Does the Homeowner Get a Copy of the Appraisal?

By
Real Estate Agent with Frankly Realty - Old Town
http://actvra.in/Twc

In a refinance situation, does the homeowner get a copy of the appraisal?

I receive this question a lot.  And I hear agents and other appraisers talking about it from time to time.  Their conclusions, however, vary...

Just in case you're one of those people who hates reading blogs and just want to know the answer, I'll spare you the suspense: Yes!  Yes, the homeowner is entitled to a copy of the appraisal.  

Still, it can get tricky...

And in case you're one of those people who both hates reading blogs AND need an appraisal, skip on down to Appraisals Guaranteed and order one!

And just to clarify ...  The homeowner receives the copy of the appraisal in a refinance of the existing loan.  When it's a purchase, it's the home buyer who receives the appraisal.  

The appraiser receives an assignment from a specific client.  Often, that client is a bank who is in the process of providing a loan to the homeowner (or home buyer).  So .... the client is the bank.

The appraiser conducts the appraisal following a series of steps outlined in the Universal Standards of Professional Appraisal Practice: USPAP.

You can purchase the 2012-2013 version of the USPAP book at the Appraisal Foundation (www.appraisalfoundation.org) for $60.  I've never purchased one--they always just send it to me every other year.  I think it's covered in part of my license fee, but honestly, I have no idea.  You can also take a class (recommended if you really want to know about it) from the fine folks at the Appraisal Institute.  They offer it online too...  And to top it off, some clever person has made the book available online, for free, but in a clunky flash site here: http://www.uspap.org/#/1/ ...

OK, now, once again, back to the question: DOES THE HOMEOWNER GET A COPY OF THE APPRAISAL?

     1) The bank is the appraiser's client.
     2) The appraiser has obligations to his client under USPAP.

However, there's a number three .... 

     3) The state law...

I am not an attorney, and I can't tell you where it is in the code, but in Virginia, there was an appraiser who refused to provide a copy of his appraisal to the homeowner, citing USPAP.  He said. "Look, I know you paid for the appraisal, and I know you are affected by the value opinion in the report, but I ain't sharin'!  USPAP demands that I not share any of my information with anybody but my client!  Go away--you're bothering me!"

Well, guess what?  There's also a section of USPAP that says (and I'm paraphrasing): "When the applicable law in your area contradicts USPAP, go with the law."

USPAP is a set of guidelines and rules.  The law is the law.

So, this appraiser was taken to court by the homeowner, and the judge said "hey, the homeowner paid for the appraisal--he gets a copy!"  And that was that...

I can't imagine what kind of stubborn appraiser with no legal counsel would waste a day in court ... oh, wait, yes I can :-) .... but his case: The Great State of Virginia vs. Mr. Bonehead (really, you can look this up on Westlaw), illustrated the answer to the question in this blog.  

So, how do I handle this question?

I try to remain true to USPAP, but at the end of the day, I'm following the law. 

I simply ask the homeowner, "hey, can you ask the client for a copy of the report first?  Send them an email specifically asking for the report."

Then I tell them to wait a reasonable amount of time.  I kind of think "reasonable" means two days, but in the banking world it could be a couple of weeks.  The homeowner rarely seems to be in a great hurry, and two days to two weeks is typically reasonable enough for them....

But, in the cases where the bank declines to send them one... (and why would they do that?  Well, salespeople sometimes are great at sales but terrible at the follow-up and details) .... I ask the homeowner to forward me a copy of their request.  I print it and stick it in my file, and I send them a copy of the report.  And I copy the client just to let them know that I'm kind of annoyed that they aren't doing their job and that I do not care an iota that I have just violated USPAP (you know, because I have the law on my side and all that...) ....

And that's how it goes.  

I should point out that 98.2% of the folks who ask their bank for the report just get it ... but if they don't, they are entitled to a copy of it from the appraiser.

So, to recap: Does the homeowner get a copy of the appraisal?  Yes, yes he does?  Is providing it against USPAP?  Yes, yes, it is.  Should you be ordering all your appraisals in Northern Virginia and Washington, DC from Appraisals Guaranteed?  Yes, yes you should!

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Schuylkill Appraisal Services 04/14/2013 02:50 AM
  2. Ed & Tracy Oliva 04/14/2013 06:05 AM
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Rainmaker
388,141
Rob Spinosa
RPM Mortgage, Marin County, CA - Mill Valley, CA
Executive Loan Advisor, Marin Mortgage Broker
Appraisals are one of the best tools for demonstrating the Zen saying, "It is easy to make a simple thing complex, but hard to make a complex thing simple." USPAP and HVCC have succeeded in obfuscating what all of us would inherently grasp on day one of a career in real estate. So what do we do? We deal with it. It's reality and it's not going away. Best to play by the rules, and this post does a great job of providing an overview on them.
Apr 14, 2013 12:28 AM #5
Rainmaker
2,102,226
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

This subject always got my goat...Whats the big secret anyway and the insult is it is paid for too...Share the value and lets move on

Apr 14, 2013 01:06 AM #6
Rainmaker
1,547,604
Carla Muss-Jacobs, Principal Broker (503) 810-7192
BuyersAgentPortland.com | Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time - Portland, OR
Buyer Focused ~ Buyer Results

Isn't the person paying for the whatever it is, appraisal in this case, entitled to a copy? Most re-fi's have the owner paying for the appraisal. So I'd think they'd get a copy, since the appraisal is paid by them.

Apr 14, 2013 01:53 AM #7
Ambassador
602,258
Brian Schulman
Coldwell Banker Residential Brokerage, Lancaster PA - Lancaster, PA
Lancaster County PA RealEstate Expert 717-951-5552

The buyer often won't get a copy without asking - that's why buyers should ask, and follow up with the help of their agent if not provided in a reasonable period of time.

Apr 14, 2013 02:06 AM #8
Rainmaker
832,994
Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
REALTOR and Broker

I think under RESPA, if I'm not mistaken, the one who pays for the appraisal is entitled to a copy.

Apr 14, 2013 02:34 AM #9
Rainer
375,126
Dan Hopper
Keller Williams Realty Downtown LLC - Denver, CO
Denver Realtor Advocate/Short Sale

Thanks, Rick ... it is nice to know that a judge understands the law!   The USPAP is NOT a law... so many appraisers have tried to hide behind it.

Apr 14, 2013 02:57 AM #10
Ambassador
1,146,797
Bryan Robertson
Intero Real Estate - Los Altos, CA
Broker, Author, Speaker

What gets me is that in the past I've had lenders tell me that they will NOT send a copy of the appraisal.  Their excuse was "The bank ordered it and the client is simply paying a fee" which is a lie.  There have been times when I had to go out of my way to get the appraisal for my client.

Apr 14, 2013 03:27 AM #11
Rainmaker
100,871
Rick Phillips
Frankly Realty - Old Town - Alexandria, VA
I care about you and your transaction.

Thanks everyone for the comments...

In the old days, lenders would refuse to send the borrower his credit report.  I honestly don't know the reasons, but I know that the fear was that a person who did not know his own credit score could be taken advantage of.  And this isn't even that big of a deal these days when we have access to our own credit reports at very little cost any time, day or night .... 

I think the fear with not sharing the appraisal is similar.  Not knowing the appraiser's opinion of value takes away from the sales folks' negotiating power.  In some cases the appraiser might have missed something important, and it's reasonable for someone else to check over his work.  In other cases, the appraiser may have it right on (even if the opinion is lower than what people would like).  

And the word "transparency" has been working its way into our world over the past decade.  It's a good thing.  

@Rob - Don't mix and match USPAP with the HVCC.  USPAP is a good thing ... and very fact that it acknowledges that a law might trump it is proof of that.  The HVCC is another story.  It completely changed the manner in which we do business.  There are some good things that came out of it, but overall, I'm not a fan.  The HVCC has gone, but its effects have remained.

Apr 14, 2013 04:40 AM #12
Rainmaker
486,700
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

I make sure I receive a copy of the appraisal for my records. Buyers tend to lose them. This is a very important document.

Apr 14, 2013 05:47 AM #13
Rainer
16,281
Cara Lam
Gladewater National Bank, NMLS#1009328 - Pinellas Park, FL
Cara Lam, Gladewater National Bank

I have always given a copy of the appraisal along with other papers (in a nice legal size folder) to the client at the closing. Purchase or Refinance. This is a nice way to have a folder/binder where my client can keep all their documents for future reference.   

 

Apr 14, 2013 06:22 AM #14
Rainmaker
1,784,382
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Waxhaw/Fort Mill Area Realtor

I always tell my clients to specifically ask for a copy of an appraisal and to keep bugging their lender until they do. Afterall, they paid for that appraisal... they own that "intellectual" property.

Apr 14, 2013 06:53 AM #15
Rainmaker
790,104
Bob Ratliff
Renowned Realty - Austin, TX
"Sold with Bob"

Rick, great blog post and got some of the AR members stirring their pot's.....lol

I've never had a client not get their appraisal but I'm sure it has happened to others and reading your story about the Appraiser who refused, well he's probably no longer in business?

I can see why this blog was featured and thanks for sharing your take on it, good job...

Apr 14, 2013 07:09 AM #16
Rainer
40,826
Frank Nolan
Nolan Realty Team / Pacific home Brokers - Palos Verdes Peninsula, CA
Jump and the net will appear
The party requesting an appraisal (usually the lender) is not necessarily the "client". If they are paying for it then yes they are the client but in most cases it is the borrower that pays for the appraisal making them the client, or employer of the appraiser, so therefore they are entitled to a copy of it, whether it is for a purchase or re-finance is irrelevent.
Apr 14, 2013 11:42 AM #17
Rainmaker
100,871
Rick Phillips
Frankly Realty - Old Town - Alexandria, VA
I care about you and your transaction.

The guy who pays for it in a refi or purchase is NOT the client ....

Apr 14, 2013 11:46 AM #18
Rainer
240,103
Jesse Skolkin
Independent New York State Certified Real Estate Appraiser - Fresh Meadows, NY

FAQ 254 of USPAP directly addresses this issue:

254. OWNERSHIP OF APPRAISAL REPORTS

Question: A property owner has requested a copy of an appraisal report I prepared for a lender. Who owns an appraisal report, its associated research and supporting documentation?

Response:

USPAP does not specifically address who owns an appraisal report, the research necessary to produce that report and the report’s supporting documentation. 

Appraisal reports of all kinds are, by definition … transmitted to the client… As indicated in Standards Rules 2-2, 8-2, and 10-2, and further described in Advisory Opinion 12, Use of the Appraisal Report Opinions of Standards Rules 2-2 and 8-2, the decision as to which reporting option is appropriate for any given assignment is reached by both the appraiser and the client.

However, once that decision has been competently made, USPAP does not place further responsibility upon the appraiser for the client’s use of that report. 

An appraiser who receives a request from any party for a copy of an appraisal report must comply with the Confidentiality section of the ETHICS RULE which, states:

An appraiser must protect the confidential nature of the appraiser-client relationship.  

An appraiser must act in good faith with regard to the legitimate interests of the client in the use of confidential information and in the communication of assignment results.

 The Confidentiality section of the ETHICS RULE further states:

 An appraiser must not disclose: (1) confidential information or (2) Assignment result to anyone other than:

the client; 

persons specifically authorized by the client; 

state appraiser regulatory agencies; 

third parties as may be authorized by due process of law; and 

a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation

Apr 14, 2013 10:00 PM #19
Rainer
28,027
Brian Park
Park Realty Investments - Murray, UT

Many keep saying they paid for the appraisal so therefore are entitled to a copy. Many years ago when I was battling for a copy the lender wrote to me and said your client didn't pay for it, we did, we ordered it and paid the appraiser directly, they just reimbursed us for the expense as part of the loan processing fee we charge the borrower So a legal technicality.

When they made a visit to my office asking why they weren't getting any loans from us any more, I just pulled the letter and told them when the head of the company comes to the office and performs a certain act, maybe I would reconsider. So we just started adding clauses to everything, the purchase contract, the loan application, etc and started a new war.

Other brokers in the area joined in our efforts and a list of appraisers and company's that would not provide copies to those who paid directly or indirectly was added to our list. Being boycotted resulted in new cooperation. One result was finding a lot of appraisers doing a sloppy job, and proving the old saying that MAI really stood for made as instructed.

Apr 15, 2013 01:19 AM #20
Rainer
139,841
Ridhi Raheja
Movement Mortgage (Illinois) - Naperville, IL
FHA, 203k, VA, Jumbo, PreApproval, Jumbo Home Loan

Appraisal is a very important document. Client should always ask for a copy of it. Great interactions of comments from other AR members.

Apr 15, 2013 02:51 AM #21
Ambassador
1,680,446
Fred Griffin
Frederick Griffin, Exclusive Buyer's Broker - Tallahassee, FL
Licensed Florida Real Estate Broker

Hi, Rick.   

      Beginning January 18, 2014, The Dodd-Frank Act will require Lenders to provide a Copy of the Appraisal to Borrowers who are applying for first-lien credit on a dwelling.

     The Lender will have to notify you within 3 business days of your right to the Appraisal.  The Lender must provide copies of the Appraisal and any other written valuation within 3 days of their completion.  The copies must be provided "free of charge" to the Borrower.

      Please see a qualified Mortgage Lender for complete details, including your right to waive the 3-day timing requirement.

Apr 15, 2013 02:52 AM #22
Rainer
40,826
Frank Nolan
Nolan Realty Team / Pacific home Brokers - Palos Verdes Peninsula, CA
Jump and the net will appear

According to USPAP definitions:

"Client: the party or parties who engage, by employment or contract, an appraiser in a specific assignment.

            Comment: The client may be an individual, group, or entity, and may engage and communicate with

                             the appraiser directly or through an agent."

 

So I guess according to the definition both the bank and the borrower could be considered the clients, as the borrower is paying for it, therefore creating an employer/employee relationship and the bank is ordering it directly with the appraiser. I guess the judge in the virginia case felt the same way.

 

 

Apr 15, 2013 04:20 AM #23
Rainer
73,514
John J. Woods
Aardvark Appraisals - Palm Desert, CA

 

   Dan (#10) is absolutely right - USPAP is not law.  But appraisers are bound by USPAP and if they want to 'stay in good standing' as an appraiser they will follow USPAP as closely as possible.  NOT "hide behind it"...

 

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"Remember - Think twice, push ‘Send' once.  Blogging, posting, commenting:  It's all 'never having to say you're sorry', because that won't make any difference --


-- it's FOREVER!"

Apr 21, 2013 04:26 AM #24
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