Is it legal that we're not allowed to see the appraisal we paid for because it came in low and the seller now refuses to sign the P&S?

Asked by katiedog37, Middlesex County, MA Sat Jun 23, 2012

I’m curious if anyone else has run into a similar problem and looking for advice on what we can do here. We are in the process of purchasing our first home. We’ve gone through all the proper steps so far and everything seemed great until the appraisal came in low- suspected to be approx. $13,000, or about 7% of the agreed upon price. The seller will not come down at all and wishes to walk away from the deal. We will now be out the money we’ve paid for home inspection, appraisal, credit application, etc. (approx $1300). The mortgage company will not release the appraisal report without a fully signed P&S, which we have signed, but the seller has not since they have decided to walk away from the deal. My concern is that we paid $700 for an appraisal that we’re not allowed to see. If you pay for something, shouldn’t you then receive the thing you paid for? I understand the appraisal was done and the appraiser needs to be paid, so I can see why they won’t refund our money,

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Michael’s answer
Michael, Both Buyer And Seller, Billerica, MA
Sun Jul 1, 2012
In two states, MO and CT, where I have purchased and sold property the appraisal goes to the buyer not the seller. In MA when I purchased my home I also got the appraisal not the seller. It came in under value and I was able to negotiate a lower price, but the seller could have refused and walked away from the deal. In your case why would the seller care what the appraised value was if you wanted the house at the agreed upon price? The bank however would require you to make up the difference in your down payment. Are you sure the appraised value didn't come in higher and the seller thinks they can get more for the house? Without a signed P&S you may not have much recourse. Consult a real estate attorney.
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Territory.c…, Agent, MA,
Mon Jun 25, 2012
Usually banks won't do an appraisal without a signed P&S and usually the buyer pays the appraisal at the closing so I am a little confused by this process/chain of events. It is also our understanding that the lender is required to give you the appraisal (especially if you already paid)
Consult your exclusive buyers agent and your attorney to get further details on your rights in this scenario.

Good luck!
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Andrew Adams, , 01915
Sat Jun 23, 2012

The Client is the lender and not the borrower. However the Home Valuation Code of Conduct requires the lender to provide a copy of the appraisal. The link to Fannie Mae's Q&A is below - Page 10 has a few Questions that apply to this situation.
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Louis Wolfs…, Agent, Needham, MA
Sat Jun 23, 2012
Andrew correct me if I am wrong. The client is the lender not the buyer and it is the client that has to be satisfied. That the client upon closing can provide a copy of the appraisal to the borrower. In this case the property never closed. I do understand that it is more common than not to provide the appraisal to the borrower and their agent so that if there is a dispute it can be reviewed.
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Joyce Lin, Agent, Leominster, MA
Sat Jun 23, 2012

Did you have a Buyer Agent? If so, what is their take on it?

Did you have an Attorney, again, what are they saying?

It makes no sense (as others have said) that an Appraisal would be ordered prior to having signed the P&S. As others have said - you paid for it - it is yours.

In MA, a Buyer has 10 days from Offer to get their Home Inspection and sign P&S.

$700 for an Appraisal is pretty steep, I thought $450 was bad.

Did you go with a local bank or an on-line entity like "Lending Tree"?

3-4 years ago, I had an Appraisal come in $17,000.00 below and we managed to make the deal work, but both sides wanted the deal to move forward.

Lastly - if you do not already have an Attorney, get yourself one that specializes in Real Estate ASAP!

Please do update on how things are going.

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katiedog37, Home Buyer, Middlesex County, MA
Sat Jun 23, 2012
To answer some of your questions: No, we weren't in a rush. I have no idea why the appraisal was done before the P&S was signed. It was never discussed when it would be done. The $700 was not to lock in our rate, that was dealt with separately. Lastly, we never even discussed with the buyer about coming down or anything. There has been no discussion since the appraisal, other than that they are walking away. We are first time buyers, so perhaps we should've asked more questions.
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Greer Swiston, Agent, Newton, MA
Sat Jun 23, 2012
Not only do you have a right to a copy of the appraisal, the seller should be asking for a copy of the appraisal to since it would seem to put a serious kink into the deal ... unless this was not a surprise to the seller? I presume you had a lawyer who was working on the P&S for you? Ask your attorney ... You may have a case against the seller.

However, I agree with Andrew ... the scenario sounds a bit odd. Rarely is an appraisal completed until AFTER the P&S is signed. Why did the lender run the appraisal before a P&S was signed? How can an appraisal be done before seeing the full P&S? Were you in a rush? Why did it take so long to run the appraisal? Usually, one does not even have to start the lending process until after the appraisal is signed. However, some buyers do pay the lenders' ahead of time if they wish to lock at a particular rate. Is that what you did? $700 may have been to lock in your mortgage rate.

Simple answer to your question is that yes, you should get what you had paid for. However, the question is ... why did you pay for an appraisal before the P&S was signed?
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Connie Mitch…, Agent, South Padre Island, TX
Sat Jun 23, 2012
Wow, this is very surprising and certainly raises an eyebrow. I am in agreement with the other posts, if you have paid for an appraisal, they are required to give you a copy.
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Andrew Adams, , 01915
Sat Jun 23, 2012
The scenario makes very little sense. If you have paid for the appraisal the lender is required to provide you a copy (if it was done). Why are the sellers walking away? Have you told them they have to reduce the price or you won't move forward.

I feel like we are missing some important details.
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Joe Arnao, Agent, Sanwich, MA
Sat Jun 23, 2012
My buyer clients usually get a copy of the appraisal.
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Patty Radford, Agent, Centerville, MA
Sat Jun 23, 2012
I agree. You paid for it, it's yours. There is no rule that states you have to have a signed P&S to receive something you already paid for. I would speak with the appraisal company and the lender. Then if they still won't give it to you go to the real estate board and the Massachusetts Division of Licensures and put in complaints. You will then get your answers.
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Shanna Rogers, Agent, Murrieta, CA
Sat Jun 23, 2012
Hi katiedog37,

If you've paid for the appraisal, you own it. Contact the appraiser if your lender won't give you a copy. I would talk to your lender again - maybe there's some miscommunication somewhere on their side? If they don't want to give you a copy, then don't pay for it - they can.

Shanna Rogers
SR Realty
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