Does an appraiser need a copy of your purchase agreement?

Question

My wife and I are closing on a house and we are wondering why he needs a copy of it just to give the lender his appraisal!

Answer 1

The 'senior mortgage broker' has no idea what he/she is talking about. When appraising property an appraiser must follow the standards set forth in (USPAP) Uniform Standards of Professional Appraisal Practice. USPAP is developed on behalf of appraisers and users of appraisal services i.e. lenders. USPAP is used by state and federal regulatory agencies for overseeing the appraisal industry.

Here is a quote from the USPAP standards:

Standards Rule 1-5 (This standards rule contains BINDING requirements from which departure is not permitted.)

In developing a real property appraisal, when the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business:

(a) analyze all agreements of sale, options, or listings of the
subject property current as of the effective date of the
appraisal.


In addition to a USPAP requirement any loan that is going to be sold to Fannie Mae also requires the appraiser to review the contract or they will not purchase the loan on the secondary market.

If anyone has seen a recent appraisal there is a section that is devoted to the analysis of the purchase agreement. The appraiser needs to see the terms of the contract for any concessions, buydowns, personal property included in the sale, etc. in order to determine if the terms of the transaction is typical for that specific market area. Most lenders will not close a mortgage loan for a purchase if the appraiser indicates that he/she has not reviewed the purchase contract.

So the question is why won't you give a copy to the appraiser? Is there something you don't want him to see?

Answer 2

No. An appraisal is supposed to be independent of all banking information. A previous answer mentioned selling price vs. fair market value and this is all to mislead the consumer. If your appraiser asks for the purchase agreement then you are not getting a fair appraisal and you should find someone else. If it is too late, ask the lender to give you proof of the law that requires it.

Answer 3

Yes, they will typically ask for it. Reason being is, when you purchasing rather than refinancing, the appraised value will typically be very close to, if not exactly, what the purchase price is. If you were the seller, what would you think if your home appraised $20,000 higher than what you were selling it for? Would you reconsider selling it to you for $20,000 less than what it was truly worth? That obviously depends on the sellers motive to sell, true, but do you see my point? Also, if the seller is giving you money back towards your closing costs, the true price is lowered to reflect that, which would be stated in the purchase agreement.

Answer 4

An appraiser determines current market value of a property primiarly through comparables and other market data. The purchase agreement has no bearing. I would seriously question this appraiser's competence.

Answer 5

Most banks dont really do a 'true' appraisal. They send the appraiser out there KNOWING The purcahse price, and his job is only to validate that price-- not come up with an indpendant one. He probably wants to see what the price is, and know if a portion of that is seller-paid-closing-costs.

I think the process sucks-- they should come up wtih the price on just the house and make sure you'er paying an accurate price!

Answer 6

YES

http://www.choicefinance.net/

Answer 7

some of the appraisal company need purchase contract to check and verify some info like purchase price , name of the owners, correct address, pin number of the property and things like that.

Answer 8

Yes he does. As already stated, he needs to validate the contracted purchase price. As such, he needs the contract.....

Answer 9

greenshirt's answer is right on the money!

Answer 10

no