Before taking a deep look into the VA Appraisal Process we need to answer a common question. Clients often ask, “What is a VA home inspection?”
Clients often confuse VA appraisals with VA home inspections and these are not the same thing. VA home inspection is not a requirement for a VA Home Loan. Some states may require a VA Home inspection but that’s for inspecting the physical condition of the property.
On the other hand, VA appraisal is an assessment of the property’s value and condition done by VA appraisers. When you want to move ahead with a home purchase your VA loan officer or lender will request the VA to assign you a VA appraiser to assess your property.
Below is a detailed overview of the VA Appraisal Fees, what an appraiser looks for, and the process.
How Much Does a VA Appraisal Cost and Who Pays?
Generally speaking, home buyers are obliged to pay the VA appraisal fee and can vary depending on the location. In the Mid or Southern region of the country, the VA appraisal fee can range from $450 to $500. In the Northern region of the country, the VA appraisal fee can cost you $800 or more.
If your lender is Veteran friendly then the lender may pay the VA appraisal fee on your behalf. Paying the VA appraisal fee isn’t the lender’s responsibility neither is the lender’s legal obligation. However, a few lenders may do it as a token of gratitude for your years of service in the military.
For instance, GI Home Loans cover the full appraisal fee for the military officers because we are Veteran friendly. Our company is founded by a veteran; hence, it is our policy to stand by the veterans by all means.
What does a VA appraiser look for?
The VA appraiser will look into your property and ensure that it meets the Department of Veteran Affairs and lender guidelines. The VA appraisers will also assess the value of the home if it’s worth the price you are paying. Let’s break this down to give you more clarity:
1) Determining a Fair Market Value for the Property:
The VA appraiser’s first concern would be to determine a “fair market value” for the property. Appraisers will look at recent comparable home sales to determine the property’s appraised value or real value. Next, the lender will fund the property which would cost less between the appraised value and the selling price of the home.
2) Minimum Property Requirements
In pursuit of that goal, the VA appraiser will conduct a check based on the VA’s Minimum Property Requirements and address every concern on the appraisal report. Homes must meet the Minimum Property Requirements to be approved for financing,
VA appraisers will look at the property’s interior and exterior and assess the overall condition. They’ll also recommend any obvious repairs needed to make the home meet the MPRs. Remember, this isn’t a home inspection, and the VA doesn’t guarantee the home is free of defects.
The VA Appraisal Process
In the first place, the VA appraiser will compile the value and property assessment report and upload it on the VA’s secure web portal. This process can take around 10 days or more. The lenders wouldn’t have a say over the VA appraiser’s timeline or their analysis.
Next, the VA appraiser’s report will be reviewed by a VA staff appraiser or a lender’s Staff Appraisal Reviewer (SAR). If lenders don’t have their own SAR then they must submit their appraisals directly to the VA for review.
It must be remembered that Appraisers and SAR have different roles to play. The appraiser assesses your property value and condition in the initial stage. On the other hand, the SAR reviews the appraiser’s assessment for accuracy. The SAR also ensures that the appraiser’s assessment is meeting the lender and VA appraisal guidelines and isn’t missing out on anything.
The SAR will issue the Notice of Value (NOV), the final appraised value of the home in 5 working days. If the SAR needs to obtain additional information from the VA appraiser then it may take longer to issue the NOV.
The NOV may demand a termite inspection or a copy of the private road agreement. The NOV can also ask you to prove that the condominium is in a VA-approved development. Moreover, you may need to show substantial proof that the water source meets the requirements.
It is mandatory to fix the NOV issues to close the loan. However, your lender may allow you to make repairs after closing upon mutual agreement. It should be noted that policies vary from one lender to another. So, check out if your lender is willing to allow repairs after closing if you deposit money in the escrow.
Our Advice to Veteran Buyers:
Buying a home is a complicated process. So hire a VA Home Loan expert to make your life easier. An experienced VA lender would be able to:
- Determine if your chosen property meets the VA property guidelines and can pass the VA appraisal process
- Provide you VA loan appraisal checklist beforehand
- Guide you through the buying process with ease where you don’t have to worry about what to do next
- Tell you exactly what documents you will need and complete all the paperwork on your behalf
Are you all set to get into your dream? Call us and talk to our experienced VA Home Loan experts to help you out. Feel free to ask us your questions in the comment section below and our experts will answer them for sure.