I recently fell out of escrow on a multi-unit property. The appraiser absolutely DID see the contract. I was told it is required but I still can’t see why the contract should have any bearing on an independent opinion of the property value.
Much as there was lender pressure to “hit the number” during the bubble, I believe there is government pressure to “hit the number” in this down market. I was told that if appraisals vary by more than some certain percent (I can’t remember exactly how much) from the contract price, they are flagged by the government as potential bad appraisals or fraudulent. I believe this is creating pressure to hit the contract number.
In my case, all three appraisal values were almost exactly the same as my contract price. Somehow evaluating the property based on comps, rental value, and replacement value each yielded almost exactly my offer amount. Based on this experience I view the appraisal as completely worthless and I am really irritated I had to pay for such garbage.
There is NO justification in my mind for appraisers to see the contract. That destroys any hint of impartiality, especially if I am correct about government pressure to “hit the contract number”.
