Appraiser requesting Inspection Report - Should I?

[Mohammed S.]

Hi BP members,

Need your advice. 

I am in the final phases of a feasibility period for a 12 unit multi-family Class C property. The appraiser from the bank asked me to send the Inspection Report (which I had gotten done on the property at my expense) to him. I am debating whether I should do that since I dont want the content of the inspection report to color his opinion. On the other hand, I dont mind giving the appraiser an extra data point to validate his findings. My realtor discouraged me to share the inspection report.

What is the normal practice when purchasing a multi-family - is this a typical request? What are the pros and cons of sharing the inspection report?

Please let me know,

Thank you in advance for your view points.

[Bill Gulley]

Yes, in commercial it is common. Send the report. If one exists, as they know one does and not sending it appears as if you are trying to hide something. Compliance is your best choice. The appraiser can simply ask the lender to provide one and they can require you to obtain it, their choice of an inspector can be more stringent.

You are also to comply with reasonable requests from your lender, any inspector or appraiser, any title company or closing agent and you contract likely has recitals concerning your performance as to usual, customary and acceptable cooperation to accomplish a timely settlement, often with time being of the essence.

Your Realtor fears the worst and seems to be looking out for a commission, that was bad advice.

A deficiency is not a deal killer (it can be and your lender is protecting themselves as well as you, may not see that, but they do), you can repair small issues prior to settlement. If the appraiser believes there is a matter effecting value, that matter can generally be cured, someone will be given the opportunity to cure that matter.

What the report will show is deferred maintenance and condition for adjustments, unless the place is a dump it shouldn't cause significant adjustments.

In a purchase transaction, I believe most appraisers want to be fair and accurate, they want to CYA, but they try to let a deal proceed as agreed, unless there really is an issue.

So, comply and do so in a timely manner!  :)