Challenging VA appraisal regarding remaining economic life

Asked by greisler, 12205 Sat Sep 15, 2012

We are under contract for a home and were planning on using a VA loan. However, while the appraiser found the house to be valued at the purchase price, he found the "remaining economic life" to be only 20 years. After asking him for an explanation for this (which is required under the VA rules), he doesn't seem to understand how to determine REL and is frankly wrong. I know that you can challenge a valuation with comparables, but has anyone challeged an REL determination?

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Victoria Rom…, Agent, Clifton Park, NY
Sun Sep 16, 2012
Hi Greisler,

I'm not sure where you are getting your information on REL and how to determine it, but that is something that is standard to all loans, not just VA loans. The person you should be asking about this is your agent or attorney. REL determination is usually an issue when there are too many major things to update, such as the roof, furnace, hot water heater, etc. The average "life-span" of a house is 65 years, but updating these projects can give a home "new life."

Again, I would be asking your agent or attorney if there is a way to challenge it but that clause is in there to protect the bank. In most cases, the REL needs to be at least 30 years, in order to cover the lifespan of the loan.

Good luck,
~Tori Romeo
NYS Licensed Real Estate Salesperson
Certified Buyer Representative
Bliss Properties of NY
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