What’s to deal with the VA Appraisal?
In talking about the VA Appraisal process it is easy to fall down a rabbit hole into a lot of excess information. What you need to know is there are many opinions out in the market about the VA Appraisal. Unfortunately, there are a lot of Realtors and professionals who have not worked with the VA loan product before or have very limited experience. This is why who you work with matters whether you are buying or selling, you need someone who thoroughly (and intimately) understands the specific process. Let’s go through 3 Myths about the VA Appraisal you should know:
Myth 1: The Appraisers job is to determine the value of the home.
Truth: It is not the Appraisers job to determine the value of the home. Let me say it again for those in the back… it is not the appraisers job to determine the value of the home! As I say <type> this I can feel every agent and internet troll who will see it tensing up excited for the epic keyboard battle to come. But it’s true, listen - The VA Appraisal is ordered by the lender, and required by the VA to determine if the home is worth at least what you are paying for it. Their job is to determine if the price can be supported by comparable sales in the area, they have no reason to appraise a home for more than what you are buying it for. Because of this, it is very rare for a VA Appraisal to come back above the purchase price, so if yours does – rejoice! It is far more common for the VA appraisal to come back down to the dollar of what you are paying. If you want a truly accurate picture of what the home is worth review your agent’s comparable analysis or hire a private appraiser to value the home.
Myth 2: VA Appraisals are nearly always low, and do not take market conditions into consideration.
Truth: VA Appraisers are more times than not also qualified to appraise for other loan types, so while the process is different – it’s rare to encounter bias on the part of the Appraiser. That’s not to say many VA Appraisal situations are not frustrating, sometimes the appraiser is simply wrong. But in my experience of averaging over 70 VA Loan transaction closings per year, 8 times out of 10 the VA Appraiser will come back fair.
Myth 3: If the VA Appraisal does not come back at value, we cannot buy the home.
Truth: Once the Appraisal comes back, if it is low, our first step is to work on renegotiating the contract. As long as the real estate professionals you’re working with are creative, and well versed in the VA Loan process - it’s extremely rare to not be able to come up with a solution. In my career, I have only ever had one that could not be renegotiated. So try to avoid becoming stressed, or losing all hope on the home.
The VA Loan Process is intricate, and the appraisal part of it is no exception. Don’t be afraid to ask questions, and have patience with it… VA Appraisals take, on average, 10 business days to be turned in by the appraiser once ordered. Some lenders will not order the VA Appraisal until after inspections, so in some cases we are more than midway through escrow before we have an answer from the lender on the outcome.
The most important thing you can do to ensure a smooth process is to work with a VA Loan expert when buying, building and selling. Did you know I have VA Loan experts in my network across the country? Reach out to me today for guaranteed expert services either provided by or vetted by the #1 VA Loan Transaction Realtor in the state of AZ.