Why Does the Appraiser Need the Sales Contract?

When it comes to appraising a property, appraisers must take into account all agreements of sale. According to Standards Rule 1-5 in the Uniform Standards of Professional Appraisal Practice (USPAP), we are required to analyze any contracts for sale. That's why it's important for the appraiser to receive a copy of the sales contract.

 By viewing the contract, the appraiser may be able to identify irregularities and comment on them. For example, if the contract includes provisions for concessions, non-real property items included in the sale, or other unusual conditions, the appraiser may need to comment on these provisions in the appraisal report to explain why there is a difference between the indicated market value of the subject property and the contract price.

 The appraiser is likely familiar with the local real estate contract forms, customary terms, and conditions of real estate transactions in the area. This familiarity enables the appraiser to better understand the specifics of the contract and identify any unusual terms that may need to be addressed in the appraisal report.

In summary, providing a copy of the sales contract to the appraiser is essential to ensure an accurate appraisal. Appraisers are required to analyze all agreements of sale. Understanding the specific provisions of the sales contract is critical to producing an appraisal report that accurately reflects the property's value. By providing the appraiser with the sales contract, homebuyers can help ensure that the appraisal report is reliable and based on accurate information.