Don't risk your investment with a Property Inspection WaiverIf you're buying or refinancing a home, your lender may give you the option to use a Property Inspection Waiver – or PIW – on your application. The program, initiated by Fannie Mae in 2017, allows you to move forward with your mortgage without 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 PIWs work?Basically, determining what your property is worth falls into the hands of your lender. They determine its value automatically on a computer, using an online database from Fannie Mae rather than hiring a local appraiser to inspect the property you're getting ready to buy. So, rather than a hands-on evaluation, lenders rely entirely on computer methods to sift through a pile of previously collected data. Get your appraisal from Southern Valuation Services, Inc today Get a quote todayWho can get a PIW?The program's currently limited, but it is progressively building to include more transaction types. Your property has to have entries in Fannie Mae's electronic database, so homes which have never been appraised are not eligible for a Property Inspection Waiver. What's more, you must have an excellent credit score and high assets to be approved. Why do lenders use Property Inspection Waivers?The waiver cancels out appraisal expenses, and it can shorten closing time substantially for buyers. On the surface, this simplified process sounds like a bargain — but there's an essential point you will want to recognize. With a PIW, your lender is NOT liable if the assessment turns out to be wrong. That's great for lenders, but presents zero protection to the home buyer. Could anything go wrong?The information in Fannie Mae's database is pulled from past appraisals done by professional appraisers. This data might be accurate to some extent, but it won't necessarily be an up-to-date assessment of the exterior and interior quality in a building that's constantly changing. Without a professional valuation of your home, recent improvements and/or damages could absolutely be missed by the system. Due to these shortcomings, it's easy to imagine an instance where your property is priced too high by the program assessing it. If that happens, you could run into problems when it's time to list it for sale. You could end up getting far less than you paid, 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 thousands in the long run. With a Property Inspection Waiver, there's simply no guarantee you're getting an honest valuation of your most expensive asset. Southern Valuation Services, Inc 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 smartest move you can make. 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 examination of a licensed professional you trust. |