This is a simple question for the lenders/appraisers currently here. Currently looking at cashing out on one of our properties, but want to gauge the value of the property. Our current bank that we have a strong relationship with is most likely going to finance this. However, if we order the appraisal from them and another lender provides a more competitive offer, could that appraisal be transferred to the new lender?
Also, I know this varies based on each bank's policy, but how long are CRE appraisals valid for? I heard everything from 3 months to a year. Just wanted to hear from bankers here so I could get a rough idea. Thanks.
In regular SFH mortgage lending:
FHA, VA and agency (Fannie/Freddie, also called "conventional") appraisals are all transferable. FHA and VA lenders MUST transfer appraisals to other lenders upon request; the new lender must accept the appraisal. Lenders are under no obligation to transfer conventional appraisals to other lenders, who are under no obligation to accept the appraisal. The owner of the appraisal is the client--the client is the bank that orders the appraisal.
CRE/Multifamily lending:
The owner of the appraisal is the bank that orders the appraisal. They are under no obligation to transfer the appraisal and the new lender is under no obligation to accept. I'm not sure what FHA multifamily's transfer guidelines are.
Ask your lender's policy upfront about whether or not they will transfer an appraisal. But you also need to find out if your alternative lender will accept the appraisal. This is no slam dunk. The bank I worked at did NOT like to accept outside appraisals.
Relevant background: mortgage banking branch manager for 2 years; senior credit analyst for a commercial bank for 1 year.
DCD's advice is spot on, in that you should ask if the lender will release the appraisal and if the potential new lender would accept it. For example, my company has a short list of acceptable vendors for an appraisal. If you had an appraisal from one of those vendors and it could be reassigned to us, after review, we'd accept it.
The reason you've gotten a mixed response on how long an appraisal is valid is because it varies by lender. In CMBS land, an appraisal should be usable for securitization for 6 months. Of course, if you've got a dated appraisal you can typically go back to the appraiser to have it updated for a nominal fee.
That said, pulling a deal in underwriting from your primary banking relationship because someone you haven't dealt with offers you better terms is probably not a great idea.
"That said, pulling a deal in underwriting from your primary banking relationship because someone you haven't dealt with offers you better terms is probably not a great idea."
this
Yes, I know pulling a deal at that point is terrible. Actually we would ask them before we were to do something of this nature and get their opinion on it as well. The banker that we work with is a close family friend and has often even sent us to other banks in some instances that helped us with better financing terms.
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