Appraisals

An Appraisal is an estimate of a property’s fair market value. It’s a document generally required (depending on the loan program) by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property. The Appraisal is performed by an “Appraiser” typically a state-licensed professional who is trained to render expert opinions concerning property values, its location, amenities, and physical conditions.

The lender owns the appraisal even though the borrower paid for it. This is because the lender orders the appraisal on the borrower’s behalf, and the Appraiser lists that lender on the report. The borrower does have the right to receive a copy; however it’s the lender ‘s discretion to give the borrower the original appraisal report.

Yes. In most cases you will not have to pay for another appraisal if you change your mortgage company, and depending on the loan program typed, the first lender can transfer it to the new lender. Some appraisal firms may charge a small fee because additional clerical work is required to reflect the new mortgage company; this is called an “Appraisal Retype Fee”. The original mortgage company has the right to refuse to transfer the appraisal to another lender. In this case, a new appraisal is needed.

It’s to your advantage to help the Appraiser perform the assessment by providing additional information:

  • What is the purpose for the appraisal?
  • Is the property listed for sale, and if so, for what price and with whom?
  • Is there a mortgage? And if so, with whom, when placed, for how much and what type (FHA, VA, etc.), at what interest rate, or other type of financing?
  • Are any personal properties or appliances included in the property?
  • With an income-producing property, what is the income breakdown and expenses for the last year or two? A copy of the lease may be required.
  • Provide a copy of the deed, survey, purchase agreement, or additional property papers.
  • Provide a copy of the current real estate tax bill, statement of special assessments, or balance owed on anything, i.e. sewer, water, etc.

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