As a buyer - modest 7 figure buy - is it reasonable to expect seller to provide a copy of a 'recent' appraisal

In addition to NOI, my source for financing requires an appraisal. I, necessarily, must "see" the property from the same perspective as my lender. So, is it reasonable for seller to provide me with a recent - six month - appraisal?
In Buying Property - Asked by Rene G. - Feb 1, 2011
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barry c.
Scottsdale, AZ

hi rene ;yeh man ;it is reasonable to show u the appraisal ;maybe because of location and market conditions it may be in your interest to get an app yourself ;once you tell the owner that ;you may be surprised by the reply;however if the owner does not have a recent app he may be too shy to get one done ;so u should go ahead ;good luck barry

Feb 1, 2011
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Alex L.
Developer
San Diego, CA

The lender will order his own appraisal no matter what, you can ask for a previous appraisal as part of your due diligence, but in terms of your lender, this appraisal will be useless. The only time we were able to use a previous appraisal was with some hard money lenders where the LTV was pretty low and quick funding was required.
Your lender will have a totally different "perspective" than you: you might be OK with 5% cap rate, but your lender might require valuation of the property with at least 8% cap rate or higher, which will kill the value and will increase your LTV. This is really the biggest issue with commercial lending now: it's not that the money is not available, it is, it's the minimum cap rate requirement changed and it changed values and LTV's.
Also, check the reason for the seller's appraisal 6 months ago: was it done for a refi that didn't go through? or did the seller purchased and rehabbed the building 6 months ago? or was it just an FYI appraisal so that the seller could give it to to the buyer and justify higher price? Either way, a commercial appraisal is not cheap, and a seller wouldn't spend $2k-4k with no reason, and knowing that reason might give you some negotiating power.
Good luck

Feb 1, 2011
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