As an appraiser, you are not expected to have the same level of knowledge as a professional home inspector. However, you are supposed to know more about residential construction, systems, and environmental issues than a layperson would. Here are five environmental hazards to look out for when inspecting a residential dwelling.
1. Mold
Dampness and mold go hand in hand. If a house has a dampness problem (roof leak, plumbing leak, basement dampness), it is a reasonably safe bet that there is also mold growing there somewhere. Mold is a fungus; there are thousands of different species of molds. Only a few hundred species are common in residential structures, and only a handful of those are harmful or allergenic to humans.
As an appraiser, you are not expected to identify hidden conditions. You are not required to look behind walls or remove insulation or carpet to find mold. However, if mold is readily observable, you must report it.
Since appraisers are not experts in the identification of mold, we recommend using the term “mold-like substance” in your appraisal reports. For example, “Appraiser has identified a mold-like substance on the front foundation wall.” This lets the intended users know that you have noted this substance but do not know whether or not it is actually mold.
Can you tell a toxic mold from a harmless mold based on its color? No. Only a professional tester can determine the species of mold that might exist in a property. When you encounter a mold-like substance, you should note its existence and take photographs. Depending upon the intended use of the appraisal, the client may want to have testing done. You might base the appraisal on the extraordinary assumption that the substance is not toxic or allergenic mold.
You should also be cognizant of a musty smell anywhere inside a dwelling. Even if there is no visible mold-like substance, the smell could be an indication of hidden mold.
Want more info on how to identify environmental hazards both inside and outside the home? Take our CE course, Residential Property Inspection for Appraisers.
2. Chinese drywall
Certain types of drywall imported from China between 2001 and 2007 have been identified to contain hazardous materials, including sulfur. Under certain conditions, this drywall will emit sulfur gases, which can cause health problems for building occupants. These gases have also been found to corrode copper and metal surfaces, including appliances, wiring, and air conditioners.
As an appraiser, you are typically not responsible for identifying Chinese drywall. The markings on the back of the drywall are the best indicator of its origin. You should not cut open walls to observe the markings. However, you should note a strong sulfur smell within a dwelling, as that could be an indication that the property has defective Chinese drywall.
3. Asbestos
Asbestos is a naturally-occurring mineral that consists of thin fibrous crystals. It was commonly used in the late 1800s and early 1900s for a variety of purposes, including insulation. It was widely used to insulate steam pipes, heat ducts, and ceiling tiles. It was also used in floor tiles and rigid shingle-type exterior siding.
In the 1930s, it was discovered that exposure to asbestos caused health problems such as lung cancer, mesothelioma, and a condition known as asbestosis, in which the linings of the lungs are scarred. According to some sources, asbestos-containing materials (ACMs) were used in residential construction in the United States until the 1990s.
What does this have to do with you, the appraiser? Like other environmental hazards, you are not responsible for testing or identifying asbestos. For example, floor tile that contains asbestos looks just like floor that does not contain asbestos. The same thing can be said for shingle siding; some types contain fiberglass instead of asbestos. However, they cannot be told apart without testing.
One of the most common and identifiable uses of asbestos is as insulation on hot water pipes and furnace ducts. If you come across this type of material, do not touch it or disturb it in any way. Note its existence, take photographs of it, and contact the client. If the asbestos material is intact and in good condition, it might not need to be removed. However, if the material is cracked, frayed, or damaged, it is considered to be friable. This condition allows asbestos fibers to be released into the air, where they can be inhaled.
4. Lead paint
Any house that was built before 1978 is likely to contain lead-based paint. Lead paint is not harmful if it is in good condition. But when it is peeling, chipping, cracking, etc., then it exposes the occupants of the house to lead. Children may chew on lead-based paint chips or breathe lead dust from cracked paint on window frames, and this leads to higher levels of lead in their bodies. A myriad of health and developmental problems are linked to lead exposure.
When you see chipping or peeling paint, can you tell simply by looking at it whether or not it is lead-based? No. It would need to be tested to make a definitive determination.
You may find defective paint surfaces on any painted surface inside the house: windows, doors, trim, baseboards, walls, ceilings, kitchen cabinets, etc. All exposed interior surfaces need to be inspected; you need not move furniture or personal property items.
FHA states that if the house was built prior to 1978, any defective paint surfaces are assumed to be lead-based, and must be scraped and painted in compliance with EPA requirements. If the house was built from 1978 onward, any defective interior paint surfaces are cosmetic in nature.
5. Lead water pipes
The well-publicized water quality issues in Flint, Michigan from 2014 to 2016 have brought the issue of lead in drinking water to the forefront of public consciousness. Many of the lead pipes that are still in use today are supply lines that run from the main water line in the street into the house. These lines are underground, and you are not responsible for identifying them.
Most lead piping inside houses was replaced years ago; however, there are still old houses that contain lead piping. Lead pipes can sometimes be difficult to distinguish from galvanized steel pipes, as they are both gray or metallic in color, and they are similar in diameter. You can tell them apart by using a magnet. A magnet will stick to galvanized steel but will not stick to lead. Are we advocating you start carrying magnets and checking for lead pipes? No, not in every assignment. But in some specific assignments (e.g., an appraisal performed for litigation over water contamination) such an action might need to be part of your scope of work.
Mold, Chinese drywall, asbestos, lead paint, and lead pipes are just a handful of the environmental hazards you might run into when completing an appraisal inspection. For a more comprehensive look at environmental hazards that are common in residential construction, enroll in our online course, Understanding Residential Construction.
Want more info on how to identify environmental hazards both inside and outside the home? Take our CE course, Residential Property Inspection for Appraisers.
