MI Value Pros
REAL ESTATE Appraisal, consulting, Brokerage & investments
Appraisals are specific to the original intended use and user of that appraisal. For example, if an appraisal was ordered for mortgage financing, that appraisal would be completed with the lender's underwriting guidelines in mind and this may have placed some limitations on comparable selection and analysis and reconciliation processes. If an appraisal is ordered by the private homeowner for the intended purpose of establishing a listing price - the appraiser may place higher emphasis on supply/demand and listing competition. If ordered for insurance purposes - higher emphasis would likely be on the cost factors, and appraisals performed for settling an estate typically are "backdated" to a prior point in time. Therefore, each of these "uses" could potentially result in different value opinions. It would be prudent to obtain a new and current appraisal specific to each use or transaction.
The real estate market is fluid, and ever-changing. Market conditions are sensitive, and certain circumstances and events could impact property values even within a matter of a day. In addition, our market area is highly seasonal in nature and market indications during winter months may be significantly different than that of the summer months. For these reasons, lenders commonly require a new appraisal with each transaction despite very recent prior appraisals. As a rule of thumb, a new appraisal is highly recommended after 6 months.
If your appraisal is intended for mortgage financing, including new purchase, refinance or HELOC - then your lender is responsible to provide this to you. The appraiser is restricted from disclosing any appraisal information to anyone other then the client. The appraiser has a fiduciary responsibility to their client, and agrees to confidentiality and privacy clauses within the order engagement process. The client is identified as the party who has selected and engaged the services of the appraiser, and whose interests the appraiser is tasked to protect by estimating and communicating the value and marketability of the intended collateral.
This client relationship may include an Appraisal Management Company, or "AMC", who acts on behalf of the lender in the appraiser selection and oversight process. Even if you "pay for the appraisal" within the application or closing fees, this is something that is negotiated between you and the lender and may actually include the AMC costs as well. This does not mean that a client relationship has been established between you and the appraiser.