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VA and FHA Appraisals
Home appraisal
inspections on FHA and VA loans are a little more detailed than on
conventional loans (and more expensive). The appraisers are required to
perform certain minimum inspections as well as evaluate the market value
of the property. Although these inspections are not as detailed as a
professional home inspection and should not be considered a substitute,
sometimes repairs are required.
These are additional
costs the seller would not be obligated to pay for someone obtaining
conventional financing, so your offer should include a maximum figure for
these repairs. Otherwise the seller is signing the equivalent of a blank
check, and they do not want to do that.
At the same time,
whatever figure you put in will most likely affect the seller’s willingness
to negotiate on price. If you put $500 as an estimate, the seller may be
$500 less negotiable on their price. If no repairs are required, you may
have been able to get the house for $500 less than what you and the
seller agreed on as the price. The solution is to add a clause to your
offer that goes something like this. "If required repairs cost less
than the maximum amount allowed, the excess will be credited toward
buyer’s closing costs."
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