Houston home sales have remained steady on a month-to-month basis, although June marked the 15th consecutive month of negative sales with single-family home sales falling 12.8 percent year-over-year.  Months supply of homes climbed to 3.1, the highest level since June 2020.

Days on market has been declining on month-to-month basis since January.  It took 45 days to sell a home in June versus 48 in May. It was 28 days in June 2022.

Per HAR/MLS:

Did you know deferred maintenance is included in an appraisal report? Deferred maintenance refers to items related to the home that need repair, but the owners have yet to fix or maintain them. If deferred maintenance is observed during an on-site property inspection, it can be noted on the appraisal report as it relates to the condition of the home.  When noted on your appraisal report, the loan process can be halted or delayed.

Per Fannie Mae, “Appraisal reports must reflect adverse conditions that were apparent during the inspection or discovered while performing research, such as, but not limited to, needed repairs, deterioration, or the presence of hazardous wastes, toxic substances, or adverse environmental conditions. Detrimental conditions of the improvements must be reported in the appraisal even if the conditions are typical for competing properties.”  The requirements also state, “The appraiser must identify items that require immediate repair; and items where maintenance may have been deferred, which may or may not require immediate repair.”

Appraisers must assign one of the following standardized condition rating on all appraisals using the Uniformed Appraisal Dataset (UAD) form:

• C1 – The improvements have been very recently constructed and have not previously been occupied. The entire structure and all components are new and the dwelling features no physical depreciation.
• C2 – The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category either are almost new or have been recently completely renovated and are similar in condition to new construction.
• C3 – The improvements are well-maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well-maintained. Note: The improvement is in its first-cycle of replacing short-lived building components (appliances, floor coverings, HVAC, etc.) and is being well– maintained. Its estimated effective age is less than its actual age. It also may reflect a property in which the majority of short-lived building components have been replaced but not to the level of a complete renovation.

• C4 – The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are functionally adequate. Note: The estimated effective age may be close to or equal to its actual age. It reflects a property in which some of the short-lived building components have been replaced, and some short-lived building components are at or near the end of their physical life expectancy; however, they still function adequately. Most minor repairs have been addressed on an ongoing basis resulting in an adequately maintained property.

• C5 – The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs, rehabilitation, or updating. The functional utility and overall livability are somewhat diminished due to condition, but the dwelling remains useable and functional as a residence. Note: Some significant repairs are needed to the improvements due to the lack of adequate maintenance. It reflects a property in which many of its short-lived building components are at the end of or have exceeded their physical life expectancy, but remain functional.

•  C6 – The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components. Note: Substantial repairs are needed to the improvements due to the lack of adequate maintenance or property damage. It reflects a property with conditions severe enough to affect the safety, soundness, or structural integrity of the improvements.

Properties with a condition rating of C6 are not eligible for sale to Fannie Mae. Any deficiencies impacting the safety, soundness, or structural integrity of the property must be repaired with a resulting minimum condition of rating C5 prior to loan approval.

Fannie Mae permits appraisals to be based on the “as is” condition of the property provided existing conditions are minor and do not affect the safety, soundness, or structural integrity of the property, and the appraiser’s opinion of value reflects the existence of these conditions.

Minor conditions and deferred maintenance are typically due to normal wear and tear from the aging process and the occupancy of the property. While such conditions generally do not rise to the level of a required repair, they must be reported. Examples of minor conditions and deferred maintenance include worn floor finishes or carpet, minor plumbing leaks, holes in window screens, missing handrails, or cracked window glass.

Appraisals also account for quality of construction, pest infestation, dampness, settlement, etc.

All in all, preventative maintenance is so important. Addressing a problem when it arises can save money and time. When maintenance is deferred, the problem can get worse over time. It can also severely reduce the number of potential buyers when you decide to list your home for sale.