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New FHA increased limits to $346,250 - properties under this price range just got a whole new market of buyers. 

FHA typically has a lower down payment of just 3%.  Although banks are typically requiring at least 10% down, ideally it is 20% or more depending on the use of the property.  FHA is a more expensive loan, but there is an option of rolling that into the loan along with monthly mortgage insurance. 

For the cash-light buyer, this is a very large deal - especially as banks are liquidating in the market and tax is about to conclude.  This is very positive for the market.

This blog does not constitute an appraisal nor does it substitute for competent legal or other representation nor is it advice to act on for your specific situation.  Consult an expert such as a competent attorney, a competent real estate agent, a licensed home inspection, licensed engineer, mold/pest or environmental hazards expert. 

Since some basic FHA standards are checked, clear information is provided that lets you know that an FHA appraisal is not a home inspection with a typical warning in "For Your Protection: Get a Home Inspection" summarized:

• A Home Inspection (who is not an appraiser) evaluates the physical condition: structure, construction and mechanical systems
• The home inspector identify items that need to be replaced or repaired
• Estimate the remaining useful life of the major systems, equipment, structure and finishes

An appraisal by an appraiser:

• Provides an unbiased opinion of the market value of the house as of the date the appraiser is at the house
• Checks for FHA minimum property standards and requirements
• Is overall concerned with the marketability of the property in the market

FHA does not guarantee the value or condition of a home.  In short, find out potential defects in your inspection period of your contract (or before you even sign) and either have the items repaired from the seller, walk from the deal if they won't and get your earnest money back or forever hold your peace if you choose to accept the items.  The point is to make yourself into an informed buyer with a go/no-go option or something in between with the seller fixing the items prior to close of escrow.  This is part of your due diligence in purchasing real estate.

Neither the appraiser nor HUD warrant the house so it is important that you not only get a home inspection, but that it be a good one with utilities on and all mechanical systems thoroughly and accurately checked.   It is also important that you find a licensed home inspector that has good communication skills, good report format and other aspects of communication so that you can understand what it is they are telling you.  At times you may have to get additional bids from contractors to correct items before you can make an informed decision as to what you are accepting in the property or negotiating.  You can find a home inspector at http://www.btr.state.az.us/regulations/home_inspectors.asp

You may wish to hire other licensed experts (who have expertise that appraisers do not) such as:

• Licensed Engineer, licensed contractors, licensed home inspector as mentioned, licensed pest inspector, mold/indoor air quality inspector,
• Any environmental expert for air, subsurface soil, etc.
• Surveyor and ALTA survey 

This blog does not constitute an appraisal nor does it substitute for competent legal or other representation nor is it advice to act on for your specific situation.  Consult an expert such as a competent attorney, a competent real estate agent, a licensed home inspection, licensed engineer, mold/pest or environmental hazards expert.