To some veterans and real estate agents, the VA home loan process is often stopped because of the VA appraiser that is assigned to the loan.
This may sound like a disadvantage but I have witnessed occasions where it was actually a blessing to the veteran that was applying for the VA loan.
The reason that loans are sometime brought to a standstill is because of what is often thought of as the “dreaded” VA appraiser. In other words the VA appraiser assigned doesn’t assess enough value to the property that the veteran is trying to purchase or refinance. On other occasions I have seen them require repairs to the property that must be repaired before the lender will approve the loan.
Depending on what side of the transaction you are on this may seem like a curse but I really feel that it can be a blessing in disguise. If you are applying for a VA home loan to purchase a home you typically want to make sure that the home you are buying is really worth what you are paying.
When you apply for a VA home loan, the lender that you use will order the appraisal from the VA directly and the VA will assign an appraiser from their list of appraisers. The lender has no selection in the process and the appraiser is selected totally at random.
I was speaking with the appraiser that I call for local Texas conventional and FHA appraisals the other day and we discussed the VA appraisal process. When I told him those VA home loan appraisers were chosen at random from a pool of appraisers, he told me “that is the way it should be”.
Now, this appraiser is very trustworthy and works in a similar manner to a VA appraiser. He has done appraisals for me that have come in under value for good reason; however the majority of them work out just fine.
The reason he made this comment is that many appraiser out there only care about “making the value” and have loan officers and real estate agents trying to push the appraisal to a price higher than what is reasonable for the property.
When VA home appraisers look at a property, they not only look at the condition of the property but they are also looking at comparable homes in the area that have sold recently. They try to find homes that are very close to the house being appraised, in the same subdivision, similar square footage, similar quality and similar age, among other criteria. They will also point out noticeable flaws in the property and note these as well.
Here is an example; a couple months ago I was helping a military member that was purchasing a home. After a couple days of searching they finally located a home in an area that they wished to live in and decided to make an offer. The realtor they were working with advised them that other homes in the area were selling for more and that they already had an appraisal to support the sales price, however when the VA home loan appraiser inspected the home and compared similar sales in the area they found the house was worth much less. When we compared appraisals, we found that the only homes selling for more were actually larger, fifteen years newer and over a mile away. The other appraiser had failed to mention multiple properties within three blocks that had sold for much less, in fact an identical home three doors down had sold for $15,000 less. When the seller of the home was presented with this information, they actually did lower the price to the appraised value. The military member got a great deal on his home and his VA home loan closed shortly after.
Overall, what the VA home loan appraiser is actually trying to do is make sure that the home you are purchasing is really worth the price you are paying. That is why I feel that VA appraisers are actually a benefit instead of a disadvantage.