FAQ: Does the appraisal stay with a property?
This week I had two people ask me a similar question so I thought I would share my answer with you. The question had to do with whether an appraisal report stays with a property, and if so for how long. In addition to that, they wanted to know if other appraisers had access to the appraisal. Let me give you some examples.
In one situation a home was under contract and an appraisal had been done that was lower than the contract amount. The question I was asked was whether the appraisal stayed with the property, and if so for how long.
They also asked whether the report was available to any appraiser that may be appraising the property in the near future. This was asked because they were unsure if the newer appraiser may be influenced by what the original appraiser valued the house at.
The second situation occurred when a refinance appraisal was done and the owner had reason to believe that the appraisal was not valid because the appraiser did not appear to be from the area and may not have known the local market. The owner was concerned that they may not be able to refinance because of the low appraisal, and they wanted to know how long the appraisal would be associated with the property.
Valid questions, reasonable concerns
These questions are valid and the concerns are reasonable. It is not my intention to discredit appraisers that provide reports that are lower than the owners or buyers think they should be. Most of the time I have found the appraiser is going to be correct because their value is provided without bias as a disinterested third party.
What I would like to do is provide information about whether the appraisal report stays with the property and who has access to it.
The only time an appraisal report stays with a property is when it is financed with an FHA or VA loan. When this type of loan is used a case number is assigned to it, and the case number follows the property.
Let’s say that a home is under contract and an appraisal is ordered and completed. Let’s also imagine that the loan falls through because the appraisal was less than the contract.
If a subsequent buyer comes along and a contract is written at the same price, or some price higher than the appraisal came in at, then there could be problems with this deal too. It should be noted that case numbers are automatically canceled after six months unless they are renewed.
The bottom line is that with FHA and VA loans there is a possibility that the appraisal will stay with the property depending on when the original appraisal was done and when the case number was issued. Conventional loans are different because there is no case number or attaching of the appraisal to the property.
The second concern had to do with who sees the appraisal report. The main concern here was whether a second appraiser might have access to the first appraisal that was done because if they did then it might influence them.
An appraisal report that is done for a conventional loan, or any other reason other than FHA or VA, is only seen by the person ordering it and anyone else they give it to. Any appraiser that may be doing a subsequent appraisal will not have access to the prior appraisal unless it is given to them by the party that ordered the first one.
An appraisal ordered by a bank or mortgage company is the property of the company that ordered it. By law, they are required to provide a copy to the borrower. If you did not get a copy during a recent purchase or refinance it may have been an oversight and you should request that they provide you with one.
As you can see, with regard to whether an appraisal stays with a property it will depend on what type of financing is being done. Since a case number is assigned to FHA and VA loans the appraisal will stay with the property for a period of time, however, this is not the case with a conventional loan. Also, appraisers do not have access to prior appraisals on a home unless a copy is given to them.
Do you have any other questions about who has access to an appraisal and how long the report stays with the property? If so leave a comment below and we’ll keep the conversation going. As always, thanks for reading and commenting.