Disputing your VA Appraisal
VA loans depend upon an independent appraisal to determine the current market value. The VA lender orders the appraisal through an appraisal management company who places the order directly with a VA approved appraiser, receives the final appraisal then forwards the completed work to the VA lender that initiated the report. Lenders use the final figure to establish a maximum loan amount. With a VA loan, you can put zero down and even finance your funding fee. Or if you’re refinancing, you can roll your closing costs into the loan, given sufficient equity. But what if there is no equity? Worse, what if the appraisal comes in too low?
It’s really not an uncommon event and in some areas rarely, if ever, happens. In markets where the housing market is still in a free-fall there will be more low appraisals and in a market where homes are selling at or near the asking price, home values will be on the rise. But if your appraisal comes in low, what can you do?
If you’re the buyer of the home and the value comes in too low, you can back out of the transaction due to the low appraisal or make efforts to make a new offer on the property. It’s difficult as a buyer to dispute an appraisal but your real estate agent can help by researching other recent sales in the area to provide the appraiser.
If you’re the owner of the home and you’re selling or refinancing, make sure you prepare the home before the appraiser arrives. Make the house shine, mow the lawn and clean up the overall appearance. Before an appraiser visits a property, the appraiser does some research beforehand regarding recent sales, county tax records and such. Once the appraiser arrives at your home, it’s your job to point out any upgrades or additions you’ve made to the property that won’t show up simply in a public record. If you’ve got an alarm system or fire sprinkler system installed, point those features out. Any small thing that might seem insignificant needs to be pointed out. You really only have one chance, so don’t pull any punches.