Profile picture for mambomami

IS a contract other than an offer binder requiresd to obtain a copy of the appraisal?

I just paid for the appraisal of the home upfront and now the results are in.  The lender told me that in order for me to get a copy of the appraisal, I must submit the purchase contract to them.  Is this legal?  Is this new?  If I paid for this myself, why is there an issue in obtaining a copy?   I just received the contract and have not reviewed it with my lawyer.  The thing is, if the house isnt appraised where we want it to be, we want to be able to back out of the deal so how am /i suppose to give them the contract?  They have the fully-executed binder already in posession.
  • February 25 2010 - Warwick
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Answers (14)

Profile picture for nwhome.us
Something sounds a little strange.
The typical sequence of events is:
1. Prequalify for a loan based on the property that you would like to make an offer on.
2. Present the offer to the seller with an inspection and financing contingency addenda.  there are other contingencies that may apply.
3. Make the building inspection and if everything is to your satisfaction, waive the contingency.  There is frequrntly negotiation that takes place with the seller if something isn't what was expected.
4. Make final loan application, pay any "upfront fees" and the lender requests an appraisal for thier benefit.  They want to know that the loan to value is right for their own risk.
The financing addendum that you have included in your offer protects you if the appraisal comes in low.  Your lender will also refuse (or should refuse) approve the loan if the appraisal is low.  You are allowed to terminate the agreement.
The appraisal requires that an appraiser enter the seller's home.  There is no motivating reason why a seller would allow a person who has not submitted an offer to them to appraise their home.
If neither of you is using the services of an agent then each of you should have your own appraisal done.  They won't, necessarily agree.
It sounds as though you gave a deposit to a lender prematurely.  If you have not submitted an offer to a seller, you should not have made any deposit.  Your finacning contingency (addendum) shold also soecify when you will apply for a loan.  An application is typically done while you are organizing and executing the building inspection.
  • February 25 2010
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Profile picture for nwhome.us
PS.
Yes typically the lender needs a copy of the mutually accepted Purchase and Sale Agreement to process a loan application.  This is typically provided prior to the appraisal and the appraiser has a copy with him ehwn he visits of the home.
  • February 25 2010
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Profile picture for mambomami
ok...this is the thing.  The listed price was 189,900 of which we offered 185K and our offer was accepted.  On the offer binder, we asked for a 10K sellers concession, which would now bring the purchase price of the home up to 195K.  The inspection was done, and the loan process started.  The sellers want us to pay the difference if the appraisal comes up between 185K and 195K, however, that amount will be determined by the appraisal.  In order for us to commit to doing such a thing, we need to know what the appraisal of the house was...we cannot afford to come up with another 10K in cash at closing...so how do we get a copy of the appraisal to know whether or not to actually go through with and sign the purchase agreement.
  • February 26 2010
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Profile picture for nwhome.us

You should be working with a real estate attorney.  There are too many missing pieces to this puzzle for you to get any reasonable advice in this forum.

  • February 26 2010
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Profile picture for jkuhl
Hey M,

You paid for the appraisal, right?  Theoretically, it is owned by the bank, but NYS law entitles you to a copy. I'm an ex-appraiser and that was the law 10 years ago. The bank should provide you with a copy - they probably don't know the law. It's not complicated at all, but to make the bank aware of their legal responsibilities might be. I'd google around a bit and maybe call the NYS Dept of State, and see if you can get someone to confirm the law and then call the bank (best if you have the exact law). Or, to close, you will probably want a RE attorney - call around and see if one actually knows the law and then use him/her.
  • February 26 2010
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If you submitted loan docs you should have received a "Notice of right to receive appraisal".  You have a right to receive the appraisal and the lender is obligated to provide you with a copy.
  • February 26 2010
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Profile picture for Ofe Polack
Now buyers, this is what happens when you do not have a professional real estate agent working with you.  If a CMA was done prior to making an offer, there should be no surprises and the offer would have taken into consideration the same comps that the appraiser used.  Secondly, the buyer agent would have been able to deal with the lender who does not want to release the pre-paid appraisal (read the message from previous  appraiser).  Why do buyers feel that they can do better without a buyer agent, I do not know....., but here you are!  I am surprised that the sellers allowed the appraiser prior to finalizing negotiations?  Something is not right?
  • February 26 2010
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Profile picture for mambomami
I AM working with a real estate agent ( who keeps telling me she almost never gets involved in the  mortgage process) and I do have a real estate attorney.  The problem is this, the contract was given to me to review by my attorney the same day the appraisal came back.  When I called my attorney to review the contract it was already late and if you are in NY, you know there was a state of emergency upstate NY from the snow storm, where my attorney's offices are.  So I have yet to speak with her regarding this.  I have been trying to research this online but Im not getting any answers, hence, posting my question here.
  • February 26 2010
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Profile picture for mambomami
jkuhl, the lender told me that this is a fairly new rule regarding a signed contract beeing required to get a copy of appraisal.
  • February 26 2010
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Profile picture for mambomami
Also, they have not yet approved the loan (just pre-approved), they have sent it to the underwriter.  I believe we should know if we are approved sometime next week.
  • February 26 2010
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Profile picture for Ofe Polack

If you have a buyer agent and an attorney, I suggest that you listen to them, since we all come from different states and different disciplines.  Instead of helping you we may confuse you more.  In NH if a buyer is going to use an attorney to review the offer, that is done before it is send to the seller.  When the seller looks at it and signs it or counters the offer the buyer's attorney will review the offer again.  Once the offer is signed by both buyer and seller, it becomes a Purchase and Sale Agreement.  This document is then send to the lender.  It is at this point that the Home Inspection is done and if everything goes OK the Home Inspection contingency is removed and signed by both buyer and seller.  I suggest that one should not have the appraisal done until this point, because the contract may not proceed after the Home Inspection if both parties do not agree to what needs to be done to the property.  This is where I am confused.  Did you have a Purchase and Sale Agreement signed by both parties, or did you make an offer that has to be reviewed by your attorney before it goes to the seller.  And if that is the case, why was the appraisal done already?   STick to what your real estate attorney has to say.

  • February 26 2010
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Profile picture for nwhome.us
Wait for your attorney.
A "State of Emergency" is a perfectly good reason for adding more time to your agreement if you need to.
Document your attempts to reach her with a notebook or do it by email. 
Unfortunately you are asking a very specific contractual question and we don't have a copy of the agreement in front of us to refer to.
  • February 26 2010
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Profile picture for The LaPeer Team

If you paid the appraiser yourself, not through the lender, why don't you just call him and ask for a copy? My buyers pay for the appraisal at the door usually, so they own the appraisal from the get go. It sounds really weird to have an inspeciton and appraisal before the contract was executed. It doesn't matter if your Realtor doesn't get involved w/the mortgage stuff. Common sense should tell them that this isn't what is in your best interest. The lenders who I have worked with wouldn't order appraisal w/o an executed contract. Good thing you have an attorney to advise you through this.

  • February 26 2010
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You paid for a document, You get a copy, end of story. If they won't give you a copy, get your money back
  • February 26 2010
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