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Need help with VA financing adjustment

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Ahcandy

Thread Starter
Freshman Member
Joined
Oct 30, 2007
Professional Status
Certified Residential Appraiser
State
Tennessee
Hello--I need help! All my sales have conventional financing and one sale was a VA loan. The terms are not available to me, however, this sale is sitting at the high end of the range and this is not accounted for through any of its features. Is an adjustment necessary for VA financing versus conventional and how would you do it if you did not know the terms of any of the sales?

Thank you!
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
VA financing would not typically require an adjustment. Its merely another means of an owner being paid cash at closing just using a different intstrument.
Compare your sales one against the other and see if there is a difference. I will bet your analysis shows nothing to adjust for.
 

Zmcraney

Junior Member
Joined
Oct 17, 2007
Professional Status
Licensed Appraiser
State
Mississippi
VA financing would not typically require an adjustment. Its merely another means of an owner being paid cash at closing just using a different intstrument.

Ditto what the red man says. VA is in my opinion just another form of a guarantee much like FHA, Rural Development, and the likes. Each program has their own system of delegating who has to pay for what. If you call your state VA office they would probably be more than happy to send you over a guidline for closing expenses.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
In some areas of the country where VA loans are quite rare, some appraisers have adjusted the VA funding fee as a concession because it is paid by the seller. Discount points are often handled this way too. Since MY MARKET is highly impacted by the military (5 active installations) we see lots of VA loans. There does not appear to be any recognizable differences by the market for VA, FHA, or conventional financing.
 

Charles Witt

Senior Member
Joined
Dec 13, 2002
Professional Status
Certified Residential Appraiser
State
Delaware
Verify the comps with the agents involved and you will probably find concessions! CASH equivalency remember.......:icon_idea:
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Verify the comps with the agents involved and you will probably find concessions! CASH equivalency remember.......:icon_idea:

That right, be sure to reduce every sale dollar for dollar...even if the Definition of Market Value says exactly the opposite!
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Verify the comps with the agents involved and you will probably find concessions! CASH equivalency remember.......:icon_idea:


Looking for something that isnt there is not sound advice. The question was about VA financing ... nothing more. I trust the ability of the poster to recognize concessions. Concessions and differing institutional financing are quite different things. I trust you also know this and your post was just poorly worded.
 

Charles Witt

Senior Member
Joined
Dec 13, 2002
Professional Status
Certified Residential Appraiser
State
Delaware
PropertyEconomics: You are correct. I do. But I got the sense that the comps were not verified, other than looking in the MLS. About half of the MLS info in my area is somewhat erroneous or lacking full information regarding closing.
 

Jim Onderisin

Senior Member
Joined
Sep 15, 2003
Professional Status
Certified Residential Appraiser
State
Illinois
VA loans are low down payment. Low down loans can make buyers willing to pay more because buyers focus on initial out-of-pocket and monthly costs, not total price. An unknowing or uncaring appraiser might accomodate a higher-than-market agreed price. But a VA appraiser is generally more experienced and is more likely to put the kabosh on above-market agreed prices. For that reason, it is likely no concession adjustments are required.
 
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