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An appraiser's primary responsibility is to his or her client. Normally, in residential practice, the appraiser's client is the lender ordering the appraisal to decide whether to make the mortgage loan. Appraisers have certain duties of confidentiality to their clients -- as a homeowner, if you want a copy of an appraisal report, you normally have to request it through your lender -- obligations of numerical accuracy depending on the assignment parameters, an obligation to attain and maintain a certain level of competency and education, and must generally conduct him or herself as a professional. Here, we take these ethical responsibilities very seriously. Appraisers may also have fiduciary obligations to third parties, such as homeowners, both buyers and sellers, or others. Those third parties normally are spelled out in the appraisal assignment itself. An appraiser's fiduciary duty is limited to those third parties who the appraiser knows, based on the scope of work or other written parameters of the assignment. We only perform to the highest ethical standards possible. We don't do assignments on contingency fees. That is, we don't agree to do an appraisal report and get paid only if the loan closes. Please see the exerpt from USPAP below that discusses contingency fees. We don't do assignments on percentage fees. That is probably the appraisal profession’s biggest no-no, because it would tend to make appraisers inflate the value of homes or properties to increase their paycheck. We don't do that. Other unethical practices may be defined by state law or professional societies to which an appraiser belongs. The Uniform Standards of Professional Appraisal Practice (USPAP) also defines as unethical the acceptance of an assignment that is contingent on "the reporting of a pre-determined result (e.g., opinion of value)," "a direction in assignment results that favors the cause of the client," "the amount of a value opinion," and other things. This means you can be assured we are working to objectively determine the home or property value. You can be assured of 100 percent ethical, professional service. Appraiser Standards I. Readdressing (Transferring) a Report to Another Party The issue... After an assignment has been completed and the report has been delivered, an appraiser may be asked to "readress" (transfer) the report to another party. Client #1 may have even given consent to release the appraisal to Client #2. Does USPAP allow an appraiser to "readress" (transfer) a report by altering it to indicate a new recipient as the client or additional intended user when the original report was completed for another party? Advice from the Appraisal Standards Board (ASB) on the issue... No. Once a report has been prepared for a named client(s) and any other identified intended users and for an identified intended use, the appraiser cannot "readdress" (transfer) the report to another party.
II. Contingecy Fees The issue... A potential lending client wants to arrange for appraisal fees to be paid at the closing of each financing transaction. Does USPAP permit this fee arrangement? Advice from the Appraisal Standards Board (ASB) on the issue... In the situation described there must be a clear agreement that the fee cannot depend on the closing of the financing transaction. Accepting an assignment where the appraisal fee is paid only upon successful closing of the transaction is a violation of the Management section of the ETHICS RULE: "It is unethical for an appraiser to accept an assignment, or to have a compensation arrangement for an assignment, that is contingent on any of the following:
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Appraiser Ethics