It’s common to hear things like, “I paid for the appraisal, so it’s mine,” or “The buyer paid for the appraisal, so I think it belongs to the buyer.”
So, let’s say the buyer paid for an appraisal during a loan, does that mean you own the appraisal? Unfortunately, the answer is NO. Typically, the buyer isn’t actually the appraiser’s client, therefore it’s not possible for them to own the report.
Here are some points to ponder on about the client in an appraisal:
Who is stated as the client in the appraisal report? The lender is clearly defined as the client in the report: Even if the buyer pays for the appraisal, the lender is always listed as the client in a typical loan. With that said, the buyer is intended as a user of the report and is even given a copy of the appraisal from the lender. However, there is still a difference between the actual client who hired the appraiser and a user of the report. The buyer CAN be the client in a private appraisal, just not in typical loans.
What is the purpose of the appraisal? In a typical Fannie Mae appraisal form, we see the purpose of the report is to have the property evaluated for the lender to make a decision about the loan. Even if it is a given that the buyer may rely on the report when making a big financial decision, however the objective of the appraisal isn’t really about the buyer. The point of the appraisal is for the lender to determine if the loan is doable or not. We have to call to mind that the appraisal is really an invaluable tool for the lender despite it being paid for by the buyer.
Can the you take your appraisal to another lender? Unlikely. In case of doubt in terms of who owns the appraisal, even lenders recognize that appraisal forms belong to other lenders, therefore the buyer cannot take the appraisal to another lender. This is the reason why a new appraisal is ordered when you switch to a new lender or in certain cases, the same appraiser is hired to do the new report in the name of the new lender. One thing to remember is that during an FHA transaction, the appraisal sticks with the property and not the lender, so this is an exception to the rule.
It’s important to keep in mind that the appraiser is actually hired by the lender and is working for the lender – not the buyer. Appraisers aren’t trying to be rude by refusing to talk about value during a transaction. It’s just the appraiser’s client is the lender – not the agent, loan officer, home owner, or buyer. It wouldn’t be wise for an appraiser to talk about the property’s value with someone who is not the client, so appraisers often tend propose that the buyer talk about such matters with their lender/AMC.
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