Curse of the VA Appraisal – Just in time for Halloween!
October 29th, 2009 by Rich Jacobson
It’s like a bad dream, a horrible nightmare, or worse, another mindless installment of ‘Saw’ or ‘Friday the 13th!’
Another one of my transactions has fallen prey to the ‘Curse of the VA Appraisal!’….
What began as a seemingly normal and relatively smooth contract between my Sellers (a beautiful ranch-style home on acreage in Lofall/Poulsbo WA) and some wonderful Buyers, has suddenly spiraled into the deepest, darkest recesses of VA hell – a place where common sense, fairness, and consistency cease to exist, and the massive wheels of government bureaucracy inch along painfully slow, impervious to any outside reason or influence.
I’ve been down this road before, unfortunately. Such is the risky Russian roulette of VA financing. It’s a Luck of the Draw, a crap shoot. It’s Forest Gump’s Box of Chocolates – “Ya never know what yer gonna get!”
You have enough VA transactions and you just figure your number will eventually get called up.
Whenever I take on a new listing, I usually talk to the Sellers about offering the property for purchase to VA Buyers. In our market (Kitsap County WA) you run the risk of missing out on a large segment of potential Buyers if you don’t offer it for VA financing. However, there are certain times when it’s not advisable to market a given home to VA Buyers.
With my last listing, it was a no brainer. The home was fairly new – built in 2000. It had been well-maintained, and the new 35-yr. composition roof was only a year old. The only questionable feature was the rear deck. It didn’t have any railings or handrails. But based on my previous experience with similar situations, the VA Appraisers always used the WA State Building Codes to determine an acceptable height limit before railing needed to be installed. If the deck was more than 30 inches above the ground, then the deck was required to have railings around the perimeter and handrails on each side of the steps. The highest point of my Sellers deck from ground level was 24 inches, so I figured the deck would pass the VA appraisal.
The VA appraisal was conducted, we came in at value and with NO conditions! Yippee! Hooray!
Or so we thought!….
A few days before we are scheduled to close, the Buyers Lender calls and says that the VA Regional Office in Denver has reviewed the appraisal, and based on pictures of the deck, has determined that it’s a safety/health hazard, and is requiring railings and handrails to be installed prior to closing. The VA Appraiser was asked to amend the appraisal and specify the railings as a condition for financing.
Somewhere in a big office building in Denver, a VA bureaucrat is attempting to justify their salary and decides to conjure up some mystical number of 18 inches. Where did this number come from? Do they have a dartboard in the break-room? Do they yell over to the person in the adjoining cubicle and say “Pick a number between one and 30?” No ones knows. We’re the frickin’ VA, dammit! You want the loan? Then install the railing, period!
Never-mind that the Buyers would much rather install the railings themselves, after the sale goes through. They have a particular style/design they want to use to make it their own.
Never-mind that my Sellers are going to install the very minimum required to pass, and it will most likely be removed by the Buyers once they occupy the house.
So there’s my scary story for this Halloween season. Maybe for Christmas, Santa will bring me a nice smooth VA transaction?…
UPDATE: Just as an update. I received this email today from the Buyer’s Lender, re-stating VA’s position on this issue:
“Yes, I spoke to our underwriting manager and she said since the SAR (staff appraisal reviewer) ruled that the deck needed a rail in order to be in compliance with VA guidelines regarding Safe, Sound, and Sanitary conditions. I also spoke to the VA office in Denver and the gentleman I spoke with gave me pretty much the same answer. (except not so kind) I also asked both parties if this was documented anywhere and they said the section of the handbook addressing the Safe, Sound and Sanitary conditions would cover this issue.“
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Rich Jacobson is a licensed real estate professional providing knowledgeable empowerment and relentless representation for his clients of residential properties and vacant land throughout all of Kitsap County WA and portions of Pierce, Mason, and Jefferson Counties. You can also find him at KitsapLife.com, ActiveRain, and Crabbing in the Hood, or e-mail: kitsapagent@gmail.com
Tags: Kitsap County WA real estate, va appraisals, va appraisers, va buyers, va financing, va loans
Melanie: Thanks for stopping by and commenting. I think consistency is what is really needed. I don’t think it’s necessarily the appraisers fault. They aren’t given a lot of guidance in the process. In this instance, the appraiser was actually required to go back and amend their appraisal. Why have them in the field in the first place if someone stuck in a cubicle in Denver is going to call the shots?
I’m so glad to hear (as a mortgage lender) that it’s not only my transactions that have this kind of thing happen. It really is too bad there’s not more accountability from the beaurocrats (VA or otherwise) so that we can have some consistency and predictability in these trying times!
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