A conventional appraisal is strictly concerned with determining property value, but a VA appraisal goes one step further. A VA appraisal also differs from a home inspection. A VA appraisal might miss important details that only a home inspector is trained to identify. The VA loan program requires a VA appraisal often called a VA home inspection , but a standard home inspection is optional.
As the buyer, you owe it to yourself to completely examine the property yourself before you commit to your VA mortgage, and a home inspection is an important matter of due diligence. Buyers should strongly consider getting a home inspection, even before moving forward with the VA appraisal process.
A VA appraiser has two objectives: to establish a fair market value of the property and to ensure it is safe, structurally sound and free of health hazards. A home inspection is much more thorough than an appraisal. A home inspection is meant to be a complete top-to-bottom evaluation of the property. VA appraisers look for compliance with a set of basic health and safety standards set forth by the Department of Veterans Affairs.
In general, any visible health or safety concerns will pose an issue on a VA appraisal report. In some cases, sellers are willing to cover the cost of essential repairs rather than lose the sale.
You'll need to provide your own input on the condition of the property and make sure it's up to your standards before signing the VA loan agreement. If it's not, you'll need to negotiate further before agreeing to purchase the property.
This is where a home inspection can pay for itself. Sometimes the appraisal will come back with a lower home value than the amount of loan. If this happens, you can:. This is frustrating. Most of the time, necessary repairs can be completed without excess cost and time. Rooms can be repainted. Electrical boxes can be upgraded. Handrails can be replaced. Then you may need a second VA appraisal to confirm the updates have been completed.
For more information, review our guide on low VA appraisals here. Remember, if the appraiser requests work orders for repairs, he or she will likely have to come back to ensure that those items were actually completed, likely requiring an additional fee. Working with a real estate agent who is well versed in VA home loans, and is willing to help you get through the problems, will be the most helpful to you as a homebuyer. The VA has more requirements than say, an FHA or conventional loan, but their sole focus is that you are going to be able to fully enjoy the home.
The VA relies on the appraiser to make sure that the home is liveable and is a good long-term value for the veteran. But it also determines whether the home is safe and comfortable. Most homes that are in good condition will meet MPRs. You can read more about them here. VA loan appraisals can seem tougher than traditional home appraisals because they include an extra step: making sure the property meets Minimum Property Requirements.
If your Notice of Value comes in too low to support the purchase price of the home, your loan may not be large enough to buy the home. Expect at least a two-week wait for your VA loan appraisal.
The appraiser will also look for the presence of hazards such as lead-based paint, radon, mold, and mildew. The home must also have easy access from a public or private road during all four seasons. Your VA appraisal report is good for six months. Most homes close within two months, but if your closing gets delayed more than six months your loan officer may need to order a second appraisal. The VA feels the same way and will require the appraiser to let it know as quickly as possible if he identifies anything that threatens those.
The appraiser will value the home subject to repairs for these being carried out. But those repairs must fix the problem immediately and prevent recurrence as far as possible. That appraised sum should reflect the value the home will have after the repairs have been done. An appraisal is not a home inspection. If you want a full check of the structure and its systems furnace, HVAC, appliances … you have to pay a specialist home inspector.
If the home is in an area with a mild climate, heating may not be needed. That may be a fireplace or space heater. The owner will need to call in a licensed heating contractor who must certify in writing that an approved oxygen-depletion sensor is in place.
Leased systems and equipment belong to someone else. Some power purchase agreements do that. Those might actually detract from the value of the home because they may make it more difficult to sell later.
Solar, wind and geothermal all fall into this category. High-energy efficiency features can, too. However, an appraiser might spot defects either internally through moisture in rooms or the attic suggesting leaks or externally from the ground. But the appraiser should take a look from the access hatch. Again, dampness is the main issue here. But the appraiser will also look out for structural problems.
It needs to be safely hard-wired or plugged into a standard electrical outlet via a factory-fitted cord. Structural issues are a different story. If she spots large cracks or unstable sides, she can do one of two things. Proper above-ground pools complete with a filtration system and decking in good condition should usually be seen by the appraiser as adding value to the home. If your local authority sets standards for securing pools, yours must meet those.
If burglar bars are fitted, each bedroom must have a quick-release mechanism on at least one window. That counts as cosmetic. He may, however, require defective exterior surfaces to be repainted if damage may be being caused by weather. When it comes to lead-based paint, the year is key here. If the home or any addition to it predates that year, then it may be assumed that the paint present is lead-based. The appraiser will identify any defective lead-based paint.
And it will have to be remedied, regardless of cost. It will need to be either entirely removed or covered and sealed. The former involves washing, scrubbing and wire-brushing to clear away any defective surfaces. And then the application of two coats of non-leaded paint.
Covering involves removing the paint and then covering with drywall, plywood or plaster. Only then can new paint be applied. The VA takes this health threat very seriously. This is more of a threat to the structure of the building than to human health. The appraiser will look out for evidence of an insect infestation especially termites as well as fungus and dry rot.
And any damage must be repaired before you can get your loan. In that case, the builder must certify that radon-resistant construction techniques were used.
And that the home is up to all applicable codes for radon control. The VA lists some examples of environmental problems, but there may be others:. That applies to buried as in a gas station, for instance and above-ground facilities. But only tanks containing flammable or explosive materials need be reported. If the tanks are likely to affect the value of the home, the appraiser must make the necessary deduction based on comparable sales nearby. There are two main threats from such leases.
First, they may be an encumbrance, meaning they lessen your rights as the homeowner. In other words, they may make the home a less nice place to live.
The appraiser must assess how much either or both those affect the value of the property and adjust her appraisal accordingly. High-voltage transmission lines and high-pressure gas and L-P pipelines require an easement. No part of the home nor any part of an addition even a detached one can be located within such an easement. And, if the property is within feet of one of these easements, the appraiser must mention it in his report.
0コメント