Property Inspection Waivers: Worth the risk?If 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 loan application. The PIW program, introduced 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 the change, and what risks are associated? 
How do PIWs work?Essentially, the value of your property is determined by your lender. They determine its value systematically on a computer, using an online database from Fannie Mae instead of hiring a local appraiser to personally inspect the property you're getting ready to buy. So, rather than a firsthand evaluation, lenders rely on computer methods to sort through a pile of previously collected information. Get your appraisal from True South Appraisals, LLC today Get a quote todayWho can get a Property Inspection Waiver?The program's limited right now, but it's including more types of transactions regularly. Your home needs to have records in Fannie Mae's electronic database, so homes that have never been appraised aren't eligible for a PIW. Additionally, you must have an excellent credit score and high assets for approval. Why is a Property Inspection Waiver applied?The waiver cancels out appraisal expenses, and it can considerably pare down closing time for buyers. Outwardly, this process seems like a bargain — but there's a vital point you'll want to recognize. With a PIW, your lender is NOT held liable if the valuation turns out to be wrong. That's a benefit to lenders, but awful for the buyer. What could go wrong if I agree to a Property Inspection Waiver?The information in Fannie Mae's database is pulled from past appraisal reports done by professional appraisers. it might be accurate to some extent, but it won't necessarily be a current evaluation of the exterior and interior quality in a building that's regularly changing. Without a professional valuation of your home, recent improvements and/or damages can absolutely be overlooked by the system. Due to these shortcomings, you can imagine a situation where your property is priced too high by the program assessing it. If that happens, you could run into snags when it's time to sell. You could end up getting far less than you paid, and you'll have no recourse against your lender when the money starts adding up. What is the bottom line?A definitive appraisal usually costs a few hundred dollars, but it can save you a lot more in the future. With a Property Inspection Waiver, there is simply no guarantee that you're receiving an honest valuation of a premium asset. True South Appraisals, LLC can help. Buying or refinancing a house is a big decision with grand consequences. You want to know with certainty that you're getting a fair deal, and working with a licensed appraiser is the safest move you can make. Computers and algorithms have assumed a place in nearly every area of modern life, but when it comes to measuring the value of your property, nothing is more precise than the careful assessment of a licensed professional you trust. |