed some light on this topic.