I am afraid that you folks need to check the law. Simply call your favorite appraiser for an explanation. Whoever "ORDERS" the appraisal, owns the appraisal. Not who pays for it or the buyer.
That is why so many lenders will "ORDERâ€ the appraisal, because that locks the buyer to that lender.
Allow me to expand on that answerâ€¦..
(LENDER) â€¦No..noâ€¦let me take care of that for you. Iâ€™ll call my buddy JIM over at my favorite appraisal company. He normally charges â€œMY CLIENTSâ€ a discounted rate of â€œONLYâ€ $350.00. so let me get that as part of my service. ..
(BUYER) Why, that is awesome and you are such a great lenderâ€¦taking care of all my needs like thatâ€¦.I just canâ€™t thank you enough.
(LENDER) Noâ€¦Hey itâ€™s part of my job and I really donâ€™t mind. Just send a cheque to my office for the fee and I will handle it. Make the check out to Jimâ€™s appraisal service. Because you see, it doesnâ€™t really matter who PAYS for the appraisal.
(BUYER) OK, a cheque for 350 is in the mail. Thanks again, Bob the Lender!
â€¦â€¦â€¦â€¦.six weeks laterâ€¦â€¦â€¦..
(BUYER) Hey Bob, itâ€™s me buyerâ€¦I found a much better rate and I am going to go with this other lenderâ€¦now I need my appraisal so I can still close on timeâ€¦.But we can still be friendsâ€¦.rightâ€¦â€¦hockey ticketsâ€¦&....sno-conesâ€¦.?????
(LENDER) Sorry bob..â€¦You see, since I ordered that appraisal, The Financial Institutions Reform and Recovery and Enforcement Act has established that whoever â€œOrders the appraisal, owns the appraisal and since, I, Bob the lender, did indeed order said appraisal, I own said appraisal. If you want to use another lender you must order another appraisal.
(Weâ€™re back in the real world here, folks)
Now, I was a little over dramatic in this illustration, but that is who owns an appraisal.
I have personally fired several Mortgages brokers for conducting business this way. I donâ€™t like it and I donâ€™t condone it. It does happenâ€¦..BUTâ€¦most reputable Mortgage Brokers will not do business in this fashion. If your s is, I highly encourage you to consider a change.
Gary De Pury
Bay Vista Realty
Director, Florida Association of REALTORSÂ®
Chairman, Communications Committee.