Ask Henry

Appraisal Changes

Dear Mr. Harrison,
If contract revisions occur after the date of the appraisal and the lender has furnished a new contract, should these modifications be made to the contract portion of the appraisal to reflect a change in seller contribution, etc.? Or must the appraisal be entirely based on information obtained as of or before the effective date of the appraisal?

Best Regards,
Todd Floyd

Dear Todd,

The requirement is that the lender supply you with their latest ratified version of the sales contract. This usually has no impact on your estimate of the market value in the appraisal. As part of your scope of work dialogue with the lender, you should agree on the effective date of the appraisal. There is no Fannie Mae or Freddie Mac regulation that I am aware of that prevents you from using information about things that happen after the effective date of the appraisal. However, when you incorporate this information, you should carefully explain in the appraisal what you have done so that there is no room for confusion or misinterpretation.