Valuation Management Group is actively working to stay on top of all trending appraisal and appraisal management services topics. One topic that has received much discussion recently is the change in sales price after the effective date of an appraisal report. We have received many questions from both clients and appraisers on how this issue should be properly handled. Does this require a new appraisal assignment? Or can the appraiser just merely change the sales price on the cover page of the existing report?
Fannie Mae recently provided guidance, as follows:
“Currently, we require the lender to provide the appraiser with all amendments made to a sales contract, including amendments that are made after completion of the appraisal. With this update, we have clarified when the appraiser must be provided with updates to the sales contract and circumstances that warrant updates to the appraisal. For example, if the contract is amended in a way that affects the description of the real property used by the appraiser, then the lender must provide the updated contract to the appraiser and the appraisal should be updated. However, minor updates to the contract, such as changes to seller paid closing costs or changes to the contract price, do not require an updated appraisal. In addition, we have updated the policy to require disclosure of changes to financing information (such as loan fees and charges, and subordinate financing provided by interested parties) to the appraiser only for purchase transactions. This policy update is effective immediately.”
You can read other parts of the announcement as well as the following link: https://www.fanniemae.com/content/announcement/sel1609.pdf
While not all appraisals are sold to Fannie Mae, their guidance is typically considered the industry standard for residential appraisals. Valuation Management Group believes superior appraisal management services include assisting clients and appraisers as questions arise. Feel free to contact us with questions.
Commercial purchase contracts are only occasionally revised after the completion of the appraisal report. Should there be changes to the contract during the appraisal process, Valuation Management Group suggests that the contract be provided timely, so the appraiser can be informed of the changes in order to deliver an accurate appraisal report.
Valuation Management Group strives to make sure our personnel, our clients and their personnel, and our utilized appraisers are knowledgeable to all industry updates and news. We are sensitive to and understand compliance issues and information necessary for credit decisions in all disciplines of appraisal. Discussion of this topic is another way Valuation Management Group is attempting to improve mutual understanding and communication between a client, appraiser and VMG staff members so we all operate in an effective and fully-informed environment.
Valuation Management Group is a national, full service appraisal management service company that manages the appraisal process for financial institutions, banks, mortgage bankers, and credit unions. We offer the full array of commercial and residential appraisal products and services. We take the appraisal process from ordinary to extraordinary.