Property Inspection Waivers: Are they really worth the risk?If you're getting a loan for a home, your lender might give you the option to use a Property Inspection Waiver (PIW) on your application. The PIW program, started by Fannie Mae in 2017, allows you to move forward with your mortgage without getting an appraisal. It's a newer concept, and some lenders love it. But what motivated it, and what are the risks for you? 
How do Property Inspection Waivers work?Essentially, the value of your property is determined by your lender. They determine its value systematically on a computer, employing an online database from Fannie Mae instead of hiring a local appraiser to inspect the home you're getting ready to buy. So, rather than a firsthand evaluation, lenders rely on computer methods to sift through a pile of previously collected information. Get your appraisal from Premiere Appraisals, LLC today Get a quote todayWho can get a PIW?The program's limited right now, but it is being expanded continually to include more transaction types. Your home needs to have records in Fannie Mae's electronic database, so homes which have never been appraised aren't eligible for a PIW. What's more, you're required to have an excellent credit score and high assets to be approved. Why do lenders use Property Inspection Waivers?The waiver removes appraisal charges, and it can substantially pare down closing time for buyers. Outwardly, this streamlined process sounds like a bargain — but there's a bottom line you'll want to consider. With a PIW, your lender is NOT held liable if the valuation ends up 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 previous appraisal reports completed by professional appraisers. it might be relatively accurate, but it won't necessarily be an up-to-date assessment of the quality of a building that's constantly changing. Without a professional appraisal of your home, new improvements, remodels, or damages could easily be missed by the system. Because of these deficiencies, it's easy to imagine a scenario where your home is priced too high by the computer program assessing it. If that happens, you could run into issues when it's time to put it back on the market. You might not be able to receive what you paid for it, and you'll have no recourse against your lender when the money starts adding up. What's the bottom line?A definitive appraisal usually costs a few hundred dollars, but it could save you thousands in the future. With a PIW, there is simply no guarantee that you're receiving an honest valuation of your most expensive asset. Premiere Appraisals, LLC can help. Buying or refinancing a home is a big decision with big consequences. You need to know without a doubt that you're receiving a fair deal, and working with a licensed appraiser is the smartest way to go. 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 assessment of a licensed professional you trust. |