A VA appraisal is a critical step in funding a VA loan. Let’s examine the appraisal process and highlight the key points every veteran should understand.
Don’t try to order your own VA appraisal!
The VA lender is responsible for ordering the appraisal. This process normally takes place just after the borrower has submitted their entire loan package.
The Department of Veteran’s Affairs will assign a VA loan appraiser. In order to prevent appraisal fraud, the homebuyer will not be able to choose which appraiser performs the work.
The approximate cost of a VA loan appraisal is around $400.00. This fee is state-regulated so it depends on the location of the home sale. The VA loan appraisal fee, in most cases, must be paid before the VA loan is closed.
When dealing with appraisals, the financing can be delayed if the property is not up to par. VA appraisal guidelines can be found on the Veterans Affairs website. These rules discuss the particular instances that could cause a home to appraise for less than the sale price. In order for a VA loan to fund, The appraisal must meet or exceed the purchase price.
If your home does not appraise this could be why
- The home is not in livable condition
- The home is in poor condition-if there are repairs needed they must be completed before the VA loan is closed.
- There are safety issues with the home; lacking a home foundation, no railings on a stairway; etc.
After a VA loan appraisal is conducted you will receive a CRV (Certificate of Reasonable Value) which will be based on the VA loan appraiser’s estimate of the property’s value.
If your appraised value is low, take these actions.
- Negotiate the sale price of the house with the seller in order bring the price down to meet the VA loan appraisal amount.
- Make a down payment to cover the difference. (I only recommend doing so if you have a home you can’t pass up.)
- Request a “Reconsideration of Value” if there were new comps and additional information that would raise the value of the home, which were not available at the time of the original VA loan appraisal.
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{ 14 comments… read them below or add one }
Do I need to be a VA approved appraiser in order to provide an appraisal review on a VA appraisal?
Walter,
Only VA approved appraisers are allowed to do VA appraisals including reviews. Also, VA appraisal reviews are typically handled from within the bank. Even if you could do the review, chances are your comments would be disregarded unless your contacted by the bank.
Who pays for the appraisal upfront. Can the borrower pay the appraiser at time of appraisal with a money order.
Hello Glen,
It’s a sticky subject. This is one of those rules where the VA says one thing and the banks do another. And remember, the banks have the money and the banks make the rules. In most cases, the banks will try to get the borrower to pay for the appraisal upfront. Your best bet is to follow the advice of your lender as practices (and some of the laws) vary across the country.
A VA Apprasier was sent to do the apprasial. The home had an area in the garage where there was a hole in the ceiling drywall. The apprasier said he now has to come back to see that a patch was complete and told me it would cost $55.00 That the charge was a VA rule. Is this a VA rule or is this just an apprasier trying to make money
Hello Sid,
Thanks for the comment! Although the VA does regulate which appraisers do VA appraisals they don’t regulate the price. So, you will find VA appraisal costs vary greatly depending on location and level of work performed. In your case with a repair or home improvement the appraiser has to issue a completed appraisal (1st visit to your home) and a rider or addendum (2nd visit) noting that all the work was done and is satisfactory. In a nutshell, the appraiser IS trying to make extra money AND their doing MORE work.
What can you do if after the VA appraisal is completed and the loan is closed, the sellers remove property that was included in the appraisal?
I have a VA appraisal that has 7 comps. 5 of the 7 are over 6 months old. 3 are over 10 months old. I have comps 1.25 away from my subject and the appraisers refuses to consider them. what recourse do i have. these VA appraisers are like GOD. they have all the power and there is no check or balance. it is a very bad system.
Can a VA loan fee appraisal not clear a closing for any reason such as needing to verify a business license from a home inspector who inspected a home that is under contract? The VA appraiser requested that the inspector ‘s state of GA business license be verified and what type of license she has before they clear closing is the a requirement of VA?
Is a 20 year old roof in excellent condition in south florida an issue for a VA inspection or does the roof need to be newer?
Depends on the appraiser doing the inspection and the bank. Either one could make it an issue.
I am not clear with your question. Who is making the request? The appraiser or lender?
Steve, I agree. It’s a bad system. You may have a shot at disputing your appraisal but that would need to be initiated with your bank.
That is a civil issue. You can take them to court and fight it legally. Make sure the “property in question” is listed in the purchase and sale agreement. If it’s not listed, you probably won’t have much recourse.