Do you have to share the appraisal if the value came in less?

[Bruce P.]

Hi all,

A bit new to the whole process. Came on a pocket listing where the realtor is acting as both the buyer's realtor and the seller's realtor (so they are getting both sides of the commission). They said that if the appraised value came in less than the agreed sales price, the news must be shared with the seller, is that true?

[Patricia Steiner]

If it appraises for less than the contract price and the buyer has an executed Appraisal Contingency as part of the contract, then the appraised value would be communicated to the seller to allow the buyer to walk with return of full escrow.  The seller could at that time agree to lower the price to the appraised value to continue with the sale if that's agreeable with the buyer.

However, if there is not an appraisal contingency or there is but the buyer does not want to cancel the contract as a result, no - there is no obligation to share the appraisal.

The appraisal is the property of the buyer; the buyer pays for it.  The agent has no right to that information unless the buyer intends to cancel the contract as a result of the valuation and has the contractual right to do so.  

Hope this helps...