How are VA appraisals in this market? Are we getting fair values?

In recent transactions, if have noticed that the VA appraisals are SUPER CONSERVATIVE! So conservative, that it suspicious that the VA wants to have any loans out there. With the bank crisis, one can understand that the VA is very nervous to grab new loans, especially with the amount of foreclosures.

With a VA loan, the buyer puts down $0 money, which leaves the bank totally liable for the full amount lent if the borrower defaults. So the VA wants to make sure that the property being purchased is worth at least or more than the sales price. In order to do this, the appraiser assigned/hired by the VA takes into account all recent sales for like properties. Usually the properties are within the same subdivision are of like-kind, similar age and have sold within the last few months. If similar properties have not sold recently, then the appraiser will expand the range up to 2 miles or so. I have recently seen the appraisers use under contract properties and also foreclosures. These values are very challenging especially when the appraiser does not have the opportunity to see the foreclosures personally. And these foreclosures are in horrible shape!

So how do you get a fair chance as a seller.......to make sure the appraiser gives you a fair value? Ask your realtor to run the comparables (recent sales) and have them available for the appraiser to pick up during his/her visit to the property. It is not permitted for the realtor to seek out the appraiser....the VA fears that there is collusion or some kind of funny business for the realtor pursuade or influence the VA appraiser. So I recommend a list of comparables left for the appraiser to pick up and VERY IMPORTANTLY, have a list of improvements and their estimates made TO YOUR PROPERTY. At times, the appraiser will appreciate this information and take this into account......afterall, you are trying to make his job easier.......which is to JUSTIFY THE VALUE HE OBTAINS IN HIS ANALYSIS. Believe it or not, the appraiser is not there to put a kabash on the deal, even though it may seem like it.

If you get a low VA appraiser, ask your realtor for help. And also ask the VA to review the appraisal. It can be very challenging since the appraiser gets paid about $300-$400, so it's tough for them to review their work and admit to a mistake. But what's right is right, and hopefully you will get a fair market value.