VA Q&A - Top 5 Questions about VA Appraisals

VA Appraisals

VA appraisals are a type of home appraisal performed by a licensed Appraiser. They're very similar to a standard real estate appraisal report you'd expect to see on a Conventional Home Loan or FHA Home Loan.  To be eligible to perform a VA Appraisal, a licensed appraiser is required to obtain a special certification, over and above their normal licensing requirements, from the VA and must remain in good standing with the VA at all times.  To be VA-certified, an appraiser must be FHA-certified, and demonstrate a minimum of 5 years of geographic competency in a given real estate marketplace. A VA appraisal can only be used for a VA Home Loan, and can only be ordered by a VA-approved lender.  Generally-speaking, VA certified appraisers are some of the most highly-qualified appraisers in the industry.

 What do VA Appraisers look for?

There are TWO major parts of a VA appraisal: 

• 1) The market comparable analysis 
• 2) Condition assessment of the home

1)  The Market Analysis is essentially identical to that of a Conventional or FHA appraisal, meaning that the VA appraiser looks to see that the value of the home is in-line with comparable real estate sales of similar homes near the home, that generally have sold within the most recent 12 months.  This ensures that the Veteran is not overpaying for the home.

2)  The Condition Assessment of the home is exactly what it sounds like: the appraiser checks out the condition of the home, takes photos and measurements, and looks for obvious signs of damage or deferred maintenance. There is little difference in this approach vs a Conventional of FHA appraisal, and yet, this is the most misunderstood part about the VA appraisal.  The misconception is that it's extremely critical of the conditional of the home, which it's not.  

In fact, a typical Home Inspector's report (which is always recommended by nearly every experienced Realtor, for instance) is much more critical of a home's condition than any VA appraisal report, so there's nothing to be concerned about.  A licensed home inspector can stay at the home for 3-4 hours, but the typical VA appraiser visits a home for about 1 hour.    

Overall, a VA appraisal report is there to ensure that the Veteran is buying a home that is priced properly with the marketplace, is in sound condition, ready to live in, and free of obvious damage or deferred maintenance issues.  

Okay, that covers the basics. Onto the questions!

THE TOP 5 QUESTIONS ABOUT VA APPRAISALS

QUESTION 1:    I’ve heard that VA appraisals are tough. Is this true?  

• ANSWER: A VA Appraisal may be slightly more involved than a traditional Conventional appraisal; however, it is much less involved than that of a standard home inspection, but you’ll never hear a Realtor tell you not to get a home inspection.  The VA appraisal is there to for two primary objectives: A) is the Veteran paying a fair market price for the home? And B) is the Veteran buying a home free of obvious deferred maintenance issues?

QUESTION 2:     Can I order a VA appraisal myself? 

• ANSWER: No. VA appraisals can only be ordered by a VA-approved lender.3.     Do VA appraisers know the selling price?  Yes. When a VA appraisal is ordered by the lender, they are provided a copy of the executed sales contract.  When a buyer and seller go under contract, the contract price sets the market expectation, and the appraiser’s job is to go behind and ensure that contract price is in line with the current marketplace.

QUESTION 4:     Do VA appraisers go inside the house?  

• ANSWER: Yes.  VA Appraisers are required to inspect both the interior and exterior of the home.

QUESTION 5:     What do appraisers look for on a VA Appraisal? 

• ANSWER: VA appraisals are very similar to almost every other common appraisal. There are TWO PARTS: Market Value and the Condition of the home.

With respect to the Market Value, they look to make sure that the home price is in line with recently sold comparable homes within a 1 -2 mile radius, that have sold within the most recent year.

With respect to the condition of the home, a VA appraiser typically looks for the following items. Most of these issues are not unique to VA appraisals. ​​

• Appliances must be in working order
• Functioning heating system
• Evidence of existing or prior water damage (water stains on a sub-floor, attic moisture, roof issues)
• Evidence of prior or existing Wood Destroying Organism (WDO) damage, such as termite infestation.
• Rotten wood (including siding, deck, etc.)
• Pools must be safe and usable. No green or unkept pools.
• No peeling paint (interior and exterior)
• Loose flashing or any other sharp objects that could present a health and safety issue.
• No bare concrete floors.
• Electrical outlets must have cover plates
• Any miscellaneous issues that may be considered a health and safety issue.  

WRAPPING UP...

We hope you found this helpful! As always, if you’re looking to purchase, refinance or get preapproved to purchase a home anywhere in the state of Florida, we’d love to help.  Simply give us a call so we run some numbers for you and answer all your questions! 

You can also drop us a line HERE »

Yours in successful homeownership,

Derek Bissen
Loan Originator
NMLS#365627
Unconventional Lending Program Director