When purchasing a home, there are all sorts of fees, such as the VA appraisal, you should factor into your budget. There are special requirements the property must meet for VA loans before the lender approves the loan.
One essential upfront expense that VA loan borrowers need to know about is the VA appraisal. But what is it, how much is the VA appraisal, and who pays for it?
The short answer is no. Despite the Department of Veterans Affairs requiring the appraisal, they are not responsible for paying the VA appraisal fee.
The lender orders the appraisal, which is conducted by an independent appraiser, but they’re also not responsible for the fee.
That leaves the home appraisal cost up to you, the buyer. However, there are some non-allowable expenses that you can avoid, which will be covered below.
The buyer is typically responsible for paying the appraisal fee along with other closing costs unless the seller agrees to pay it. If you’re purchasing a home with a VA loan, you should factor in the appraisal cost and all other closing costs, so they don’t catch you by surprise.
VA appraisal fees differ depending on which state you’re purchasing the home in, and whether or not the area is considered high-demand. VA appraisal fees can range significantly, depending on where in the country you’re buying. Check the VA’s website to see the current VA appraisal fees in your area.
In most cases, you will need to pay the VA appraisal fee upfront. However, the cost can be recouped at closing if that was negotiated to be paid by the seller.
Technically, yes. However, the VA appraisal fee is typically paid for by the buyer. However, in some cases, you can negotiate with the seller to pay for it as part of a package of seller concessions.
There is no waiving of the VA appraisal on a VA loan. This is because for the Department of Veterans Affairs to back the loan the property must meet the minimum property requirements. In other words, the appraisal is a non-negotiable step that anyone who takes out a VA loan has to be prepared for.
However, you can get a minimum property requirements waiver in certain cases. The MPR waiver is issued on a case-by-case basis. You may be able to get the Department of Veterans Affairs to waive some requirements if:
At the end of the day, this is a decision made by the VA.
Closing costs are a reality for most people taking out a mortgage to buy a home. However, one of the biggest advantages of VA loans is the limit on how much Veterans and military members have to pay in closing costs.
There are some costs you should not have to pay for.
For instance, you can't be required to pay for appraisals requested by a third party. You and your lender may request an appraisal, but if the seller or any other third party wants an appraisal it would have to be paid for by the person or company making the request.
This includes situations where the lender or the seller wants a reconsideration of value (ROV). It's perfectly acceptable under VA rules if you want to request, and agree to pay for, a new appraisal. But you should not be charged if the lender or seller wants this work done.
While paying for a VA appraisal may seem like an inconvenient expense, it’s a necessary part of the VA homebuying process. While the appraisal fee is usually due after it’s completed, that doesn’t mean you can still negotiate with the seller to cover the cost.