Are Appraisers Required to Review the Purchase Agreement?
The appraisal process is an essential part of any real estate transaction. It helps in determining the fair market value of a property, and it is an essential step in obtaining a mortgage loan. However, many people are not aware of the requirements placed on appraisers during the appraisal process. One question that often comes up is whether appraisers are required to review the purchase agreement. In this article, we will explore this question in depth.
In short, the answer is no, appraisers are not required to review the purchase agreement. According to the Uniform Standards of Professional Appraisal Practice (USPAP), appraisers are only required to analyze and report on the market data they collect. They do not have to investigate the legal documents associated with a property, such as purchase agreements or deeds.
However, this does not mean that appraisers should not review the purchase agreement. It is good practice for appraisers to review these documents, as they can provide valuable information about the property. For example, the purchase agreement may contain information about the property`s zoning, use restrictions, or easements that may affect its value.
Furthermore, if the purchase agreement contains any unusual or unique terms, the appraiser should take these into account when determining the property`s value. For example, if the buyer has agreed to pay above the asking price for the property, this may be an indication that the property is in high demand and should be valued accordingly.
In addition, the purchase agreement may contain information about any repairs or improvements that the seller has agreed to make before closing. This information can help the appraiser determine the property`s value. If the repairs or improvements are significant, the appraiser may want to wait until they are completed before performing the appraisal.
Finally, the purchase agreement may contain information about any concessions that the seller has agreed to make to the buyer, such as paying for closing costs or offering a home warranty. These concessions can affect the property`s value and should be taken into account by the appraiser.
In conclusion, while appraisers are not required to review the purchase agreement, it is good practice for them to do so. The purchase agreement can contain valuable information that can help the appraiser determine the property`s value accurately. If you are a property owner or buyer seeking an appraisal, it is important to work with a qualified and experienced appraiser who will conduct a thorough review of all available documents and data.