Over the past year we have seen an increase in the number of Sellers who make the sales contract contingent on a particular VA appraiser not being allowed to conduct the appraisal. The VA Regional Office in Atlanta, Georgia has been notified by several lenders of these contingencies and has written a letter outlining the VA’s position.
The letter written by the Assistant Valuation Office for the Loan Guaranty Division stated that “unless there is a conflict of interest present, the case will not be reassigned.” The Valuation Officer went on to say that the ” VA requires appraisers to be assigned on a rotational basis, no picking-and-choosing of appraisers by the lender or Veteran.” Finally, the VA noted that the request has not been honored in the past. So if a Seller had a similar contingency in the contract the Seller was fortunate not to draw the appraiser as the VA did not reassign the appraisal based on the contingency.
Therefore, if the contract is contingent on a particular VA appraiser not being selected and the appraiser is assigned to the property, the contingency will fail and the Seller can terminate the contract. The VA however, will not assign a different appraiser because of the contingency absent a showing of a conflict of interest. If the Seller desires this contingency forewarn them that the contract contingency will fail if the appraiser is assigned.
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Photo by The U.S. Army