VA Appraisals

VA appraisal is not substantially different from an ordinary appraisal, but there are significant differences which need to be understood. As with a standard loan on property, it is the loan officer who will order the appraisal. The lender needs this vital information in order to decide whether or not to lend on that property, and, if so, how much to lend based on the estimated value. The difference here is that the appraiser is not directly engaged by the lender, but is randomly assigned by the Department of Veterans Affairs. This system is designed to ensure a fair appraisal for both the lender and the potential borrower.

Appraisals for VA loans should be ordered as quickly as possible, to make the process as smooth as possible. As with a conventional appraisal, the report needs to contain a proper detailed analysis of the site, and of the property itself, along with a statistical analysis of property sales in the surrounding area, and in areas where house prices ten to be substantially similar.

This statistical part of the appraisal can be more difficult to carry out in an area where property is rarely traded, and especially on a new development. New development property will probably have no sales data with which to make an accurate assessment. The counter to this is, of course, that the assessment of the property itself should be so much easier, as there should be no structural damage.

In the specific case of a Department of Veterans Affairs appraisal, the structural analysis of the property will need to be performed even more diligently than usual. Although the lender will always rightfully assign great importance to this part of the appraisal, as it will directly affect the amount of risk involved in lending money on the property, in the case of a VA loan, the Department of Veterans Affairs itself has a major interest.

If any of the faults within the property itself amount to a security risk, then the loan will not be approved no matter what the other circumstances. There must be no missing fixtures which can provide a risk of falling, and nothing loose which could fall in on someone below. If repairs are necessary, they will have to be carried out, and the property reappraised, before the lender will consider a loan on the property.

Only in rare circumstances, for example where weather conditions would make the carrying out of a repair inappropriate for a few months, would a lender be prepared to lend money on a property which was not immediately in liveable condition. Even then, some form of guarantee would apply, that the repair would be carried out as soon as possible.

If your VA appraisal comes up with a figure which is too low, you can ask for the value to be reconsidered. If that does not work, there are still other possibilities. One of these is to raise the money from other sources to cover the difference between the valuation and the sales price. That is usually easier said than done, so you could try asking the seller to come down in price. Again, the seller obviously wants to realize the highest possible price for the property, so this is no easy option. This just leaves the possibility of negotiating a higher rate with the lender, in exchange for money being advanced to cover the difference. The loan can never exceed the amount of the VA appraisal.

Appraisers, Real Estate

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