Does the Buyer Get a Copy of the Appraisal?

A home appraisal serves as an impartial, professional assessment of a property’s market value. This valuation is a crucial component in real estate transactions, particularly when a mortgage is involved. Lenders typically require an appraisal to confirm that the property’s value adequately supports the loan amount, thereby mitigating their financial risk.

Understanding Your Right to the Appraisal

In transactions involving a mortgage, federal law grants the buyer a clear right to receive a copy of the home appraisal. This right is primarily established by the Equal Credit Opportunity Act (ECOA), implemented through Regulation B. Under this regulation, lenders are generally obligated to provide applicants with a free copy of all appraisals and other written valuations.

Lenders must notify applicants in writing of their right to receive a copy of the appraisal within three business days of receiving the loan application. Subsequently, the appraisal report must be provided promptly upon completion, or at least three business days before the closing of the transaction, whichever occurs earlier. This right to receive the appraisal applies when a lender orders it for their own risk assessment.

Key Information in the Appraisal Report

A standard residential appraisal report contains several detailed components that explain the appraiser’s valuation. It begins with a comprehensive property description, including its address, legal description, and specific characteristics like size, age, and architectural design. The report also includes an assessment of the property’s condition, noting any features, upgrades, or needed repairs that could influence its value.

A significant portion of the report focuses on a neighborhood analysis and comparable sales data. Appraisers analyze recent sales of similar properties, often called “comps,” in the immediate area to determine market trends. Adjustments are made to these comparable sales based on differences in features, size, condition, and amenities when compared to the subject property. The report typically employs the sales comparison approach as the primary method for valuation. Ultimately, the report concludes with the appraiser’s final opinion of the property’s market value.

Steps for Receiving and Reviewing the Appraisal

Once the appraisal is completed, lenders typically deliver the report through secure electronic means, such as email or an online portal. If the report is not received, contact the loan officer or lender. The appraisal report should be reviewed carefully for accuracy and completeness upon receipt.

Begin by verifying the basic property details, such as the address, square footage, number of bedrooms and bathrooms, and lot size, to ensure there are no clerical errors. Next, closely examine the comparable sales used by the appraiser, checking their recency, proximity to the subject property, and true comparability in terms of features and condition.

If the appraised value comes in lower than the agreed-upon purchase price, several options may be considered. Options include renegotiating the purchase price or the buyer covering the difference in cash. As an alternative, if an appraisal contingency exists in the purchase agreement, the buyer may have the option to withdraw from the transaction. Challenging the appraisal is possible if factual errors or overlooked comparable sales are identified.