Property Inspection Waivers: Are they really worth the risk?If you're buying or refinancing a home, your lender may give you the option to use a Property Inspection Waiver – or PIW – on your loan application. The program, initiated by Fannie Mae in 2017, allows you to move forward with your mortgage without needing an appraisal at all. It's a newer concept, and some lenders love it. But what prompted it, and what risks are associated? 
How do PIWs work?Essentially, your lender establishes what your property is worth. They determine its value automatically on a computer, employing a database from Fannie Mae rather than hiring a local appraiser to personally inspect the property you're getting ready to buy. So, rather than a firsthand evaluation, lenders rely solely on computer methods to sort through an array of previously collected information. Get your appraisal from Professional Appraisals, Inc. today Get a quote todayWho's qualified for a Property Inspection Waiver?The program is limited currently, but it is including more types of transactions continuously. Your property needs to have entries in Fannie Mae's electronic database, so homes which have never been appraised aren't eligible for a Property Inspection Waiver. Additionally, you must have an excellent credit score and high assets to be approved. Why is a PIW used?The waiver eliminates appraisal fees, and it can shorten closing time substantially for buyers. At first glance, this simplified process sounds like a bargain — but there's a bottom line you'll want to recognize. With a PIW, your lender is NOT held responsible if the valuation is wrong. That's a benefit to lenders, but awful for the buyer. Could anything go wrong?The information in Fannie Mae's database is pulled from past appraisal reports completed by professional appraisers. it might be accurate to some extent, but by definition, it will not be a current assessment of the exterior and interior quality in a building that changes from year to year. Without a professional valuation of your home, recent improvements, renovations, or damages could absolutely be left out by the system. Due to these deficiencies, you can imagine an instance where your property is priced too high by the program evaluating it. If that happens, you could run into snags when it's time to put it back on the market. You may not be able to receive what you paid for it, and you'll have no recourse against your lender when the money falls short. 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's simply no guarantee you're receiving an honest valuation of a premium asset. Professional Appraisals, Inc. can help. Buying or refinancing a property is a big decision with grand consequences. You need to 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 accurate than the careful examination of a licensed professional you trust. |