Deciphering the VA Lender’s Handbook Chapter 13 Part 4
Once you receive the finalized, reviewed appraisal report, you might notice an addition made to the original report which is the SAR Certification. The SAR (Staff Appraisal Reviewer) is an employee of the lender which reviews appraisals to make sure they are accurate and reasonable. Now, an SAR will only review the appraisal report if the lender is a member of the Lender Appraisal Processing Program (LAPP). Otherwise, the appraisal review will be conducted by the VA. For you as the borrower, if an SAR is reviewing the appraisal it will probably be done faster and you’ll be kept more in the loop than if the VA is reviewing it. However, to understand the SAR certification we need to understand the SAR’s role and what he or she can and cannot do.
SARs are not appraisers, and they do not have the authority to alter, adjust, or comment on the appraisal report itself. The SAR is not acting as a ‘cosigner’ or a ‘supervisory appraiser’, and are reviewing the appraisal simple as a matter of verifying that it is accurate. According to the Handbook, the SAR must do the following:
- circle the fee appraiser’s market value estimate
- sign and date any SAR comments or other documentation relative to the appraisal review and attach that material to the appraisal report, and
- complete the SAR certification
In other words, any comments or concerns the SAR has, they must go on a separate document and be signed and dated accordingly. If the SAR has concerns, they go through the steps discussed in the previous article to get them resolved. Otherwise, they move on to complete their certification, which is what you might see on the final appraisal report if your lender is a LAPP lender. The certification will either be stamped on the appraisal report in the “cost approach” or “reconciliation” block, or be attached as a separate sheet. The VA has a specific certification statement that the SAR must use. It is pasted below:
“I reviewed this appraisal report to determine the acceptability of the property for VA Loan Guaranty purposes in light of VA minimum property requirements and the appropriateness, completeness, consistency and accuracy of the fee appraiser’s reasonable value determination. In completing this administrative review, I’m performing a due diligence function and not acting as, or taking the responsibility of, a cosigner of the report or supervisory appraiser. Any disagreements or comments, etc., resulting from the administrative review of this appraisal are fully explained on the attachment to this report.
This box [ ] is checked if there were none.”
The SAR must also sign and date the certification, along with including their LAPP ID Number. The appraisal review (and thus the SAR certification) is an important part of the appraisal process. However, don’t fall into the trap of thinking that you can work through the SAR to get an undesirable result fixed. The SAR is only allowed to consult with the appraiser on things that don’t look right; any changes must be made by the appraiser in writing. Also, the SAR is not permitted to use anything other than market data and generally-accepted methodologies to suggest those changes. When the SAR makes the certification, they are stating outright that they personally reviewed the appraisal report, concurred with the appraiser’s recommendations except as they noted in any attachments, and they determined that the appraiser used appropriate and reasonable methodologies, made consistent conclusions based on the data in the report, and complied with all applicable VA requirements.
Lastly, the SAR certification is a statement that the SAR, “did not exert pressure or undue influence on the appraiser to change information or to reach a predetermined value for the subject property in order to accommodate the sale price or mortgage transaction, if clarification or corrections to the appraisal report were requested.” While the SAR is more likely to keep you in the loop if things are taking longer than expected, they are very limited in what they are able to actually do if the appraisal did not come back the way you hoped. In most cases, there’s nothing wrong with the appraisal report and you may just need to start looking for another home.