What do you do when the VA appraisal comes in low? I spoke with someone at the VARO and was told that the appraiser basically did not complete the job. She initially under valued by 50K then the realtor gave her some more comps and she came up to 25K below; she did not attach any of the docs to the appraisal. I then paid for another appraisal and it came in right on the sales price. The appraiser and the VRO looked at this and came up another 15K, still 10K below sales price...what now?

Same situation as if it were a conventional appraisal. Based on what you have said here the purchase price is not supported by the appraised value. You were able to show some other sales that the appraiser may not have considered initially to support increasing the value. Clearly, the appraiser could have done a better job on the front end with researching comps. Finding another appraiser to bring it in at the purchase price means nothing. There are appraisers everywhere that will give nearly any value that is needed to get a loan done. Having VA choose the appraiser is one of the safety nets that helps protect the veteran from paying too much for a house. It is unique that you were able to get the value increased as much as you did.

Paul
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Apparently this is a nationwide problem with the VA, if you troll the internet there are many articles about this. My larger concern is that there are many vets returning with closed head injurys who may not have the ability to navigate the buracracy involved with an initial low apprasal; and may be able obtain other financing. I think we failing our vet in many ways that are kept hidden from the media.

I disagree. I think the nationwide problem is centered on greed. I am sure everyone selling a house would love to sell it for more than it is worth at someone else's expense. VA has a system in place that helps to prevent that from happening.

As far as the appraisal itself goes, there is no difference in a VA appraisal and a conventional with the exception that VA doesn't require the cost approach to be completed. Secondly, a "VA Appraiser" is simply a licensed appraiser that has signed up to do VA appraisals.

With the value being lower than the sales price you have 3 options. The seller can lower the price to the appraised value. The buyer can walk away with their earnest money, or the buyer can get a second mortgage for the difference.

Paul
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We are waiting on our VA appraisal now! I am a nervous wreck! I feel our house is worth more than the asking price, but I'm no appraiser. How long does it usually take?

They are given one week to upload the appraisal to VA. In some areas where VA loans are not common the appraiser may take more time because the penalty for late delivery really doesn't affect them much.

Paul
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quote:

Originally posted by MortgageGuru:
I disagree. I think the nationwide problem is centered on greed. I am sure everyone selling a house would love to sell it for more than it is worth at someone else's expense. VA has a system in place that helps to prevent that from happening.

As far as the appraisal itself goes, there is no difference in a VA appraisal and a conventional with the exception that VA doesn't require the cost approach to be completed. Secondly, a "VA Appraiser" is simply a licensed appraiser that has signed up to do VA appraisals.

With the value being lower than the sales price you have 3 options. The seller can lower the price to the appraised value. The buyer can walk away with their earnest money, or the buyer can get a second mortgage for the difference.

Paul
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I really am amazed by all your knowledge about this, but from my own experiences I can tell you that what you say is not always true. Especially nowadays it seems like VA appraisals are coming in lower and lower for some reason. We bought a house 1 1/2 years ago and it was appraised by VA for 5.000 over the price we paid. Now - 1 1/2 years later, we had it appraised again for selling purposes and the VA appraisal came in 10.000 under the asking price, which was the same we paid. Now technically, VA figured the value of our house had decreased 15.000 within 1 1/2 years...kind of strange...also this time they took things into consideration that had nothing to do with the house itself (like a watertower that is located opposite the house and was there when the first appraisal took place also).

A little after that we had a conventional appraiser do the appraisal and it came in above asking price. You might be right that conventional appraisers do alot to get a loan done, but a 15.000 difference ??? This doesn't sound right to me at all.

Paul, I am in the process of buying a condo with an approved VA Loan and the LLC Realty Company is now telling me that I will have to pay for the appraisal but I thought VA is suppose to pay for the appraisal and I pay for the inspection. Please respond as soon as you can.

My reading of the rules is that the appraisal is paid for as part of the closing cost by you. I think you have to make sure that this is the VA appraisal that is normally part of the closing costs.

You can confirm that by calling the VA. Here is the fact sheet page, the phone number is on the bottom.
http://www.homeloans.va.gov/factsheet.htm

VA appraisals can not be paid for by the borrower directly to the appraiser prior to closing. It is a closing cost that will be collected for at closing.

Paul
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Thanks, Paul.

quote:

Originally posted by MortgageGuru:
As far as the appraisal itself goes, there is no difference in a VA appraisal and a conventional with the exception that VA doesn't require the cost approach to be completed. Secondly, a "VA Appraiser" is simply a licensed appraiser that has signed up to do VA appraisals.

I would have to disagree with that somewhat. We were trying to go with a VA loan and had a VA appraisal done but after being initially approved for the VA we were later denied due to a mistake by the VA. We decided to save ourselves grief and switched to a conventional loan. Fannie Mae would not accept the VA appraisal and required us to have another appraisal done.

Sorry av8bjockey but you were lied to. VA doesn't accept or reject appraisals at all on the front end. If there were any major structural issues with the house that an appraiser noted then it would be dealt with but it sounds like you were told you could do a VA loan, were quoted one, and then the broker resold you a loan that he could do to close a deal. Fact of the matter is that he probably wasn't licensed to do VA loans, he had a qualified homebuyer and sold you the loan he could do to make the sale instead of saying he didn't do VA loans and sending you somewhere else.

If everyone got the loan at the best terms they qualified for then there would not be a sub-prime mortgage meltdown in the country right now.

Paul
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quote:

Originally posted by MortgageGuru:
Sorry av8bjockey but you were lied to. VA doesn't accept or reject appraisals at all on the front end. If there were any major structural issues with the house that an appraiser noted then it would be dealt with but it sounds like you were told you could do a VA loan, were quoted one, and then the broker resold you a loan that he could do to close a deal. Fact of the matter is that he probably wasn't licensed to do VA loans, he had a qualified homebuyer and sold you the loan he could do to make the sale instead of saying he didn't do VA loans and sending you somewhere else.

If everyone got the loan at the best terms they qualified for then there would not be a sub-prime mortgage meltdown in the country right now.

Paul
See my profile for contact information

You must have misread my post I guess. The VA didn't reject the appraisal. I started out applying for a VA loan and the VA initially approved me for the loan I wanted. They ordered the appraisal and that was completed. The VA then realized they made a mistake in calculating my residual income and decided to deny me the loan they had approved me for. The lender (Coldwell Banker) claims to do the most VA loans of any other lender and has VA underwriters in house. The lender then offered me a comparable conventional loan but said Fannie Mae would not accept the appraisal that was done for the VA loan.

Ok. That makes more sense.

Paul
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quote:

Originally posted by av8bjockey:

quote:

Originally posted by MortgageGuru:
Sorry av8bjockey but you were lied to. VA doesn't accept or reject appraisals at all on the front end. If there were any major structural issues with the house that an appraiser noted then it would be dealt with but it sounds like you were told you could do a VA loan, were quoted one, and then the broker resold you a loan that he could do to close a deal. Fact of the matter is that he probably wasn't licensed to do VA loans, he had a qualified homebuyer and sold you the loan he could do to make the sale instead of saying he didn't do VA loans and sending you somewhere else.

If everyone got the loan at the best terms they qualified for then there would not be a sub-prime mortgage meltdown in the country right now.

Paul
See my profile for contact information

You must have misread my post I guess. The VA didn't reject the appraisal. I started out applying for a VA loan and the VA initially approved me for the loan I wanted. They ordered the appraisal and that was completed. The VA then realized they made a mistake in calculating my residual income and decided to deny me the loan they had approved me for. The lender (Coldwell Banker) claims to do the most VA loans of any other lender and has VA underwriters in house. The lender then offered me a comparable conventional loan but said Fannie Mae would not accept the appraisal that was done for the VA loan.

Thank you for clearing that up for me too. I was beginning to get a little confused at this point about VA appraisals.

An appraisal is an appraisal. If the appraiser is certified for the VA it should be OK for FHA, Fannie and Freddie. Now sometimes they may want a more recent appraisal.

Appraisals are good for 6 months.

Paul
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