A look at who owns the appraisal report
I paid for the appraisal so why can’t you give me a copy of it? This is a frequent question I get from homeowners who want a copy of their appraisal report. Today I want to clear up this confusing topic about who owns the appraisal report.
First off, I want to make sure that you know that the answer to this question will vary depending on who orders the appraisal. We’ll break down each scenario, so let’s get started.
When the lender orders appraisal
The first situation that can occur is when a bank, mortgage company, or other lender orders an appraisal on behalf of the homeowner for either a purchase, refinance, or another similar loan. Most banks have a list of appraisers that they have approved to do work for them. If the bank does not do this from within their company they probably use an Appraisal Management Company (AMC) who does the ordering for them.
In the process of all of this, the bank collects payment for the appraisal from the homeowner. It is currently a requirement that the appraisal is ordered by the lender. So far in our scenario, the bank has collected the money from the homeowner and will be ordering the appraisal.
After the appraisal is completed it is delivered to the bank, since they ordered it. The bank is required by law to provide a copy of the appraisal report to the borrower. The appraiser is not authorized to provide a copy to the borrower or homeowner because the bank is the owner, even though they may not have paid for it.
The only parties that see the appraisal are the appraiser, the bank, and the homeowner. I get asked all the time if anyone else has access to the report, and as I have stated the answer is no, except for the parties I just noted.
The actions of the appraiser in this matter are controlled by the confidentiality section of the ethics provision of the Uniform Standards of Professional Appraisal Practice. This section states the following:
An appraiser must not disclose: 1) confidential information; or 2) assignment results 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; or
- a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation.
This basically means that the appraiser must protect the confidential nature of the appraiser-client relationship by only providing the report to those parties chosen.
When the homeowner orders the appraisal
Whenever an appraisal is performed for a private party such as with pre-listing appraisals, PMI removal appraisals, estate planning appraisals, bankruptcy appraisals, or tax appeal appraisals the rules are slightly different.
The rules of confidentially are the same, but because the appraisal was ordered by the homeowner they are the client. The lender is not involved in this scenario.
Whenever the appraisal is completed it is provided to the homeowner and no one else, unless they want to give it to someone, like a potential buyer, but that is up to them. The appraiser will not disclose confidential elements or assignment results to anyone unless the client requests it.
As you can see, the rules are pretty much the same for a lender appraisal as they are for a private appraisal but with the latter, the lender is not in the picture.
Questions
Do you have any other questions regarding who owns the appraisal report? If so, leave a comment below and we will keep the conversation going. As always, thanks for reading.
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When a couple have decided to get a divorce and the husband orders and pays for an appraisal on a property both husband and wife are on the deed/mortgage…does the wife have any legal rightts to view and get a copy of the appraisal the husband ordered?
I can only speak from the appraiser’s perspective. Looking at it from an appraiser/client relationship, I can only provide the report to the person ordering it. I am not allowed to discuss it with anyone unless given permission by the client. This would not take into consideration anything an attorney could do to subpoena the report and the appraiser to discuss the report at trial.
Is there a time frame by which the lender has to provide a buyer the appraisal? I am currently buying a property and the lender is refusing to provide the appraisal report to me. Says it hasn’t been approved for release and might need to be amended so he won’t send the current one despite discussing the results and appraised value with me. Seems odd. A copy of the appraisal also could help us if we wanted to explore moving to another lender. Seems odd they could just refuse since it is required by law to be released to us. Any guidance would be appreciated.
There is a law that went into effect in 2014 that requires the lender to provide a copy of the appraisal or other valuation tool used to make a loan decision to their customer as soon as it is completed or 3 days prior to the closing, whichever is earlier. You can read more about it in this post I did when the law changed: https://birminghamappraisalblog.com/appraisal/can-give-copy-report-mr-appraiser/
Unfortunately, this covenant is currently being utilized as a sales gimmick to make a potential buyer or one looking to refinance to make the buyer believe that they are locked into a specific lender. The first thing a prospective lender wants is to order an appraisal using your money. I believe that whosoever pays for an appraisal should be the one who is allowed to order the appraisal and as such owns the appraisal. This could then be used as a tool by the borrower to compel lenders to actually compete for your business, instead of pressuring you to use their service.
You bring up some good points Vaughn but currently that is not the rules and I doubt it will change anytime soon.
This can be a frustrating issue for home owners to not get a copy of the report from the appraiser during a loan. But the appraiser saying NO is actually a good thing because the appraiser is essentially upholding client confidentiality. The lender thankfully has to provide the home owner with a copy, and it still might feel frustrating to not get a copy directly, but we have to pause and appreciate that the appraiser is not sharing the report with everyone else.
Yeah, I don’t think the client would like the report to be put out there for mass consumption.
Thank you for covering this common question about appraisals Tom.
Thanks Gary.