The VA appraisal process and the report itself get a bad rap, and they are often misunderstood. A topic we want to clarify is the misunderstanding that the Veterans Administration requested appraisal is a VA home inspection when it is not. First, there’s no such thing as a VA home inspection, and VA does not even require a home inspection. Foremost, a VA appraisal is a report to determine value, but there are other key points addressed in a report including:
- Property condition
- Home amenities
- Neighborhood characteristics
- Dimensions of the home
- Photos of exterior and interior
VA Appraisal is Similar to a Home Inspection
Why do so many think that a VA appraisal is a VA home inspection? Well, the Veterans Administration does require that the property meets the VA Minimum Property Requirements. These standards are not looking for a house guaranteed not to currently or ever have issues. Rather, it is to make reasonably sure that the property is safe, meets living standards, and is in good condition.
Because the VA appraiser is crawling around the home looking at its condition, many think it is a home inspection. Yes, he or she is looking for condition or safety issues, but it is nowhere as detailed as a home inspection. Here are a few common questions from Veteran buyers or real estate agents because of false understandings on this topic:
- When does the VA home inspector go out to the property?
- Who orders the VA home inspection?
- Do I choose the VA home inspector or do you?
- When does VA send out the home inspector
- The VA inspection requires the seller to fix all issues, right?
Each of these questions can pretty much be answered with our article title, and that is a VA appraisal is not a home inspection. VA does not require, order, and rarely even sees a home inspection. So, VA nor the VA lender is involved in the home inspection process. Although, the lender should highly recommend an inspection.
For Your Protection, Get a Home Inspection
Believe it or not, almost no loan transaction requires a home inspection. VA is not different as it does not require a home inspection. To borrow a phrase from FHA, “For your protection, get a home inspection.” That’s right; buyers should hire a professional, licensed, and insured home inspector to comb through the home thoroughly. Although VA appraisers are required to comment on the property’s condition and safety, it is not nearly as thorough as a home inspection.
Do I have to hire a home inspector? Again, a home inspection is normally not required. A buyer may have whomever they choose to look at the home. For instance, it could be a contractor, friend, the buyer, or even none at all. The answer is whatever makes the buyer confident in the home’s condition. The important thing is that buyer understands the current condition and the potential upcoming issues. Usually, the best way to do this is with a qualified inspection professional. Additionally, a buyer should never forego an inspection because of cost. The cost of an inspection is well worth knowing if there are serious issues or not. If a buyer cannot afford a home inspection, then it is probably not a good idea to buy.
Top 12 VA Appraisal Issues
Another of our articles related to VA appraisals provides the top 12 common appraisal issues. Buyers, sellers, or real estate agents are highly recommended to not only check out this list but to read the article that further breaks down the details.
- Rotten wood around fascia boards, doors, & garage doors
- Loose or missing handrail on steps
- Outbuilding in disrepair or unsafe
- Broken windows or windows that won’t open
- Garage door opener not working
- Garage door safety feature not working
- Exposed wiring
- Water stains on the ceiling
- Inaccessible areas of the house such as attic or crawlspace
- Missing stove, HVAC, water heater, or other essentials
- Hot water and power turned off
- Peeling paint in or on homes built before 1978
Read the full article, “12 Things to Check Before Your VA Appraisal.” Another unique feature of VA appraisals is the Tidewater Initiative Process. This is when the appraiser needs more information to complete the VA appraisal and usually has to do with a potentially low value.
VA Appraisal Issues?
What if the appraisal has some issues like the ones mentioned above? What’s even worse is if the seller won’t fix them. Traditional VA loans require an appraisal free from condition or safety issues. So, if the issues are not fixed, then a VA loan is not possible. Unless the buyer uses a VA Renovation Loan. Our VA Renovation Loan will finance these repairs or home improvements.
Hopefully, this has provided a better understanding of the VA appraisal and home inspection. An appraisal is required on VA loans, and a home inspection is not required, but it is highly recommended.