Bank not giving appraisal until closing? (contingent, recommendation, square footage, agent)
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Location: Sometimes Maryland, sometimes NoVA. Depends on the day of the week
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Anyone heard of this? My bank has done the appraisal, but won't give it to me until closing. They say that they own it until I pay for it (at closing), therefore they don't have to give it to me. When I bought before and when I refinanced, I got the appraisal immediately. My agent has never heard of this before. Ug! I'm very frustrated with them for several reasons (this being one), but so far into the process and so close to closing its too late to switch.
(just more venting)
I do like people say, get recommendations, talk to several people, and I am still mostly dissatisfied with people I work with. Two realtors I disliked (one I love!), 3 banks/mortgage co. I've dealt with and been unhappy with. And 3 real estate deals that have been drama filled. I think I am cursed.
Anyone heard of this? My bank has done the appraisal, but won't give it to me until closing. They say that they own it until I pay for it (at closing), therefore they don't have to give it to me. When I bought before and when I refinanced, I got the appraisal immediately. My agent has never heard of this before. Ug! I'm very frustrated with them for several reasons (this being one), but so far into the process and so close to closing its too late to switch.
(just more venting)
I do like people say, get recommendations, talk to several people, and I am still mostly dissatisfied with people I work with. Two realtors I disliked (one I love!), 3 banks/mortgage co. I've dealt with and been unhappy with. And 3 real estate deals that have been drama filled. I think I am cursed.
Unfortunately it is up to the Bank whether they want to be butts about it
The good news is if they are continuing with the sale it must have appraised alright
The best thing you can do is have your agent do a CMA that's what the appraisers do anyway
or have your own appraisal but like I said your agent can do it for free
Whoa! There sure are differences from state to state. It is true that the bank owns the appraisal until it's paid for. Here in AZ the buyer usually (but not always) pays the appraisal fee at the time they sign the loan application. Therefore, they usually "own" the appraisal as soon as it's completed. Also, our contracts are contingent on the property appraising for at least the sales price. Am I right to assume that the lender at least verbally told you what the appraisal came in at?
Personally, if it were me on my own purchase, I would go ahead and pay for the appraisal. I wouldn't wait til closing. I'd want to see what it said and which homes the appraiser used for comps. But that's just me.
Last edited by Gretchen B; 05-04-2007 at 10:29 PM..
Reason: typo
I'm a lender so I speak with some knowledge on this matter.
Technically the bank does own the appraisal even if you paid for it at the door. It is ordered in the name of the bank/mortgage company. When you pay at the door you are just helping the 3rd party appraiser.
A lender will not accept a buyer or seller ordered appraisal as there could be a conflict of interest in the motivation of the appraisal. i.e. a seller wants a high price, a buyer wants a low price. Therefore they will usually not release the appraisal until closing.
Sometimes a lender will release it out of courtesy. At the least they should tell you what it came in at. But if the bank pays for it they don't have to even tell you that.
From my experience, I've seen too many deals go sideways when an appraisal is released since it does not make sense to the lay person. (Heck, I have problems reading them and I'm in the industry. One of my banks recently gave me a "cheat sheet" to be able to look for Red Flag areas.) The appraiser is putting together a legal document looking at many different criteria as required by the govt. and the mortgage industry. This data might not look "right" to you or your Realtor. I've reached a point where I reluctantly release appraisals prior to closing. It's just not worth the headaches. I had one client who didn't like the value my appraiser came in at and went behind my back and ordered her own appraisal. It came in lower and cost her $400 to find out. If the value is there that should be good enough.
arent many if not most contracts, contingent on buyer acquiring a certain percentage rate, and house appraising, for the asking price?
since that is of such importance in the contract, i believe its in the lenders best interest to make public,,(to the buyer), but it seems its a safe assumption ,,if the property is closing, (the lender authorized the mortgage) that it did appraise well.
now what if the appraisal came in wayyyy over contract price??? say there's a discrepancy of 20-50 plus grand,,,, tho rare,,im sure it may happen,,,and,,
then see if its a fsbo, or other gray areas, perhaps of where the owners house was grossly undervalued and a broker was part purchaser, or the listing broker,,was immediate purchaser, when an owner set the price wayyy below market value,,i know,,its unethical,,, but im sure it happens,,
and how many brokers today,,even tho "net" listings are illegal,,,owners tell them,,,there low-ball range of price acceptance. ...and...again tho unethical,,,,all the sudden the broker has a close "friend" to buy this property, knowing the low range price,,,,i've never done this,,but ive heard of many many conversations,,usually at social events,,,,when property owners,,will throw out numbers (prices) and ask brokers if they have a buyer (not knowing the true market value) of thier property, and all the sudden,,, you hear the words, "i might just have a buyer for you"
Location: Sometimes Maryland, sometimes NoVA. Depends on the day of the week
1,501 posts, read 11,750,593 times
Reputation: 1135
Thanks for all the info. I guess its not as rare as it seems (in my limited experience). They haven't even told us the value, just that the appraisal was "fine." We are trying to figure out if that means (1) at least the purchase price or (2) at least the mortgage amount. We are putting 20% down, so my husband is afraid the appraised value could be somewhere between the mortgage amount and the purchase price. I would like to think they would have told us if that was the case, but, we have learned to trust no one but ourselves in this process.
As for the comment on not understanding appraisals - I've seen two before, and I felt I understood them well enough. Maybe there were parts I didn't understand, but I could clearly see how the comps were used and my place added or subtracted value from that number.
Well, I may be a "lay person" but I do understand and know how to read an appraisal. I had one done last year myself just to have the proper square footage and to use it to fight my personal property taxes (the appraiser that did it at purchase a few years ago had the square footage off and the county had jacked up our value way too high last year). If your lender said that the appraisal was "fine" I would not be worried about it. They see the purchase price even though your putting down 20%. I know of many times that a home was for sale at what seemed like a reasonable market price and the buyer offered close to or right below and the appraisal came back a lot lower. In those cases the buyer can make up the differences in a cash downpayment or the seller has to come down or the contract is allowed to expire and the parties go their own way. In that case you would be told what the appraisal came in at and the sellers could request a copy of it also.
Larry - thanks for your helpful information from "the other point of view". I can empathize with you about not wanting to release much detail other than "it's fine" before closing. It just seems like here in AZ, the information is released early on. I thought that was probably due to the fact that the buyers were paying for it before it was ordered.
Just curious, what if the appraisal comes in lower than the selling price, but still acceptable for the loan balance. Do you then reveal that to the buyer? Buyers in AZ would have to have that information as they are purchasing their home contingent on it appraising for the selling price.
I agree wholeheartedly (not that anyone cares ) with Gretchen B on this one. The bank only cares that the home appraises to meet their loan to value requirements and not necessarily that it appraises for the sale price. Here in Missouri our Appraisal Rider, which any agent worth anything will include in a sales contract, states that if the appraisal doesn't come in for at least contract sale price the contract can be renegotiated. Like Gretchen said, pay for the appraisal before closing. You don't loose anything because you're paying for it either way.
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) with Gretchen B on this one. The bank only cares that the home appraises to meet their loan to value requirements and not necessarily that it appraises for the sale price. Here in Missouri our Appraisal Rider, which any agent worth anything will include in a sales contract, states that if the appraisal doesn't come in for at least contract sale price the contract can be renegotiated. Like Gretchen said, pay for the appraisal before closing. You don't loose anything because you're paying for it either way.
