VA appraisals

VA Loan Appraisal Fees: Who Pays?

November 22, 2018

VA Loan Appraisal Fees: Who Pays?

There is often some question about who is required to pay for certain aspects of the VA home loan process. When the buyer finds a home he or she wants to make an offer on, it must be appraised by a VA-approved professional to insure the property is inhabitable, and meets VA minimum property requirements.

The appraiser may find areas which need correction or repairs; any such area must be addressed to the satisfaction of the VA before the loan is closed or within a reasonable amount of time as described in VA regulations.

An appraisal which requires such fixes may also demand a compliance inspection to happen at a later date to insure any issues are indeed corrected to the satisfaction of the Department of Veterans Affairs. In both cases–the initial appraisal and any required compliance inspection–the borrower is responsible for paying the appraisal fee. The borrower is also required to pay if he or she requests a second appraisal or a reconsideration of value.

But the VA borrower cannot be required to pay for appraisals requested by a third party. The borrower and the lender may request an appraisal, but if the seller or some other third party wanted an appraisal it would have to be paid for by the third party.

That includes situations where the lender or the seller want a reconsideration of value. It’s one thing for the buyer to request a new appraisal and agree to pay for it; it would be another issue entirely if the lender or seller had the power to demand another appraisal and require the borrower to pay for it. VA loan regulations forbid this, simply stating “The veteran cannot pay for an appraisal requested by the lender or seller for reconsideration of value.”

VA loans are designed to prevent arbitrary requests for re-appraisal simply because the borrower, lender, or seller may disagree with the results of the original review of the property. The VA reviews requests to re-value a home on a case-by-case basis.

Another part of the VA rulebook addresses this payment issue from a different angle. The borrower must not be charged for services not actually rendered, whether they are appraisals, re-appraisals, flood zone determination or any other instance where money is paid for a service to be completed.

The VA rules are designed to protect borrowers and lenders alike, and to keep the VA loan process standardized in certain areas to prevent impropriety or the appearance of impropriety in the transaction.

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18 Comments
  1. Evangeline Billingslea

    Can a VA loan fee appraisal not clear a closing for any reason such as needing to verify a business license from a home inspector who inspected a home that is under contract? The VA appraiser requested the inspector state of GA license be verified and what type of license she has before they clear closing is the a requirement of VA?

    • Joe Wallace

      Hi Evangeline--not sure I understand your question. VA fee appraisers must be VA approved. If there is an issue or complaint with one, the Regional VA Loan Center with jurisdiction in your area would be the agency to contact for more information. You can find the VA loan center that has jurisdiction in your area here: http://www.benefits.va.gov/homeloans/rlcweb.asp Hope this helps!

  2. john buel

    why do i need to pay for an apprailal fee when i allready have a contract? va loan gi bill

    • Joe Wallace

      Hi John, thanks for asking. An appraisal fee is required because the appraisal is a mandatory part of the VA home loan process. The VA does not allow loans on property that has not been appraised by a VA assigned fee appraiser. The buyer pays for the appraisal as part of the cost of getting the home loan. Hope this helps!

  3. Aaron

    Who pays for the VA appraisal if the sale does not close because the property was appraised lower than the sales price and the sellers would not lower the asking price?

    • Joe Wallace

      Hi Aaron--the borrower pays for the VA appraisal unless the seller agrees to pay for it, and your bank may require the appraisal fee to be paid up front. The appraisal fee is paid regardless of the outcome. Home this helps!

  4. Jill

    Hi Joe, We are scheduled to close on 12/2 (60 day close). We are the sellers. A VA appraisal was requested 3 weeks ago. This past Friday, our realtor spoke to the lender. The lender said that the original appraiser was "unresponsive" and made a second request. He told our realtor that another VA appraiser "accepted this assignment" on Friday, and that this individual has 10 business days to come to our home. Is this standard? Is there anything that can be done to speed this process along? Thanks!

    • Joe Wallace

      Hi Jill--these situations do happen from time to time, but once the assignment is issued and accepted, there's nothing the buyer or seller can do to hurry the process. According to the VA rules, " The lender is responsible for providing the appraiser with written confirmation of the assignment. If the appraiser does not receive the written assignment within five days, they must contact VA through one of the email addresses shown on page 1. VA will direct the lender to provide the information or cancel the case. Other reasons for delay or cancellation on the part of the appraiser should be thoroughly explained."

  5. Stephanie Anderson

    So I understand that the borrower must pay for the appraisal. my question is; when is it paid and to whom, for example is it paid up front to the appraiser when he comes to appraise the property, or is is this something that is included in the closing cost that the borrower pays? - Also what is an average cost for this service? Best, Stephanie

    • Joe Wallace

      Hi Stephanie--the appraisal fee cost depends on the market and the type of home loan--you can look at fee tables for your market at http://www.benefits.va.gov/homeloans/fee_timeliness.asp Your lender may require the fee up front or it could be included in closing costs.

  6. Ronald Haddix

    Hi.Ron here, using my VA for a home loan for the first time! My wife and I made an offer on a short sale home in Las Vegas. We were approved quickly by a lender but the sellers bank (who had the mortgage on the short sale) dragged their feet over 4 months, FAR beyond all deadlines and extended contact dates etc.. Our LAST extension expired on Nov 15th and we were told that the offer had gone BACK to re-review and we STILL had no expectations that the offer would be EVER accepted. Long story short, my wife found an REO property and we legally backed out of the short sale (well, we didn't EXTEND again!) Here's the kicker..EARLY in the loan process, BEFORE any offer was accepted, the lender (Cornerstone in this case) ordered a VA appraisal. When my wife informed the loan officer that we would NOT be buying that home and asked "who pays the appraisal"? she was told that it would be "waived"... Now, with this REO, we made an offer, it was accepted and tomorrow we will be in escrow. BUT...thru Bank of America ,who owns the REO and offered a better interest rate. The BofA loan officer expressed surprise when told that the previous lenders had ordered an appraisal BEFORE any offer was accepted. Seems they jumped the gun. Now they (first lender)want US to pay the $350 appraisal fee! That smells rotten. Can they do that, legally? Who can we call to complain? Thanks! Ron,173rd and 82nd AB Ranger, 'Nam.

    • Joe Wallace

      Hi Ron--without knowing the details of the fine print on your contract it would be tough to say whether it's legal per se, but you should definitely call the VA to get guidance on this particular situation--1-800-827-1000.

  7. Adrienne F.

    Hi I am wondering if the first va appraisal requires something to be repaired before closing & that "item" is fixed...who then pays for the second appraisal? Does the buyer have to pay twice?

    • Joe Wallace

      Appraisal fees are paid by the borrower for the appraisal and any follow-up compliance inspection required. These fees are for services, so technically speaking the borrower is not "paying twice" but rather paying for a service rendered each time.

  8. Alice Snedeker

    We are attempting to refinance our home. It is not currently a VA mortgage. The lender ordered the appraisal. Are we obligated to pay for this?

    • Joe Wallace

      Hi Alice, thanks for your question. Yes, the lender is permitted to require an appraisal for a refinance, which the borrower must pay for. Hope this helps!

  9. Ana Lopez

    I heard that for VA if you have a disability for example PTSD you can qualify for a waiver for the appraisal is that true.

    • Joe Wallace

      VA loan rules don't specify any waivers for appraisal costs, but VA loan applicants who receive or are eligible to receive VA compensation for service-related conditions may be entitled to a waiver of the VA loan funding fee.

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