Buying a Home with a VA Loan: The Appraisal Process

If you’re buying a home with a VA loan, part of the approval process involves getting your future home appraised. The appraisal reports the current market value of the house you’re looking to buy. Before you get started, let’s take a look at the appraisal process so that you know what to expect.

Home Valuations

The appraised value of the home you’re planning to buy needs to be at least the same as the sale price. The appraiser finds the home’s value by comparing the recent sales prices of similar homes in your area. If the home’s value is appraised lower than the price you agreed to buy the house for. In that case, you can try to negotiate a lower price or walk from the purchase altogether.

Property Requirements for Buying a Home with a VA Loan

A VA appraisal includes protections that other appraisals don’t have, called Minimum Property Requirements, or MPRs. These requirements help ensure that the property meets specific standards before being eligible for buying a home with a VA loan. For one thing, the property needs to be habitable. To meet the requirements, you must be able to move in immediately and have running water, electricity, and other essentials already in place.

The appraiser completes the MPR form and includes it along with the appraisal report. Typically, sellers will cover the costs of any necessary repairs for the loan to be approved.

Appraisals Are Mandatory

When buying a home with a VA loan, you’ll have a lot of choices to make. However, you can’t choose to opt-out of the VA appraisal process. Every VA loan requires an appraisal for it to be approved. The evaluation also must be done by a VA-certified appraiser. Your VA lender can request and schedule the inspection for you and inform you once it goes through.

Appraisal Fees

You will usually need to pay the appraisal fee upfront. That fee can vary by state and the type of home you want to buy. Planning for $500 or more should be enough in most cases. You can also try to recoup this fee at closing as part of your negotiation with the seller.