The actual work for your loan team begins once you agree to purchase a house. A VA appraisal is one of the first things your lender will do. A VA appraiser is a third party contracted by the VA to evaluate the value and condition of a property. All VA purchase loans need an assessment.
Appraisals are important, but they should be distinct from house inspections, which give a more thorough assessment of the property's condition. Unlike the appraisal, there is no requirement for a house inspection, so distinguish the two.
However, many purchasers still opt to get one. Once they have signed a purchase agreement, many prospective purchasers immediately have a home inspection performed to uncover any issues with the property.
VA Evaluations Must Be Completed
You'll have several options if you're looking to buy a property. In contrast, you can't decline the VA assessment if you're getting a VA loan. A VA-approved appraiser must inspect any property being acquired with a VA loan. Your VA lender will initiate the appraisal process by submitting a request, setting up an appointment, and notifying you once the report is finished.
VA Appraisals Have Two Goals
Appraisers for the VA are responsible for doing two things:
- Value the house. To secure financing, your lender will want to know the property's current market value. For purchasers, knowing the market value ensures they don't overspend, and for lenders, it ensures they don't start borrowers out with an "upside-down" mortgage. The appraiser derives this figure from recent sales and current market trends.
- Verify that the home satisfies the VA's property standards (MPRs). The VA has its own set of Minimum Property Standards (MPS) that must be met. The general standards guarantee that the homes acquired by veterans are secure and ready to be occupied.
Upfront VA Appraisal Fees
The cost of the appraisal is often covered by the buyer. A house appraisal can cost anywhere from $600 to $1000 or more, depending on the state you're buying in and the sort of property you're buying. You can negotiate with the seller to see if they'll reimburse you for this closing cost.
VA Appraisals Usually Take 10 Days
The average VA evaluation turnaround time is ten days. However, processing timeframes vary widely depending on location, and the enormous volume in recent years could delay your project. Although the VA publishes state-specific "timeliness standards" for appraisals, these recommendations are not binding on any particular jurisdiction. Remember that the appraiser may need to return for a second inspection if repairs are necessary, which might push back the closing date.
The VA Appraisal Is Not A Home Inspection
A VA appraiser will thoroughly evaluate your home according to MPR standards. Even so, a professional home inspector will normally do a more in-depth and thorough study. A professional home inspector will provide a detailed description of each defect found in the property, in contrast to the VA appraiser, who will just look for issues on the MPR checklist.
The inspector takes pictures of defects, gives advice, and may even give a ballpark estimate of how much it will cost to fix them. You should only go into a real estate transaction after first getting a professional home inspection report since this document may be used to greatly improve your negotiation position. Before determining whether or not to proceed with a VA appraisal, some purchasers choose to have the home inspected.
VA Appraisals Aren't Scary
Even though the VA appraisal has the potential to significantly affect a home purchase, you should only be overly concerned about it if you're completely unprepared. A VA purchaser with little understanding is asking for trouble. Things might get challenging if you intend to do any of the following:
- Buying an old house
- Purchasing Farmland
- Acquiring a second property for use during vacation
- Investing in a property that does not qualify
- Avoiding Real Estate Agents When Purchasing a Home
- Dealing with a novice VA loan officer
VA Appraisals May Change Your Purchase.
The VA evaluation process often moves fast and smoothly. Even so, it's vital to remember that the VA appraisal's findings might alter the course of a transaction if the VA doesn't approve it. Take a look at these potential problems:
- There are no MPR requirements that have been met by the property. A buyer has many choices if an appraiser recommends repairs to bring the house up to Minimum Property Requirements. They can either persuade the sellers to pay for the necessary repairs or back out of the deal altogether.
- The amount of the loan is higher than the appraised value. If the appraisal results come in lower than the desired loan amount, the purchasers must decide between accepting the lower value or finding alternative financing.
