VA loan questions (appraisal)

Factual Questions
1

We’re in the midst of the home-buying process for a property we currently rent and have our appraisal tomorrow morning. I gather that the appraiser gave our realtor a preliminary figure based on checking other homes in our area, but this figure is substantially lower than the amount we are hoping to get.

I’ve read there is a reconsideration of value process, so I’ve been checking recent home sales in our area in case we need to go this route.

The major issue I’ve found is that there are not a lot of homes structurally similar to ours that have been sold recently–we have no basement while most homes in our area have them. My main question is whether the reconsideration of value process allows us to compare the property to the assessed value of similar properties, rather than the sale price.

For example, our next-door neighbor’s property is very similar to ours (no basement and the same basic floor plan) and their property assessment is $20,000 over the figure we’re hoping to see. We actually have an addition that adds an extra bedroom and bathroom onto our property.

Also, does anyone know what major factors play into the appraisal? I figure number of bedrooms, bathrooms, recent improvements, school district, etc. are part of this. What about lot size? Anything else?

2

Everything you named, and then some.

Basically, the appraiser checks out the house, then goes into the MLS and finds comparable sales within a recent time frame. The criteria are laid out in a table, and he adds or subtracts to the values based on the market value of the improvement. So, it may say, on the line for "“basement” by your house “-2,000” or whatever the market value is for a basement.

I will also add that, in most if not all municipalities, the Assessor’s valuation of a home has no relationship to reality. Your home is worth only what someone is willing to pay for it.

Take these questions to your Realtor. Not the one who’s representing the seller, but the one representing you. That is literally what they are for.

3

I’m not sure why the Realtor is involved here, unless it is to set the price you are going to pay. The appraisal is for the lender to determine how much they will lend you to buy the property. If you agree to buy for 250k and the appraiser says it should go around 150k, they won’t lend you 200k to buy it. It allows them to set a max value of your mortgage. If you default, they want to get their money back by selling the property.