Understanding The VA Appraisal
The VA Appraisal Is A Crucial ,Two - Pronged Step In The Homebuying Process
One part of the appraisal reviews the property regarding general health and safety standards, known as the minimum property requirements. The other major piece of the VA appraisal is determining the home's value The VA Appraisal is not a home inspection, nor is there a VA Home inspection
1
Buyer is under Contract, and provides that to the Loan Team
2
The Lender issues the Initial Disclosure package. Borrower signs it.
3
The Lender uploads the contract to the VA portal (Weblgy) and orders the appraisal
4
The VA will assign a VA certified appraiser to loan file at random.
8
The Lender's SAR Underwriter reviews the appraisal report, and issues the Notice of Value (NOV) to the buyer and sends the appraisal simultaneously.
7
VA Appraiser then uploads the report to the VA portal. The Lender is notified.
6
The VA Appraiser will research recently sold (within the last 6 to 12 months) home that are in close proximity and similar instas/configurtion. Then write up the appraisal report.
5
The VA Appraiser will contact the sellers agent to gain access to the subject property, and then make a visual inspection of the Property
5
The VA Appraiser will contact the sellers agent to gain access to the subject property, and then make a visual inspection of the Property
6
The VA Appraiser will research recently sold (within the last 6 to 12 months) home that are in close proximity and similar instas/configurtion. Then write up the appraisal report.
7
VA Appraiser then uploads the report to the VA portal. The Lender is notified.
8
The Lender's SAR Underwriter reviews the appraisal report, and issues the Notice of Value (NOV) to the buyer and sends the appraisal simultaneously.
VA Minimum Property Requirements At A Glance
- Working electric, heating and cooling systems
- Adequate roofing that will last the foreseeable future
- Sufficient in size for basic living necessities
- Clean, continuous water supply with sanitary facilities
- Free of lead-based paint
- Free of wood destroying insects, fungus and dry rot
- Safe and sanitary sewage disposal
- Accessible from an all-weather public or private street
- Attics and crawl spaces must be accessible and properly vented
What Happens If The Appraisal Does Not Come In At Contract ?
Tide Water
The VA's Tidewater process exists to combat low VA appraisals by allowing the appraiser to request additional comps and market data to support the sale price before finalizing the VA appraisal
Tidewater Initial Stage
- Appraiser is unable to determine a value that meets the contract sales amount. At this point the appraisal has not been issued.
- The Appraiser initiates tidewater, and lets then lender know.
- The Lender has 48 hours to provide the appraiser 3 similar comparable (comps) that support the contract price.
- The Lender will inform the borrower, and ask real estate agents to perform a Comparative Market Analysis (CMA) to identify 3 additional comps, that support the contract price.
Tidewater Second Stage
- Received Comps that support the purchase price.
- The Appraiser initiates tidewater, and lets then lender know.
- The Lender has 48 hours to provide the appraiser 3 similar comparable (comps) that support the contract price.
- The Lender will inform the borrower, and ask real estate agents to perform a Comparative Market Analysis (CMA) to identify 3 additional comps, that support the contract price.
Tidewater Final Stage
- Appraiser finalized the report and issues value.
- The Appraiser uploads the report to the VA.
- The lender gets a copy of the appraisal
Reconsideration Of Value (ROV)
The VA recognizes that appraisal mistakes can happen. Value-adding features can be overlooked, or suitable comps may have been left out. Appraisers might have mistakenly calculated square footage or used a comp in the original appraisal that isn't comparable (maybe recent renovations weren't known or factored into the equation). Reasons such as these are why the VA set up the Reconsideration of Value process.
Phase1
- The Lender receives the appraisal back from the Appraiser.
- The "Staff Appraisal (SAR) enters the "Notice of Value" (NOV) into the VA system and that value is at- tached to the Property and the Veteran's SSN for 6 months.
Phase2
- The Veteran must "REQUEST IN WRITING" (or the Lender to initiate "RECONSIDERATION OF VALUE (ROV).
- SAR at Lender sends requested dollar amount for new value to the SAP at the VA who will evaluate.
- SAR at VA returns their opinion of value. The VA SAR can overrule the original appraisal.
