The dreaded VA Appraisal! Yes, that stage of the purchase that makes realtors and sellers cringe. Really, a VA appraisal isn’t that bad when you know what the appraiser is looking for. We have actually written several helpful articles referencing appraisals. One of our most popular articles is “Appraisal requirements to prevent closing delays and extra costs“. Although, today let’s talk specifically about the VA appraisal. So, we thoroughly researched this subject. We polled processors, VA underwriters, and even appraisers. Then we compiled the following list plus explain each in more detail below.
Top 12 VA Appraisal Issues
- Rotten wood around fascia boards, doors, & garage doors
- Loose or missing handrail on steps
- Outbuilding in disrepair or unsafe
- Broken windows or windows that won’t open
- Garage door opener not working
- Garage door safety feature not working
- Exposed wiring
- Water stains on ceiling
- Inaccessible areas of the house such as attic or crawlspace
- Missing stove, HVAC, hot water heater, or other essentials
- Hot water and power turned off
- Peeling paint in or on homes built prior to 1978
VA Clarifies Comparable Sales Distance Requirements 5/19/17
Because of some confusion in this area, VA released a circular to provide clarification for comparable sales of rural or suburban properties. “In suburban or rural communities, the market areas may be greatly expanded and suitable comparable sales may be many miles away from the subject. In such cases, the appraiser should specify why those comparable sales were used and how they compare/compete with the subject. The appraiser should evaluate whether extended distances are normal for this market, submit a description of the market area, and determine whether the comparable sales are within the subject’s market. The appraiser should also indicate whether or not any adjustments were made for locality or proximity. If there are any other recent comparable sales closer to the subject, include a discussion regarding why they were not used. Providing detailed commentary about the market and comparable selection may reduce the number of requests for revisions of appraisals.”
Least Known VA Appraisal Issues
There are some little known and overlooked areas. Most of these are pretty self-explanatory, but let’s expand on these fairly popular yet avoidable issues. First, window issues include broken windows and even possibly broken seals. Also stuck windows are considered a safety concern. You will notice that much of this list is because of safety issues. For instance, most believe a dilapidated outbuilding could just be excluded from the appraised value. But this is a safety concern as someone could easily get hurt.
Appraisers must have full access to the dwelling and any other structures on the property. If the attic or crawl space are not accessible, the appraiser will require a re-inspection. Probably the most complaints stem from garage doors. The doors must open and the safety eye must function. Basically, people must be able to get out of the garage easily. Plus the safety eye protects children from a door closing on them.
Additional Common Issues
Let’s look at other common but avoidable issues. Exposed wiring is an obvious safety hazard, even when on the ceiling. So cap off wires and install outlet covers correctly. Water stains or appearance of a leak must be addressed as well. In these cases, an appraiser will usually condition for an inspection by a qualified professional. Finally, rotten wood is an issue. This is very common where wood is close to the ground. Frequent rotted areas include door frames or thresholds, garage doors, or porch railings. Obvious concerns would be stability of the structure, mold from moisture, or being conducive to termites.
Most Frequent VA Appraisal Issues
Finally, there are the big 4! These are by far, the most popular VA appraisal setbacks we see. Loose or missing handrails are extremely common safety hazard. So go ahead and tighten railings on any steps up-front. Plan on a railing installation if a porch is high.
Then, missing HVAC, hot water heater, or drop in stove are prevalent problems. Homes must have a permanent heat source, access to hot water, and even a stove. Usually only the drop in type is required, but it is up to the appraiser.
Also the 2nd most popular is the easiest to avoid (except foreclosures). Believe it or not, this is the power or hot water is turned off. Just think, the appraiser must make sure the systems in the house meet VA standards, so the power must be on.
Finally, the last and most popular VA appraisal issue! Peeling paint on a home built prior to 1978. Even if it is a little bit on the inside or outside. This is because the paint chips may contain lead paint which can cause issues if children eat it. Therefore, make a thorough inspection for any peeling paint and remedy that prior to inspection
Now, these are not all potential issues. There are things such as curled up floor covering (tripping hazard) or bowed flooring. But we have covered the most popular ones. I’m seeing this as a great real estate agent checklist!
Author: Russell Smith
Team Move OVM Financial loan officer success is Russell’s primary focus. He provides the tools and techniques he used as a top producing loan officer. Additionally he offers the Team Move OVM Financial Agent Training Program. Sharing is so important to Russell so he works diligently to be a resource to loan originators and Realtors.