An Approach to VA Loan Appraisals
Home appraisals are a critical component of any home-buying process, often being absolutely required to meet the lender’s standards and approval. A VA appraisal is specific to those military loans, ensuring that the property in question meets the VA’s Minimum Property Requirements while establishing the home’s monetary value. This is different than a professional home inspection, which is more for finding particular faults or potential issues with the home structure and infrastructure.
VA Loan Guidelines
VA appraisers follow a particular set of guidelines in order to meet VA approval standards. First of all, a VA appraisal must approach the property from a sales-comparison perspective instead of the usual cost-based calculations. This means the potential cost of rebuilding a damaged home does not impact the appraisal.
When looking for comps for a VA appraisal, only completed sales are considered valid. Listings, offers, and even in-progress sales do not count. Valid comps must also be kept in a rather narrow price range, even if other properties in the immediate area vary much more widely from the listed price. VA appraisal comps must have sold less than twelve months prior (preferably less than six months) and should be in close proximity to the property in question.
A VA appraiser is not obligated in any way to recommend any home repairs nor assure the buyer that the home is free of defects. This is why a separate inspection is critical to the home-buying process. Certain issues with the home may still fall within the VA’s Minimum Property Requirements.
VA Loan Appraisal Fees
VA loan appraisal fees often range between $350-$450 depending on your state. A comprehensive appraisal will include notations on the property details, maps, photos, and sketches of each floor and room. Value calculation will be provided, and if any repairs are needed to bring the property up to the VA Minimum Property Requirements standards, these will also be listed.
Loan appraisals are going to be greatly affected by current market conditions as home values fluctuate and lending standards tighten. Because of this, it is helpful to work with a real estate agent that focuses on VA issues, as well as a VA loan officer who understands the financial situation of those in military service or veterans. This not only can help you find properties that easily meet VA MPR’s, but also let you work with a lender who can better guide you through the loan approval and appraisal process.