Who Gets the Appraisal Report First: Lender or Borrower?

A real estate appraisal report provides a professional and objective opinion of a property’s market value on a specific date. This detailed document is fundamental in various real estate transactions, including property purchases, refinances, settling estates, or taxation. The report considers factors such as the property’s condition, location, size, and amenities, providing a comprehensive analysis of its value within the current market.

The Lender as the Primary Recipient

In most real estate transactions involving a mortgage, the lender is the initial recipient of the appraisal report. Lenders typically order the appraisal to assess the collateral risk associated with the loan and to confirm that the property’s value supports the loan amount. This process is often managed through an Appraisal Management Company (AMC), which acts as an independent intermediary between the lender and the appraiser. The use of an AMC helps ensure the appraiser’s impartiality and compliance with industry standards, preventing potential conflicts of interest.

The appraiser delivers the report directly to the lender, or the AMC on their behalf. This direct delivery ensures the lender has the necessary information to make an informed decision about the mortgage loan and prevent overlending. Even though the borrower often pays the appraisal fee as part of closing costs, the lender remains the appraiser’s client and primary recipient.

Borrower’s Access Rights

While the lender is the primary client for the appraisal, borrowers have a legal entitlement to receive a copy of the appraisal report. Federal regulations, specifically the Equal Credit Opportunity Act (ECOA) and Regulation B, mandate that creditors provide loan applicants with a free copy of the appraisal and any other written valuations. This requirement applies to applications for credit secured by a first lien on a dwelling. Lenders must inform applicants in writing of their right to receive a copy of the appraisal within three business days of receiving the loan application.

The appraisal report must be provided promptly upon its completion or at least three business days before loan consummation, whichever occurs earlier. This timing allows borrowers sufficient opportunity to review the valuation before closing. Borrowers generally receive the report through secure electronic delivery, such as a lender’s online portal or email, or via mail. A borrower may waive the three-business-day timing requirement, but they must still receive a copy of the appraisal at or before closing.

Access for Other Parties in the Transaction

Other parties involved in a real estate transaction, such as real estate agents for both the buyer and seller, and the seller themselves, typically do not receive the appraisal report directly from the appraiser or lender. The appraisal report is confidential between the appraiser and their client, which is usually the lender. This confidentiality means the appraiser cannot share details of the report with anyone else without explicit permission from the client.

Real estate agents might gain access to the appraisal report if the borrower chooses to share their copy. Buyers frequently share the report with their agents to review the findings and assist with negotiations, especially if the appraised value is lower than the agreed-upon sale price. Sellers do not automatically receive a copy unless the buyer or lender decides to provide it, which often happens in situations where a low appraisal impacts the transaction, such as a loan contingency. While sellers are obligated to grant appraisers access to the property for inspection, they generally do not have a right to the report itself.