VA Home Inspection vs. VA Appraisals

Home inspections involve having a professional assess the condition of a property in a comprehensive way. This means checking out hundreds of elements of a home, including the foundation, flooring, windows, appliances, and more. Professional home inspectors are trained to look for issues that could affect not only the value of the home but also the buyer’s experience with living in the property.

Home inspections are smart to have for any real estate transaction. After all, buyers should understand what they are buying, especially for such a large purchase! Based on the information provided by the home inspector, the buyer may choose to renegotiate an offer. For example, the seller may need to agree to fix a leaky roof before the buyer is willing to move forward.

Although home inspections are in the best interests of most buyers, they are not required by the VA. The term “VA home inspection” can be misleading because hiring a comprehensive home inspection is unrelated to the VA. However, the VA does need to take a look at the property before giving the green light on a loan. This is where the VA appraisal comes in.

VA Appraisals

Unlike home inspections, VA appraisals are required to get a VA home loan. One of the main purposes of the appraisal is to ensure that the home meets the minimum property requirements set forth by the VA. These requirements include adequate heating, roofing, and plumbing. In addition, the VA will not approve a loan on a property that is damaged from wood-destroying insects, dry rot, or mold, until these issues are addressed.

The appraisal also allows the VA to establish what the current market value of a property is. This number – not the sales price – is used to determine what the maximum loan amount will be. In order to protect their Veteran borrowers from paying more than the property is worth, the VA wants an accurate assessment of the value of the property. The VA also wants to ensure that it is free of major defects. The lender’s Staff Appraiser will then perform an additional review, known as a SAR. When satisfied with the appraiser’s work, the staff appraiser will then issue a Notice of Value (NOV), which is a necessary part of the VA loan process.

Both the home inspection and VA appraisal are used to make sure a property is in acceptable shape, but one is for the buyer’s sake and the other is for the lender’s. Although the VA appraisal is more extensive than the appraisals required for conventional loans, a comprehensive home inspection goes even deeper. Have more questions about the VA loan process? Speak with a VA loan expert today at 949-268-7742!

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