Ask The Appraiser: Do Appraisers Know the Selling Price?


The appraiser will most likely know the selling price of a home. Why? Because the standard appraisal forms require the appraiser to enter the information, thus the appraiser will have a copy of the purchase contract.

Purchase contracts can provide valuable information to the appraiser, whether it is listed repairs, a series of counter offers to to tell a story about how the contract price was negotiated. The sales contract is just one more piece of data to be used in the appraisal process.

USPAP (Uniform Standards of Appraisal Practice) which is the standards and ethics that appraisers are subject to, states in Standard 1 (Real Property Appraisal, Development);

    When the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business

      (a) analyze all agreements of sale, options, and listings of the subject property current as of the effective date of the appraisal; and
      (b) analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal

Therefore, the appraiser will most likely know the selling price of a home but this is not always the case.

There are times that we have appraised properties for private sales where both the buyer and seller have declined to provide this information. In cases like this, USPAP Standard 2-2 viii states;

When reporting an opinion of market value, a summary of the results of analyzing the subject sales, agreements of sale, options, and listings in accordance with Standard Rule 1-5 is required. If such information is unobtainable, a statement on the efforts undertaken by the appraiser to obtain the information is required. If such information is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required.

If you have a question for "Ask The Appraiser"  send us an email at: steve@masterappraisalservices.com