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What Does a VA Appraiser Look For? Part One

In recent blog posts we’ve examined the basics on VA minimum property requirements. When a VA assigned appraiser reviews a home to see if it meets VA MPRs, he or she appraises the property with a set of criteria established by the Department of Veterans Affairs.

The appraisal is intended to make sure the property is safe, livable, sanitary, and marketable–but does not guarantee or insure the building lives up to local property codes–that’s a local compliance issue which is addressed at the local level.

Naturally if the appraiser does find something that doesn’t look right or is in violation of the VA MPRs, that issue is noted for the appraisal report, but the appraiser is primarily interested in insuring the home lives up to the criteria listed here and other requirements as issued by the VA. What areas does the appraiser specifically examine? There are many.

The VA requires the property for a single family VA home loan to be a “single, readily marketable real estate entity.” Any nonresidential use of the property must be, in the words of the VA Lender’s Guide, “subordinate to its residential use and character.” The VA won’t approve a single-family home loan for a building that is primarily commercial in nature, with living quarters making up a small portion of the floor space on the property.

It’s important to remember that a VA appraisal is not an inspection. Some appraisers include language in the comments section of the appraisal form that indicates the nature of the work done to determine fair market value on the property.

An example would read something like this:

“Appraiser has not moved or relocated any personal belongings to get a better view. Appliances and systems have not been tested beyond turning them on and off. The appraiser is not an expert in plumbing, heating, or electrical systems and the appraiser is only responsible for what is readily observable on the property.”

Borrowers or sellers concerned about the nature of the property in question should hire a qualified inspector to perform more extensive reviews of the home for a detailed report on the condition of it and heating, air conditioning, plumbing, etc.

Bruce Reichstein

About Bruce Reichstein

Bruce Reichstein is an Expert on (VA) Military/Veteran Home Loan Guidelines for over 26 years — www.VALoans.com. He is an experienced VA Loan Mortgage Banker who is passionate about assisting US Military Veterans utilize their Veteran Eligibility to purchase a home.

30 Responses to What Does a VA Appraiser Look For? Part One

  1. Pingback: What VA Appraisers Look For: Part Two | VALoans.com

  2. Karen says:

    My son-in-law is a disabled Veteran and they have been pre-approved for a loan. The problem is that in their price range, the homes available are mostly repossessions and short sales with additions to the homes that are not permitted by the county of Sacramento. My question is, does VA allow a home loan on a garage conversion (without a permit) if the borrow accepts it “as built”? It is not a room with plumbing, nor any other major alterations, the garage was simply converted to a living space. Thank you for your time in answering this inquiry.

    • Joe Wallace says:

      Much would depend on the local code requirements and the VA appraisal. Unfortunately there’s no way to tell in each specific circumstance what the VA might approve or deny but any building that doesn’t live up to local codes (missing permits, etc) runs the risk of being deemed unacceptable
      until they have been brought up to local code

      . No way to say yes or no for sure, but it’s definitely a possibility.

      • Joe Wallace says:

        Hi Byron–check with your VA Regional Loan Center for the most accurate information. VA rules do state that six years of service in the Guard/Reserve is required and any “lost time” is also required…but the rules don’t state that all six years have to be served in the same branch–the rules AS I READ THEM seem to indicate that it’s the length of service–not necessarily which branch–that is the key. VA can advice you on your specific situation but in general it would seem that you do qualify.

  3. Al says:

    Quick question for you, I’m interested in a foreclosure that it’s in really good shape but doesn’t have a stove or dishwasher. Will those two missing items cause a problem in qualifying? Like I said, it’s in great condition, just the two missing appliances have me concerned.

    • Joe Wallace says:

      Hi Al, thanks for your question. Has the home been appraised yet? I’m assuming you want to purchase with a VA insured mortgage loan–is this correct?

  4. Carlos says:

    Question, the last owner left the master bathroom unfinished, floor and wall tiles missing, sink, cabinet and toilet not installed but everything is in a closet including the tiles. It is an approved short sale for less than the comparables, the bank will not do any repairs and will not let me because of liabilities. Will the VA inspector see a problem even if the house has 2 more bathrooms?

  5. Hi,,,,My son wants to purchase my home as I have Parkinsons and will be moving to a Asst.Living at the end of this year. It needs a few repairs, the largest being the basement with some leakage in one corner, but nothing major. My main concern is the bathroom that needs to be converted to a walk-in shower as the tub is a hazard to me. We’ve already moved the washer and dryer to the main floor, utilizing one small bedroom. I can”t go up/down steps. However, the VA says these repairs need to be done by me, the seller, BEFORE it’s appriased. We were hoping to finalize the sale, get the money, then make the repairs. But, they say repairs need to be made first. Well, we don’t have that kind of money and was planning to fix things after we have cash in the bank. Why is this as we’ve been living wth these “needed repairs” for several years and it’s not being sold to a “stranger’…..we’re family ! ! Tell me why this is…..

    thanks

    • Joe Wallace says:

      There are several possible reasons– local housing codes could be a factor, or it could be an issue related to assigning the fair market value. I suggest calling your closest VA Regional Loan Centet to see if you might be able to appeal the decision based on the nature of the sale–family member to family member. There is no guarantee you will get a successful appeal but it is worth a try.

  6. Mel says:

    Hi-

    We have loan approval for a VA Loan. We have a strong feeling our offer with the house we’re interested in is gonna be accepted. The house was built in 2005, comps in the area were selling for about $10,000 less than the asking price. The seller counter-offered $9,000 less than the asking price, because of a moving date factor. The only thing I really saw that would be in question, would be some of the walls in the home. The current owners have young children and have the living room walls decorated with disney characters with fabric trees on one main wall. A bedroom upstairs has some fabric flowers on one main wall. Will these types of things lower the value of the home? Other than that, the house is fantastic. It has beautiful landscaping front and back, the house is clean, and each bedroom has different color walls to go with their theme of decorating. Thank you!

    • Joe Wallace says:

      Hi Mel,

      Sorry we can’t help you there–I can address issues related to VA minimum property requirements, but when it comes to valuation of properties and what could specifically raise or lower the fair market value, that’s something an appraiser would need to address. You might try asking your lender what’s typical in such cases or asking an appraiser in your area if such issues would affect the value of the property.

  7. bill and sharon says:

    we built our home in 2011 but due to a low appraisal (we live in the country in an aircraft community) we have mortgage insurance. we have decided to re-finance with VA which reduces our loan by $400/mo. We had our appraisal and it came back $60,000 less then when appraised 6 months ago! We finished our basement but was not given any credit for a finished basement. Our house is built into a hill with more than 50% of the basement above grade. We have done some research if a finished basement can add to the value of the house and so far it may not be full value but given some value. so, is the appraiser right in not giving any value or should we have been given some value for our walk-out/finished basement?
    thanks!

    • Joe Wallace says:

      There are many variables which could come into play here-if you want to appeal the appraisal, it’s best to contact your lender and the Department of Veterans Affairs directly for information on how to proceed. You should call the nearest VA Regional Loan Center for more details–you can find the one with jurisdiction in your area at http://homeloans.va.gov/rlcweb.htm

  8. Sam Ford says:

    I’m interested in a property that has an old pole barn on the property. It has had a few years of deferred maintenance and could be considered a hazard if left for a few more years. Maybe now for the overly cautious. Would this barn even be inspectable by the VA? I would hate to go under contract and lose money on inspections for something I don’t necessarily want if it ends up being a deal breaker. I’m just interested in the home and land.

    • Joe Wallace says:

      The safety issue could be a problem. According to the Phoenix Regional VA Loan Center handbook for appraisers, there is a requirement, where necessary, to “describe deferred maintenance not severe enough to require repair, such as a marginal (non-MPR) deficiency that presents no hazard to the occupant and/or the property improvements, or a cosmetic deficiency due to age, wear, or market appeal”.

      A feature that does–or might–present a hazard would be something noted in the appraiser’s report.

  9. Kip says:

    I am looking at a foreclosed home to buy. The home is 10 years old and everything structually is sound. However the last owner decided to remove the lighting fixtures and some of the light switches in the home before moving. Even took a tolet seat. Strange I know. I can’t imagine a VA Home appraiser finding anything wrong with the house beside the removal of the lighting fixtures and switch. All the appliances are there and appear to be original. It would only cost me a couple hundred dollars to fix it once i bought it, would they require that fixed before hand? Thank You in advance.

    • Joe Wallace says:

      A lot of that might depend on local building code requirements. Your local ordinances would have jurisdiction in such cases. VA appraisal guidelines have general information but don’t get down quite that far into specifics from what I read…I would ask the lender if there’s any past precedent in your area with situations like these and see what was done in the previous cases.

  10. Arnold De Hoyos says:

    We found a house that was build in 2006 and like very much. We offer the asking price of $172,900.00 We have been VA. approved. My concern is that the houses around are valve from $10,000.00 to $30,000.00 less than the one we like. Would there be any problems when the house we like be appraised by the va.?

    Thanks

    • Joe Wallace says:

      That would depend greatly on the outcome of the appraisal. VA borrowers are free to cover the difference of the VA loan and the asking price out of pocket or try to renegotiate the sale is the appraised value of the home is less than the asking price.

  11. Hunter gibson says:

    I’ve found a home in foreclosure at what I feel to be fair or even better. However there are two places at the base of the siding which have slight rot going up an inch or two. Also one corner eave joint has the same. Structurally the home is sound, cosmetically these areas slightly noticeable but apparent if one is inspecting. Obviously the bank will not do or allow repairs that I know of. Is this a deal breaker? I would repair this eventually especially if the VA made it a stipulation upon purchase, is that even an option if these discrepancies are a problem? Oh, one more thing, a baseball size hole is in the dry wall of one room. Easy fix but hard to miss. Problem? Thanks for your time.

  12. Candice says:

    Hello.
    We have found a home that we love, had the offer accepted and now just waiting on the appraiser. The house was built in 1890 and is in wonderful condition with a dry basement, all appliances and clean. During the inspection we found that the house has knob and tube wiring, a roof with 3 layers of shingles, but no leaks, and a hot water heater that we can’t find the vent to. We plan on fixing these issues as soon as we own the house. I am wondering if you think it will pass the appraisal. Thanks :)

    • Joe Wallace says:

      The answer depends greatly on local building codes, there’s no way to tell simply by examining VA minimum property requirements as your state or local codes must be observed as well.

  13. Daniel says:

    I recently bought a home that had a VA appraisal done, which I thought was also a inspection done per VA requirements (my misunderstanding). 3 weeks after closing and while doing paint work, I found serious rot and water damage in the ceiling, walls, and attic I dont know how it could have been missed by the appraiser, the 4point and wind mitigation inspector, or the WDO inspector. Is the VA appraiser liable for missing this? Or any of the other inspectors? Do I have any recourse as a VA buyer?

    • Joe Wallace says:

      The VA loan rulebook states that the appraisal is not intended as a guarantee that a home is free from defects. That said, if you believe your appraisal was not performed competently, the best course of action is to contact the VA directly and inquire about any recourse options you might have. Call them at 1-800 827 1000 to get started.

  14. brandon scott says:

    I want a home that is foreclosed but my realtor is telling that the home wont pass VA home inspection because the previous owner “stripped” the home. Meaning he took many light fixture and switches, some of the faucet and the dishwasher. I’m not sure I believe my realtor, should I? It is a home that if move in ready would be $270,000 but I could possibly buy it for $210,000. What are my options? Should I have a VA inspector look at it at least?

    • Joe Wallace says:

      That may depend on state or local building code and whether the home can pass the VA appraisal based on that code. The appraiser can recommend corrections and fixes as a condition of loan approval–the home may not be rejected outright if reasonable repairs can be made.

  15. James Humphries says:

    We are very interested in a rural home in SC. The house is in great shape, and sits on 33 acres. The house is a little over 45% value, and my research says that’s okay for the VA, but although many lenders won’t do it, I think I found one that will. All seemed well until the owner pointed out an unfinished barn/stables project. Even though the house is spot-on, and the valuation is good, would this barn project kill my appraisal and strike the deal? If they finished it, would that raise my cost? Does the barn have to be in similar shape as the house?

    • Joe Wallace says:

      If the appraisal has already occurred, there might not be an issue. However, state and/or local building code may apply and that would definitely be a factor where applicable if the appraisal has not occurred yet. The property value issue would depend on the valuation of comparable properties in the housing market.

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