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The lender owns the appraisal report because the lender is the appraiser's client, even though the buyer usually pays the fee. Under the Equal Credit Opportunity Act, the borrower has a right to a free copy, promptly after completion or at least three business days before closing, but not the right to reuse it elsewhere.
I am Ed Drost, a Maryland State Certified Residential Appraiser and FHA appraiser. I have appraised homes across Baltimore City and Baltimore, Carroll and Harford counties since 1989, and I answer these questions every week for buyers, sellers and families. This article is part of our Baltimore appraisal Q&A series.
Who is the appraiser's client?
In a mortgage appraisal, the client is the lender. The lender (or its appraisal management company) orders the appraisal, sets the scope and receives the report. The reason is simple: the appraisal protects the lender by supporting the value of the collateral for its loan.
Who pays is a separate question. Buyers typically pay the appraisal fee, often at the time of the order or at closing, but paying a fee does not make you the client. Think of a home inspection ordered by your lender or an insurer's required survey: someone else asked for it, and you cover the cost.
What does the law give the borrower?
Under the Equal Credit Opportunity Act and its Regulation B, a loan applicant is entitled to a copy of the appraisal used for a first-lien home loan. In general:
- The lender must provide the copy promptly after the appraisal is completed, or at least three business days before closing, whichever comes first.
- The lender cannot charge you for the copy, although it can charge for the appraisal itself.
- The lender must tell you about this right when you apply.
- You can agree to receive the copy sooner than three days before closing, but you cannot be forced to give up the right to receive it.
That is a right to see and keep a copy. It is not ownership of the report or the right to hand it to anyone.
Can you use the report with another lender?
Generally not on your own. The report is addressed to the original lender, who is the only party the appraiser is working for. If you switch lenders, the new lender will normally order its own appraisal. In some cases a lender may accept or transfer an existing appraisal with the original lender's and appraiser's permission, and FHA loans have their own case-number transfer rules, but that is for the lenders to arrange. Ask both before you assume you can reuse it, and ask your new lender before you pay for a second one.
The appraiser also owes a duty of confidentiality to the client under professional standards (USPAP), which is another reason an appraiser will not hand a report to a third party without the client's permission.
What is in the report?
- The property description, photos, sketch and condition notes.
- Neighborhood and market data.
- The comparable sales and the adjustments the appraiser made.
- The final opinion of value, its effective date and the appraiser's license number.
- Any required repairs or conditions, on loans where they apply.
Read it. If you find factual errors, see how to request a reconsideration of value.
When can you own an appraisal?
When you are the client. A homeowner who hires an appraiser directly, for a divorce, an estate, a tax appeal, a pre-listing value or a PMI removal, is the client, and the report is addressed to them. They can use it for the purpose stated in the engagement letter. For example, an owner planning to sell by themselves can order an independent pre-listing appraisal to price with confidence. That report belongs to the client, although a lender may still order its own if the buyer finances.
Common questions
Who owns the home appraisal report?
The lender owns it in practice because the lender is the appraiser's client. The borrower usually pays for it but is entitled to a free copy under the Equal Credit Opportunity Act.
Am I entitled to a copy of my appraisal?
Yes. For a first-lien home loan, the lender must give you a copy promptly after the appraisal is completed, or at least three business days before closing, whichever is earlier, at no charge.
Can I use my appraisal with a different lender?
Generally no, unless the original lender and appraiser allow it and the new lender agrees to accept it. Most new lenders order their own appraisal.
Why do buyers pay for an appraisal they do not own?
The appraisal protects the lender's loan, but the cost is passed to the borrower as part of the loan process.
Can I order my own appraisal?
Yes. If you hire an appraiser directly, you are the client and the report is addressed to you for the purpose you specify, such as pricing a sale, an estate, divorce, tax appeal or PMI removal.
Sources
This article is general information, not legal, tax or financial advice. Rules and lender procedures change and every transaction is different. Confirm current requirements with your lender, a Maryland attorney or a title company.
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