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Realty Reality: Does Seller Have a Right to the Appraisal?

Written by Posted On Wednesday, 08 March 2006 16:00

One of the brighter agents in our neighborhood asks this question: "Does the buyer have an obligation to provide the seller with a copy of the appraisal?"

Suppose the seller thinks, as sellers sometimes do, that the property sold "too low." Suppose further, as sometimes happens, that the seller is right. If the seller obtains a copy of the appraisal -- or is apprised of its results -- he or she may start looking for ways out of the transaction. The seller may become less than accommodating to any requests by the buyer. Certainly, in such circumstances, the seller may have less inclination to negotiate over the kinds of matters that commonly arise during the course of an escrow. If you, as a seller, learn that the property appraised for $50,000 more than the contract sale price, you probably would not be as likely to give the buyer a $2,500 credit for repairs as you might have been otherwise.

So, there could be reasons for a buyer not to want the seller to know about the appraisal. But, can the buyer withhold that information if the seller requests it?

There certainly is no law requiring that the seller be provided with the appraisal report. Nor is a lender under any obligation to provide that information to the seller. Indeed, it is questionable whether the lender has a right to provide that information to the seller, absent permission from the buyer who paid for it.

If a seller has a right to the appraisal, that right must arise from an obligation of the buyer. Does the buyer have such an obligation? That will depend, of course, on what is said in the contract between the parties.

If the contract used was the standard California contract (RPA-CA) produced by the California Association of Realtors® (CAR), there would be some reason for saying that the buyer does have such an obligation, although I think the reasoning is not conclusive.

Section 9.B. of the RPA-CA states that, "Buyer shall give Seller, at no cost, complete Copies of all Buyer investigation reports obtained by Buyer." To some, that might seem to settle the matter -- in favor of the seller. At least two points, however, need to be considered.

First of all, it may be argued that an appraisal is not an investigation in the sense used in section 9 of the California contract. Section 9 is about investigations (often referred to as the buyer's "due diligence") regarding the physical condition of the property, soils conditions, lead paint hazards, environmental concerns, zoning issues, development plans, etc. But an appraisal is not like that. It is an evaluation, not an investigation. It may result from investigations, but that is another matter.

Secondly, it is arguable that the appraisal -- even if it is an investigation -- is not the buyer's investigation. It is the lender's. The buyer has a right to obtain a copy, presuming the buyer has paid for it; but it is not the buyer's investigation. Indeed, many buyers never see the appraisal, even though they do have a right to request a copy.

So, does the buyer have an obligation to provide the seller with a copy of the appraisal? I don't think so; but that opinion and a few bucks will buy you a latte somewhere. Otherwise, we'll just have to wait for a definitive court case.

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Bob Hunt

Bob Hunt is a former director of the National Association of Realtors and is author of Ethics at Work and Real Estate the Ethical Way. A graduate of Princeton with a master's degree from UCLA in philosophy, Hunt has served as a U.S. Marine, Realtor association president in South Orange County, and director of the California Association of Realtors, and is an award-winning Realtor. Contact Bob at

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