VA Appraisals

The VA appraisal is a very important part of the house buying process. A VA fee appraiser’s job is to walk through the home to be purchased, view the conditions of that home, and assign a fair market value to it. This helps establish the VA loan amount which is the lesser of either the fair market value (plus any allowable extras) or the sale price of the home (plus any allowed extras). The appraiser is also responsible for making sure the property meets VA minimum property standards and identifying issues that may be in violation of those standards.

In such cases, the appraiser either recommends corrections or explains why corrections are not possible (and therefore causing the property to be rejected for the VA loan). In some cases, corrections may be waived but only on a case-by-case basis.

The VA appraisal requires a fee--the borrower pays this fee as a typical part of purchasing a home using the VA loan benefit. The VA appraisal fee is for services rendered and is not dependent on the outcome of the appraisal. If the appraiser requires corrections and a subsequent compliance inspection to make sure those corrections have occurred to the satisfaction of the Department of Veterans Affairs, the borrower must pay for the compliance inspection as well. Again, these are fees for services, the outcome of those services is not taken into consideration.

Appraisals are required. Many borrowers in the planning and budgeting stages of their VA home loan preparations want to know how much the appraisal will cost; there is no centralized fee structure for appraisals. The amount you will pay as a VA borrower depends greatly on the housing market you live in; there are different fees and different requirements in every state. Borrowers can check the fee structure and timeliness requiremnents for their state at the VA official site: http://www.benefits.va.gov/homeloans/fee_timeliness.asp

Borrowers should know that the VA appraisal process is NOT the same as a home inspection. The appraiser does not guarantee your new home will be free from defects or other problems. Just because the home passes the appraisal does not mean the borrower should ignore hiring a home inspector for a more complete review of the property.

VA appraisers are not expected to be experts in all areas of the home. For example, the appraiser is not required to step onto the roof. If no obvious problems with the roof are detected, the home may pass the appraisal process--but a home inspector could discover things about the roof no appraiser could detect without stepping onto the roof. The VA appraisal process is not a seal of approval. Borrowers should always hire a home inspector to take a closer look at the home following the appraisal.

VA appraisals require the home to meet both VA minimum property requirements AND state/local building codes. Just because a particular issue is not mentioned by VA rules does not mean the home is ready for a VA mortgage. If the property is in violation of state or local building ordinances, the appraiser noticing those violations will recommend corrections or fixes as a condition of loan approval.

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