Should an appraiser ask for a copy of the sales contract

Managing Real Estate Broker with ERA American Real Estate

I understand the question and have seen it many times on ActiveRain.

I have read multiple posts on the topic and there have been some good points brought up. This post I am just talking of why an appraiser would ask for a copy of the contract. I know the counter point is that sometimes some appraisers would just appraise to the contract price and that is a separate topic. This post is just to cover some reasons that appraisers would need a copy of the contract.


  • I understand that the contract will show concessions.

  • The contract contains terms and conditions of the sales that could affect the value of the property including personal items.

  • The contract could show if there is going to be lease back payments.

  • Standards Rule 1-5(a) of USPAP requires an appraiser to "analyze all agreements of sale, options, or listings of the subject property current as of the effective date of the appraisal."

  •  I was told that we need the contract to see if the sales price is an arms-length transaction. It is not used to determine a minimal value.

  • Is motivation readable within the P.A. meaning Was the homeowner willing to negotiate abnormally on this transaction?


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Brandon Jordan, Realtor,E-PRO,ERA American Real Estate

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should an appraiser ask for a copy of the sales contract

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Kathy Denworth
Century 21 Schwartz Realty - Islamorada, FL
Realtor in the Florida Keys, Islamorada, Key Largo

Thanks, now I know! I always wondered about that.

Aug 29, 2010 10:48 AM #1
Pat Champion
Coldwell Banker Camelot Realty - Mount Dora, FL
Call the "CHAMPION" for all your real estate needs

Great topic I'm sure a lot of Realtors have often wondered why have an Appraiser needs a copy of the contract. Thanks for answering the question.

Aug 29, 2010 10:59 AM #2
Joanne Tarantino
Berkshire Hathaway HomeServices Knight & Gardner Realty - Key West, FL
CRS, Realtor

    All these years I always thought it was odd that the appraiser would do the appraisal with contract in hand.  Maybe they should be given the contract with  the price  blacked out.  I think that would make the most objective appraisal.

Aug 29, 2010 11:07 AM #3
Eileen Liles
970-216-0530 - Cedaredge, CO
Macht-Liles Real Estate Group - Cedaredge, CO

Brandon, thanks - I need more education on this subject.

1) why would lease back payments affect the sales price?

2) how does the sales price determine if it is an "arm's length transaction?

3) I don't even understand what the heck Standards Rule 1-5(a) even means!!!

I totally understand how concessions affect what the real purchase price is, but why in the world would the 'homeowners' willingness to negotiate abnormally' (whatever that is) have bearing on the purchase price?  That seems like rather nebulous...

I think Joanne has the right idea - black out the purchase price!  If appraisers actually DO their homework and find REAL comparables, we would have REAL values on our appraisals.  If I go hire Joe Blow appraiser to appraise my home - I don't give him a hint of what I think he should come up with - that is exactly what we are doing when we give them a copy of the contract.  Sorry for the rant :)

Aug 29, 2010 12:32 PM #4
Brandon Jordan
ERA American Real Estate - Crestview, FL

Joanne Thank you for checking out my blogpost and that is the next topic I am posting do they need the sales contract with a sales price not blacked out.


Kathy I am glad you stopped by to view my post.


Pat thank you for the positive comments.

Eileen thank you for checking out my post.

If the seller and buyer have the same name something SR and JR with a purchase price of 50 % of market value that would be a sign of relatives and would answer your question on arms length.

If the seller is only able to give a certain amount in concession per a lender what if there was a leaseback at 2 x or more of the standard rent paid to the buyers for leaseback for a period of x months? This would be somehting that could affect value.

The ASB Appraisal Standard Board would be a great resource to learn if you are interested in this topic of Standards Rule 1-5(a)

Hope that helps.

Aug 29, 2010 02:40 PM #5
Deborah Byron Leffler BzyBee Real Estate Lady!
Keller Williams Realty Boise - Nampa, ID

Interesting...I didn't know the reason they asked either....didn't worry about it as it seems especially now that they have a hard time coming in at market value!   All are scared in our area!!!

Aug 29, 2010 04:10 PM #6
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