THE VA APPRAISAL AND HOME INSPECTION

Home Ownership | House hunting | 8 min

Summary:

Home inspections and the VA appraisal are two important parts of the home buying process. But don’t confuse the two – they aren’t the same. In fact, while they may seem similar, there are actually several key differences. We wanted to break these differences down for you in a simple, easy to understand fashion.

VA Appraisal

Home Inspection

1.) Are they required?

Yes. The VA  Appraisal is a mandatory part of the VA Home Loan process.

No. A home inspection is an elective part of the homebuying process- although we generally do not recommend skipping a home inspection.

2.) What are they?

The appraisal takes a general look at the safety and value of the home. Homes must pass the VA appraisal as a condition of the VA Home Loan. This also helps determine your loan amount as your lender cannot approve a loan value over the appraisal amount for any given property. For a more in-depth look, check out our article “What is the VA Appraisal?“.

A home inspection is a more thorough evaluation of the quality and condition of the home and its many parts.

3.) Who orders them?

Generally, your lender will order a VA appraisal once the home is under contract. 

As the buyer, it is your responsibility to schedule your home inspection. It is usually worth your time to ask your realtor for suggestions on a good home inspector- they’ve likely worked with several in the past and can help give you good recommendations. 

4.) What do they look for?

The VA appraisal looks for two specific things. First, it provides a fair value of the home. Second, it ensures that the home is in a safe, stable condition. The appraisal makes sure the home is safe by validating each of the VA’s Minimum Property Requirements (MPRs). The VA appraisal must pass all the MPRs to be eligible for a VA Home Loan. If the property is a condominium, the VA appraisal also ensures that the condo is in a VA-approved complex.

Home inspectors will take a more thorough look at the skeleton of the home. This includes HVAC, plumbing, electrical, attics, foundation, basement, and more.

5.) How much do they cost?

The VA appraisal follows a fee schedule that is dependent on the county you live in and the type of property being appraised. The lowest fees are around $425 (single family homes in South Carolina) and the highest are around $1200 (multi-family homes in Hawaii, Guam, Saipan, and some Colorado counties). On average, you can expect to pay around $500 for a VA appraisal on a single family home.

Typically, home inspections will cost between $279 and $399. This will vary depending on where you live and the size of the home. Choosing the cheapest inspector isn’t always the best decision- things like licensing, qualifications, and experience should all influence your decision in selecting a home inspector.

6.) What does the process look like?

Once the home is under contract, your lender should order the appraisal. The VA will send an appraiser of their choice, ensuring a neutral third party is appraising the home. There is a chance that the VA appraisal could fail- either the home appraises at a value lower than the listing price, or the property does not meet all of the MPRs. There are several options in each situation- so don’t start waiving the white flag yet. The VA sets limits (based on county or state) on how long the appraiser has to return the results of the appraisal.

Technically, the inspection can take place before an offer is even made, but in a more competitive market that doesn’t happen often. Generally, the inspection happens once the property is under contract. It’s not uncommon for a clause to exist in the contract that allows the buyer to back out should a home inspection expose underlying issues with the property.

Conclusion

While the two might sound similar- there are actually quite a few differences between the VA appraisal and a standard home inspection. The VA appraisal is definitely not a replacement for a home inspection. At Veteransloans.com, we’re happy to answer any questions you might have about any stage of your loan and keep you informed every step of the way. To get in touch with us and make sure you’re eligible, give us a call at 1-888-232-1428 or visit https://www.veteransloans.com/prequalify.