RESEARCH & LEARN

Guide to VA Appraisals


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TERMINOLOGY

VA appraisals are similar to regular mortgage loan appraisals in that they are designed for the military member’s protection, not to act as a deterrent to the purchase of the home. Since the VA guarantees a portion of a VA mortgage loan, the government requires that an appraisal be performed so that any issues with the property can be addressed before the VA mortgage loan closing date. Before the military member takes final occupancy of their new home, they should thoroughly review the items that the appraisal required to be repaired, in order to make sure the repairs were performed to their satisfaction.

No Accommodation Clause

The VA no accommodation clause is in place so that the home appraiser personally inspects and gives an accurate reporting of the property’s true value, regardless of the appraisal amount as it compares to the actual sales price of the home. For example, if the appraised amount is determined to be $125,000, and the sales price is for $130,000, the appraiser cannot arbitrarily inflate the appraisal amount by $5,000 just to match up with the sales price.

Appraisal Process

In addition to personally appraising the home that the military member wants to buy, the appraiser must also not assign to another person or entity any analysis of properties being used as comparable sales. The appraiser must sign the appraisal report, and certify that all properties investigated were done by them, and not any other party.

If a VA property appraiser cannot view a completed home due to construction being unfinished, this is an allowable exception per the VA’s guidelines. 

There are times when an appraiser will be unable to arrive at an accurate appraisal price, causing them the need to consult with another professional source in order to determine the final value of the property. The Department of Veterans Affairs requires the appraiser to disclose the name of the professional who helped them derive the appraised value, as well as everything this professional checked to help finalize the home’s true valuation.

VA assigned appraisers must include a map of the area in their appraisal report, a sketch of the building’s perimeter, and photos of the property or the lot where the home is going to be constructed. 

Repairs on the Home

The Department of Veterans Affairs requires a list of all repairs that need to be completed on the property in order to meet VA regulations be included in the appraisal report. Also, any items that the military member wants to be repaired or installed should be included in the final report.

These repairs can be anything from water damage to cracked or broken windows, whatever needs to be fixed to ensure an accurate appraised value. The appraisal must also include anything that the appraiser requires to be inspected. This could be termite damage, faulty wiring, or anything the appraiser needs in order to arrive at an accurate appraised value.