Don't risk your investment with a Property Inspection WaiverIf you are getting a loan for a home, your lender may give you the option to use a Property Inspection Waiver (PIW) on your application. The PIW program, started by Fannie Mae in 2017, allows you to move forward with your mortgage without requiring an appraisal at all. It's a relatively new concept, and some lenders love it. But what determined it, and what are the risks for you? 
How do Property Inspection Waivers work?Essentially, deciding how much your property is worth falls into the hands of your lender. They determine its value systematically on a computer, employing a database from Fannie Mae in lieu of hiring a local appraiser to inspect the property you're getting ready to buy. So, rather than a manual evaluation, lenders rely on computer processes to sort through an array of previously collected data. Get your appraisal from Tri-County Appraisals today Get a quote nowWho is eligible for a Property Inspection Waiver?The program's currently limited, but it's including more types of transactions regularly. Your home needs to have entries in Fannie Mae's electronic database, so homes which have never been appraised are not eligible for a PIW. What's more, you're required to have an excellent credit score and high assets for approval. Why do lenders use it?The waiver removes appraisal expenses, and it can shorten closing time considerably for buyers. At first glance, this process seems like a good deal — but there's a bottom line you will want to consider. With a PIW, your lender is NOT liable if the assessment winds up being wrong. That's great for lenders, but awful for the home buyer. Is there anything that could go wrong?The information in Fannie Mae's database is derived from previous appraisal reports done by professional appraisers. This data might be accurate to a degree, but by definition, it won't be a current assessment of the quality of a building that's constantly changing. Without a professional valuation of your home, new improvements, renovations, or damages could absolutely be omitted by the system. Because of these shortcomings, it's easy to imagine a scenario where your home is priced too high by the program evaluating it. If that happens, you could run into snags when it's time to sell. You may not be able to get what you paid for it, and you'll have no recourse against your lender when the money falls short. What's the bottom line?An accurate, professional appraisal typically costs a few hundred dollars, but it could save you a great deal more in the future. With a Property Inspection Waiver, there's no guarantee you're getting an honest valuation of a premium asset. Tri-County Appraisals can help. Buying or refinancing a property is a big decision with big consequences. You should know with certainty that you're receiving a fair deal, and working with a licensed appraiser is the safest way to go. Computers and algorithms have assumed a place in almost every area of modern life, but when it comes to measuring the value of your property, nothing is more accurate than the careful assessment of a licensed professional you trust. |