Wait, I can actually talk to the appraiser? Many people are surprised to learn they can actually talk to an appraiser who is performing an assignment in a real estate purchase or refinance transaction.
For years, appraisers have been pressured to “hit a number,” or to not disclose certain characteristics of a property that may be perceived in a negative light. Some appraisers even report that some clients threaten to withhold their compensation if the appraisal does not please them. Despite such claims, it might not be accurate to characterize such actions as widespread. However, recent legislation recognizes the potential harm such undue influence could create.
In 2008, appraisal independence became an area of focus for many involved in the profession. Several states subsequently issued laws and regulations prohibiting the undue influence of appraisers. In 2010, national legislation protecting appraisal independence was created for the first time. The intent of these laws was to prohibit improper activities such as coercing or intimidating an appraiser to “play ball” by ensuring the appraised value would be sufficient for the intended transaction. While such actions are relatively rare, it was also a fairly common practice to simply not utilize an appraiser for future assignments if the client was unhappy with the results. These laws were aimed at addressing this problem as well.
Clearly, the intent of appraisal independence laws was to prohibit inappropriate communication with appraisers. However, an unintended consequence of these laws resulted in many real estate lending professionals fearing that any communication with an appraiser could be illegal. One misguided appraiser even responded to a caller (with a legitimate business reason to communicate with the appraiser), “Did you know I can have you arrested for calling me?” However, the legislation anticipated such issues by including exceptions that specifically allow for communication with the appraiser. For example, the laws specifically permit a party to the transaction requesting an appraiser to correct errors in an appraisal report, and to provide additional clarification or explanation for information in an appraisal report. In addition, these laws allow a party to the transaction to request that an appraiser consider additional information about the property, including additional comparable sales information.
In summary, communication with an appraiser is not only permitted, it is truly necessary in many instances. The Uniform Standards of Professional Appraisal Practice (USPAP), a broad set of standards for appraiser ethics and competence, require appraisers to develop a scope of work necessary to produce credible assignment results for the intended use of an appraisal report, and appraisers must also communicate a report that is not misleading and contains enough information for the intended user to understand—none of which can occur without appraisers communicating with their client.
The Appraisal Foundation has a number of resources for consumers engaged in the mortgage lending process including:
Visit The Appraisal Foundation’s Consumer Resources page for more details.