Selling Guide

Published August 29, 2017

B4-1.1-05: Disclosure of Information to Appraisers (12/06/2016)

This topic contains information on lender disclosure of information to appraisers, including:

Overview

Any and all information about the subject property that the lender is aware of must be disclosed to the appraiser. The appraiser must determine if the information could affect either the marketability of the property or the opinion of the market value of the property.

Sales Contract Information

All financing data and sales concessions for the subject property that will be or have been granted by anyone associated with the transaction must be disclosed to the appraiser, as appropriate. Typically, this information is provided in the sales contract. Therefore, the lender must provide, or ensure that the appraiser is provided with, a copy of the complete, ratified sales contract and all addenda for the property that is to be appraised.

Information Disclosed to the Appraiser

Financial Information

The list below includes items that must be disclosed to the appraiser on purchase transactions, if applicable:

  • settlement charges,

  • loan fees or charges,

  • discounts to the sales price,

  • interest rate buydowns,

  • below-market-rate financing,

  • terms of any subordinate financing provided by interested parties,

  • credits or refunds of borrower expenses,

  • absorption of monthly payments,

  • assignment of rent payments, and

  • any other information not listed above that impacts property value.

Property Information

The list below includes items that must be disclosed, if applicable:

  • condo or PUD fees;

  • non-realty items included in the transaction;

  • any environmental hazard in or on the subject property or in the vicinity of the property that the lender is aware of or learns from the borrower, the real estate broker, or any other party to the transaction (see B4-1.4-08, Environmental Hazards Appraisal Requirements); and

  • any other items that affect the safety, soundness, or structural integrity of a property of which the lender may be aware.

Contract Changes After the Appraisal is Completed

If the contract is amended after the effective date of the appraisal in a way that does not affect the description of the property, then the lender is not required to provide the amended contract to the appraiser nor obtain a revised appraisal. Some examples of amendments that do not require the lender to provide the amended contract nor obtain revisions to the already-completed appraisal report include:

  • sale price,

  • transaction terms,

  • financing concessions,

  • seller-paid closing costs,

  • names or initials,

  • closing date, and

  • correction of minor clerical errors such as misspellings.

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcements Issue Date
Announcement SEL-2016–09 December 06, 2016
Announcement SEL-2014–03 April 15, 2014
Announcement 08–30 November 14, 2008