If you're a veteran planning to purchase a home in Spokane using a VA loan, understanding the appraisal process is crucial. This guide will walk you through everything you need to know about VA appraisals, from their mandatory nature to the critical differences between an appraisal and a home inspection.

VA Appraisals are Mandatory

Every home purchased with a VA loan in Spokane requires an appraisal by a VA-certified appraiser. The lender handling your VA loan will schedule the appraisal and notify you when the report is ready.

Dual Purpose of VA Appraisals

Determining Market Value

VA appraisers assess the property's market value using recent sales data and current market trends, ensuring you don’t overpay, and the lender avoids loans that start underwater.

Ensuring MPR Compliance

All homes bought under VA loans must meet the Minimum Property Requirements (MPRs), which guarantee that the properties are safe, structurally sound, and ready for immediate occupancy.

Upfront Appraisal Fees

Typically, appraisal fees, which can be around $800 or more, are expected to be paid upfront in the Spokane market. These fees can often be negotiated during the closing of the sale.

VA Appraisal Timelines

In Spokane, the appraisal is usually completed within 10 business days, although this can vary based on demand and appraiser availability. If repairs are needed, additional time will be required for re-inspection.

Appraisal Validity

For Spokane residents, the VA appraisal remains valid for six months for refinance scenarios, or until the loan closes in the case of purchase loans.

The VA Appraisal vs. Home Inspection

Appraisal Focus

The appraisal verifies that the home meets basic standards for safety and cleanliness but does not ensure the home is without flaws.

Importance of Home Inspection

A detailed home inspection goes beyond the appraisal, providing a comprehensive look at the condition of the home and identifying any potential issues that could require future repairs.

Understanding Tidewater and Reconsideration of Value

Tidewater Initiative

This initiative allows for the submission of additional market data if there's a risk of the appraisal value coming in under the agreed-upon sale price, providing an opportunity to adjust the evaluation before it's finalized.

Reconsideration of Value

Should the appraisal value be unexpectedly low, buyers can initiate a Reconsideration of Value, where further comparable sales data and other relevant information can be presented to argue for a higher appraisal value.

Potential Outcomes of VA Appraisals

MPR Non-Compliance

If the property doesn’t meet the VA’s standards, options include having the seller make repairs, handling repairs yourself, or withdrawing from the purchase.

Appraisal Value Discrepancies

If the appraised value is less than the loan amount, you can ask the seller to reduce the sale price, cover the shortfall yourself, or request a Reconsideration of Value from the VA.

Navigating the VA Appraisal Process in Spokane

With a thorough understanding of the VA’s appraisal criteria and collaboration with experienced real estate professionals, Spokane homebuyers can approach the VA appraisal process with confidence.

Q&A Section

Q1: What is the primary purpose of a VA appraisal?

A1: The main goals are to determine the property’s fair market value and ensure it meets the VA’s safety and readiness standards.

Q2: What is the difference between a VA appraisal and a home inspection?

A2: A VA appraisal assesses whether the home meets basic VA standards, while a home inspection provides a detailed report on the property's overall condition.

Q3: How can Spokane homebuyers navigate a low appraisal value?

A3: Homebuyers can negotiate with the seller, make up the difference themselves, or seek a Reconsideration of Value to potentially adjust the appraised value.