Buying a home involves property inspections and evaluations, which shed light on what the interested parties are investing in. A home appraisal report is an evaluation that provides an opinion of value for a property, and its results can make or break a deal. The determination of who keeps a copy of the appraisal is a matter of who orders it, who pays for it, and who has a contractual right to receive the report.
Lenders Get First Dibs
Mortgage lending institutions order appraisal reports directly from appraisers or from third-party appraisal management companies, which maintain rosters of independent appraisers. When an appraisal is involved in a home sale, the appraiser usually visits the property, inspects its condition, and researches pertinent market activity to arrive at a value. For evaluation purposes, the appraiser can ask questions of a seller, a lender's representative, and other sources knowledgeable about the home or area. The lender that orders the appraisal has the exclusive right to the report to determine whether a home meets its standards for collateral.
Because an applicant for a home mortgage isn't the appraiser's client, the appraiser doesn't have to supply the potential buyer with a copy. The appraiser or appraisal management company is only obligated to send the appraisal to the lender that ordered it. The lender, in turn, may supply the applicant with a copy of the appraisal at its discretion. Lenders generally provide a copy when the applicant pays for the report, requests a copy, and proceeds to close with the lender who ordered the appraisal. According to Broker Outpost, a borrower has the right to receive a copy of the report if he sends a written request within 90 days of the loan application.
No Selling Out to Sellers
Sellers may want to see an appraisal copy, especially if the appraised value falls short of a desired sale price. Despite a financial interest in the appraisal results, sellers have no legal right to receive a copy, unless the sales contract calls for its disclosure. For example, in California, a standard Residential Purchase Agreement states that the buyer must provide the seller with "complete copies of all buyer investigation reports." Although this may suffice as reason enough to hand over the report to a seller, if it's not in a buyer's best interest to do so, a buyer may argue that the report is not a buyer investigation, but rather a lender evaluation, according to Bob Hunt, a former director of the National Association of Realtors.
The Final Say
The appraisal report belongs to the lender -- the appraiser's client. Subsequent lenders, such as a secondary financing provider or a new lender chosen by the buyer, may not receive a copy without the original client's permission. Furthermore, the appraiser must change the lender's name on the appraisal report, and only with the original lender's permission. Although a buyer pays for an appraisal report -- usually an up-front fee between $350 and $450 -- the buyer is limited as to what he can do with the report.
- Realty Times: Does Seller Have A Right to the Appraisal?
- Broker Outpost: Mortgage Reference Library: Consumers Right to Receive an Appraisal Report
- Baltimore Sun: Can A Home Seller See the Appraisal of His Own Home?
- Appraisal Course Associates: The Appraiser-Client Relationship and Confidentiality - See more at: http://www.appraisalcourseassociates.com/2011/12/10/481/#sthash.IxEtCUI1.dpuf
- Federal Deposit Insurance Corporation. "The Home Mortgage Appraisal: How Consumers Can Benefit." Accessed May 27, 2020.
- The Appraisal Foundation. "A Guide to Understanding a Residential Appraisal." Page 4. Accessed May 28, 2020.
Karina C. Hernandez is a real estate agent in San Diego. She has covered housing and personal finance topics for multiple internet channels over the past 10 years. Karina has a B.A. in English from UCLA and has written for eHow, sfGate, the nest, Quicken, TurboTax, RE/Max, Zacks and Opposing Views.