Appraiser Engagement

Real Estate Agents and other certain parties do not get to influence what Appraiser completes an assignment. For this to be allowed would break the law. A typical strategy employed is to question the Appraisers competency when they get someone they don't know. This is an attempt to control the Appraisal process, which cannot be done. The Apprisal Process and the AMC's job managing it is to comply with Appraiser Independence Requirements. Section IV "Appraiser Engagement" states the following:

(a) The Seller or any third party specifically authorized by the Seller (including, but not limited to, appraisal companies, appraisal management companies,    and Correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The Seller will not accept any appraisal report completed by an appraiser selected, retained or compensated in any manner by any third party (including Mortgage Brokers and Real Estate Agents).

  • This means Real Estate Agents have ZERO say in the Appraiser chosen to complete an assignment. An Appraisers competency to complete an assignment is for him or her to decide, not the Real Estate Agents. When an Agent gets involved, this is an attempt to control the Appraisal Process and that is a violation of the Appraiser Independence Requirements. Real Estate  Agents DO NOT get to interview the Appraiser as if they can influence whether or not the assigned Appraiser gets to complete the report or not. So, the best thing for an Agent to do is not ask any questions. Questions make the Appraiser ask "what is wrong with this deal that the Agent is getting in my ear".

(b) There must be separation of the Seller's sales or Mortgage production functions and appraisal functions. An employee of the Seller in the sales or Mortgage production function shall have no involvement in the operations of the appraisal function.

  1. Certain parties are prohibited from:
  • Selecting, retaining, recommending, or influencing the selection of any appraiser for a particular appraisal assignment or for inclusion on a list or panel of appraisers approved or forbidden to perform appraisals for the Seller; and
  • Having and substantive communications with an appraiser or appraisal management company relating to or having an impact on valuation, including ordering or managing an appraisal assignment.

These parties are:

  • All members of the Seller's Mortgage production staff;
  • Any person who is compensated on a commission basis upon the successful completion of a Mortgage; and
  • Any person whose immediate supervisor is not independent of the Mortgage production staff and process.