Understanding the VA Appraisal Process for Homebuyers

For Veterans using a VA loan to buy a home, one critical step in the process is the VA appraisal. This appraisal ensures that the home meets the Department of Veterans Affairs (VA) requirements for safety, soundness, and value. Understanding the VA appraisal process is key to avoiding delays and ensuring that your home purchase goes smoothly. Here’s everything you need to know about the VA appraisal and how to prepare for it.

What Is the VA Appraisal?

The VA appraisal is not the same as a home inspection. While a home inspection is optional and focuses on identifying issues with the home, the VA appraisal is required by the VA loan program and focuses on ensuring the property meets the minimum standards for safety and habitability. It also verifies that the home is worth the price you’re paying, protecting both you and the lender from overpaying for the property.

In essence, the VA appraisal answers two key questions:

1. Is the property safe and livable?
2. Is the property worth the agreed-upon sale price?

Key Components of a VA Appraisal

The VA appraisal covers several aspects of the home and property:

1. Safety Standards: The VA appraiser will look at the home to ensure it meets certain safety and habitability standards, such as functional utilities, a safe structure, and no significant hazards.
2. Market Value: The appraiser will compare the home to similar properties in the area (also known as comps) to determine if the agreed-upon sale price is in line with the home’s market value.
3. Minimum Property Requirements (MPRs): The VA has established MPRs that the home must meet to be eligible for VA financing. These include standards related to the home’s foundation, roof, heating system, and more. If the home does not meet these requirements, repairs may be needed before the loan can be approved.

What Happens During a VA Appraisal?

Once you’ve gone under contract on a home, your lender will order a VA appraisal. A licensed VA-approved appraiser will visit the property to evaluate its condition and determine its value. The appraiser will review key aspects of the home, including:

• Roof and Foundation: The appraiser will check that the roof is in good condition and that the foundation is structurally sound.
• Plumbing and Heating: The home must have adequate plumbing and heating systems that are in working order.
• Electrical Systems: Electrical systems should meet safety standards, with no exposed or faulty wiring.
• Water Supply and Sanitation: The property must have a reliable water supply and a functional sewage disposal system.
• Access and Utilities: The home must have safe access, meaning it can be reached by roads or driveways, and it must have working utilities (electricity, water, gas).

The appraiser will also compare the home to recently sold properties in the area to determine if the sale price matches its market value. This helps ensure that you’re not overpaying for the property and that the lender is making a sound investment.

How Long Does a VA Appraisal Take?

The time it takes to complete a VA appraisal varies by location, but typically it can take anywhere from 7 to 10 business days. After the appraiser has completed their evaluation, they will provide a report to your lender. The report includes the appraiser’s estimate of the home’s value and any necessary repairs required to meet VA standards.

What If the Appraisal Comes in Low?

If the VA appraisal comes in lower than the agreed-upon sale price, don’t panic. You have a few options:

1. Negotiate with the Seller: Often, sellers are willing to lower the sale price to match the appraised value, especially if there are no other offers on the table.
2. Request a Reconsideration of Value (ROV): If you believe the appraiser overlooked key information, your lender can submit additional evidence, such as recent comparable sales that support a higher valuation.
3. Pay the Difference: If you really want the home and the seller won’t budge, you can choose to pay the difference between the sale price and the appraised value out of pocket. Keep in mind that this option requires extra cash upfront.
4. Walk Away: In some cases, walking away from the deal may be the best option if the home’s appraised value doesn’t align with the sale price and you can’t reach an agreement with the seller.

What If Repairs Are Required?

If the VA appraiser finds issues that need to be addressed to meet the VA’s Minimum Property Requirements, the repairs must be completed before the loan can be approved. Often, the seller is willing to make these repairs, but it’s important to include a contingency in the purchase contract that allows for negotiation of repairs if they arise.

Common repairs that may be required include:

• Fixing a leaky roof
• Replacing missing or damaged windows
• Addressing electrical hazards
• Repairing plumbing or heating systems

Once the repairs are made, the appraiser may need to return to the property to verify that the issues have been resolved before the loan can move forward.

VA Appraisal vs. Home Inspection

While the VA appraisal is mandatory, a home inspection is not. However, it’s highly recommended to schedule an inspection in addition to the VA appraisal. A home inspection is more detailed and focuses on identifying potential issues with the home’s structure and systems. It gives you a clearer picture of the home’s condition before you commit to purchasing.

Summary: What to Expect from the VA Appraisal Process

The VA appraisal is an essential step in the homebuying process for Veterans. It ensures that the property meets safety standards and is worth the price you’re paying. By understanding the appraisal process, you’ll be better prepared to navigate any issues that arise and make informed decisions about your home purchase.

Call to Action

Ready to buy a home using your VA loan benefits? Let Katita Slemp at Idaho Bliss Realty Partners guide you through the process, including navigating the VA appraisal. Contact Katita today at (208) 891-1222 to explore your options and secure your dream home with confidence.

For more information, visit the Idaho Bliss Realty Partners.