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.