Don't risk your investment with a Property Inspection WaiverIf you are getting a loan for a home, your lender might give you the option to use a Property Inspection Waiver – or PIW – on your application. The program, introduced by Fannie Mae in 2017, allows you to move forward with your mortgage without needing an appraisal. It's a newer concept, and some lenders love it. But what drove it, and what risks are there for you as a home buyer? 
How does a Property Inspection Waiver work?Essentially, the value of your property is established by your lender. They determine the value systematically on a computer, employing a database from Fannie Mae instead of hiring a local appraiser to personally inspect the property you're about to buy. So, rather than a hands-on evaluation, lenders rely entirely on computer methods to sift through a bank of previously collected data. Get your appraisal from RL Carmichael & Assoc, Inc. today Get a quote nowWho can receive a Property Inspection Waiver?The program's limited currently, but it is progressively building to include more types of transactions. Your property has to have records in Fannie Mae's electronic database, so homes that have never been appraised aren't eligible for a Property Inspection Waiver. What's more, you're required to have an excellent credit score and high assets for approval. Why is a Property Inspection Waiver applied?The waiver omits appraisal fees, and it can shorten closing time substantially for buyers. On the surface, this streamlined process seems like a good deal — but there's a bottom line you will want to consider. With a PIW, your lender is NOT held responsible if the assessment winds up being wrong. That's an added bonus for lenders, but presents zero protection to the home buyer whatsoever. What could go wrong if I accept a PIW?The information in Fannie Mae's database is derived from previous appraisal reports done by professional appraisers. This data might be accurate to some extent, but it won't necessarily be a current evaluation of the quality of a building that's regularly changing. Without a professional appraisal of your home, new improvements, renovations, or damages can easily be left out by the system. Due to these deficiencies, you can imagine a situation where your home is priced too high by the system assessing it. If that happens, you could run into snags when it's time to sell. You could wind up getting less than you paid, and you'll have no recourse against your lender when the money starts adding up. What is the bottom line?An accurate appraisal typically costs a few hundred dollars, but it can save you a substantial amount more in the long run. With a Property Inspection Waiver, there is no guarantee that you're receiving an honest valuation of a premium asset. RL Carmichael & Assoc, Inc. can help. Buying or refinancing a property is a big decision with grand consequences. You should know with certainty that you're getting a fair deal, and working with a licensed appraiser is the safest action you can take. Computers and algorithms are in almost every area of modern life, but when it comes to measuring the value of your property, nothing is more precise than the careful examination of a licensed professional you trust. |