Property Inspection Waiver Overview
What is a property inspection waiver, and how does it affect your appraisal?
A Property Inspection Waiver (PIW) allows you the ability to have your mortgage approved without an appraisal on the property. Whether or not your transaction is eligible for a PIW is determined by Fannie Mae or Freddie Mac during the registration process. This means that the lender will assume the purchase price is the final value of the property.
A PIW can be beneficial if you are very familiar with the property, do not feel the need to have it inspected, or are confident that the purchase price you have settled on is reflective of the actual value of the home.
Your transaction might qualify for a PIW if the following are true:
- You are purchasing a primary home or secondary home.
- The property is only one unit.
- Your Loan to Value ratio (LTV) is less than or equal to 80%, meaning that you are putting at least 20% down at closing.
- Appraisals are a common reason why closing dates are delayed. By waiving the inspection, you will eliminate the risk of delaying your closing with an appraisal scheduling conflict.
- You will avoid the appraisal fee which can be anywhere from $500 to $800 depending on your property and location.
- If the purchase price you agreed upon is not accurate, you won’t have the information as to why, or the leverage to negotiate the price.