What the homeowner needs to know:

Relationships:

When a homeowner or borrower is working with a Bank, Broker or other Lending agent or institution, the homeowner/borrower is the client of that agent or institution. This relationship exists because of the institutions desire to extend a loan or other financial service which is also desired by the borrower.

Banks, Brokers and other Lending agents or institutions often require an appraisal to establish the value of the property. A State licensed appraiser is usually required to perform the appraisal service. In doing so the appraiser is acting as an independent third party to establish a value relative to the circumstances of the financial arrangement between the lender and borrower. The appraiser is usually not a party to the deal between the Lender and the Borrower except to perform the appraisal.

The appraisal firm usually receives the appraisal order from the Lending agent or institution which makes that agent or institution the appraisers Client, not the borrower or home-owner. This distinction is defined in the Uniform Standards of Professional Appraisal Practices (USPAP) which is the legal guidelines for performing appraisal services.

Limitations on Communications:

The USPAP requires the appraiser/appraisal firm to communicate the details of the appraisal and related information only with the Client of record for each and every appraisal order. This means that the Appraisal firm cannot communicate with anyone other than the Client of record. This excludes of course the inspection period when information is being gathered to develop the appraisal report.

In cases where a homeowner orders an appraisal from the appraisal firm directly--the homeowner is then the client of record. In this case the finished appraisal is delivered to the client and supporting information can also be communicated and shared. However, should the homeowner desire to use the appraisal in a business transaction, the lender will often request that the appraisal be changed with the lender as the Client-of-record. This is done to allow the Lender to directly hold the appraisal firm responsible for the contents of the appraisal. The reality is that lenders can use original appraisals but their own internal rules require them to have their name as the client-of-record on the appraisal.

Payment of the Appraisal fee:

It is common in the conduct of business that the borrower which is the client of a Lending agent or institution pays for the appraisal at the time the appraiser performs the property inspection COD, or at Closing or in some cases the Lending institution may elect to pay for the appraisal and will later collect from the homeowner/borrower. Because the homeowner/borrower is paying for the appraisal they assume this means they are entitled to get a copy of the appraisal from the appraisal firm. This is not true unless they are the Appraisers client of record. The homeowner may be entitled to a copy of the appraisal from their lender.

Non-payment of the appraisal fee can sometimes hold up closing on the financial transaction. Non-payment can also result in legal action and among the remedies available is the ability to place a lien on the property of the borrower failing to pay. Non-payment sometimes results because of miscommunications between Lender and Borrower or simply because the borrower did not like the value as determined by the appraiser.

Contingency Appraisal Assignments:

Techcorps Real Estate does not accept appraisal assignments where there is a requirement to return a set or pre-agreed value. This is illegal and Techcorps will not accept such assignments.