Understanding VA Home Appraisals
Buying a home with any mortgage involves some type of home appraisal. If you’re buying a home with a VA home loan, however, you'll have to adhere to specific VA appraisal requirements. VA appraisal guidelines state that a VA-licensed appraiser must appraise your prospective home.
VA Appraisal Requirements
Getting your VA home appraisal is easy, since you don't have to do any of the work. Your VA lender takes care of filling out the VA appraisal form and arranging your appraisal:
- The fee for a VA appraisal is set and mandated in each state. Expect to pay between $300 and $400 for your appraisal.
- ;This appraisal fee usually is paid before the loan is closed.
- To prevent fraud, you won't be able to choose your home appraiser, even if he is VA-licensed. The VA will randomly assign an appraiser to your case.
- Your appraisal should be ordered as soon as possible, once you submit your completed loan package, to avoid any delays in closing.
VA appraisers are trained to assess the true value of the home you want to buy, based on other comparable homes listed in the area.
When the appraisal is complete, you'll receive a Certificate of Reasonable Value (CRV) based on what your appraiser feels the home is worth. For your loan to go through, the appraisal must be equal to or higher than the sale price of the home.
Unfavorable VA Home Appraisal
In some cases, a home doesn't appraise well. If the home you want to purchase appraises for less than the sale price, some possible reasons include:
- Poor condition of home
- Safety issues in the home, such as missing railings on stairways
- The home is in an unlivable condition
- Unrealistic asking price for home
If you've got your heart set on a home that appraised for less then the asking price, don't give up. Remember that the seller wants to sell this property, and you still have options:
- If the home appraised poorly due to safety issues or general condition, the seller can make necessary repairs that hopefully will raise the home's value. You can then request a "Reconsideration of Value" so that the new information can be taken into account when assigning a value to the home.
- If the price was unrealistic for the type and location of the home, you can negotiate with the seller to lower the price so that it matches the appraisal amount.
It's also important to note that VA home appraisals are not the same as home inspections. A VA home appraiser may note certain problems with the property you hope to buy, but may not spot other issues. It’s always a good idea to have the home professionally inspected before the purchase is finalized.