How a VA Appraisal Cost Us Our Next House and $25K
April 23rd, 2010 by Rich Jacobson
Recently, a Seller entered into contract with a military Buyer who wanted to purchase their house using 100% financing through the VA home loan. The transaction went along smoothly enough, along through the inspection process. Then the Buyer’s lender ordered up the appraisal.
Unfortunately, the VA sent an ‘out-of-state’ appraiser not familiar with their market who used only a 1 mile radius around the subject property for finding comparable properties to determine her valuation. As a result, the home was appraised for almost 20K less than what the Buyer and Seller had agreed upon. In addition, the Buyer had also requested for the Seller to contribute $5K towards closing costs.
Both the Selling Agent and Buyer’s Agent submitted comps within a 2 mile radius of the subject property. The Buyer clients, knowing that the house was competitively priced and would not find anything remotely close in value within their price range, also got involved in writing letters to the VA. Even the bank that was financing the deal agreed that the 1 mile radius imposed by the appraiser was unfair and that the appraisal should be contested. They took the agent’s comps and sent them onto the VA in a Request for Change of Value.
After more than two weeks and numerous errors, i.e., paperwork lost, given to the wrong person, the parties were informed that the Request for Change had been refused. No reason or explanation was provided.
To compound their problems, the Sellers had been waiting for the appraisal results so they could act upon a counter offer for buying another house – a house than they would now lose because other competing offers had come in on the property.
To make matters even worst still, both Buyers and Sellers will now miss their eligibility for the Federal Tax Credits being offered which end on April 30th.
This is yet one more example of the flaws inherent within the VA appraisal process and how people’s lives are impacted negatively as a result.
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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, Everyday CK, and Crabbing in the Hood, or e-mail: kitsapagent@gmail.com
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Tags: bangor subase, Bremerton WA Real Estate, Kitsap County WA real estate, va appraisals, va financing, va home loans
A bad appraisal can really kill a deal. It has happened to me too many times. And your right about the VA appraisers. The ones that I’ve come across have been very difficult to deal with.
What a lot of bad luck with that appraisal. They should never hire someone out of state to do it and it would have made sense for them to re-do the whole inspection from someone local. Of course they still would have been too late to get the $8,000 tax credit and lost their opportunity to purchase another home.
I don’t see many VA loans. The appraisers for both that I’ve recently had have been disasters. The appraisers were both arrogant and ignorant completely dismissing good, local comps to support a home sale. And, when presented with this data, they were defensive, inflexible and – again – wrong. I’ve had homes with legitimate appraisal issues, but nothing like my VA appraisals.