Real Estate Appraiser Ethics

It is so difficult to become a licensed appraiser these days. In  fact, this is why appraisal is now considered to be more a profession  than a trade. Accordingly, there are now some strict real estate appraiser ethics to be followed in the appraisal profession.

An appraiser’s responsibilities

The appraiser is always obligated to their client, and no one else.  It is the lender, or their agent who places an order to the appraiser  for a normal residential appraisal, who in turn becomes the appraiser’s  client.

Appraisers are generally to disclose all of their observations only  to their client and no one else. This means that homeowners who want to  review the appraisal document have to get it through the lender, and not  the appraiser.

An appraiser’s other responsibilities include maintaining numerical  accuracy on assignment parameters and in maintaining a professional  attitude and level of competency and education.

Appraisers may also have fiduciary responsibilities to third parties  like buyers, sellers and homeowners, who have been defined in the scope  of the appraisal assignment.

The appraiser’s fiduciary responsibilities are limited to third  parties they know, which is dependent on the scope of their work and  other related things in the job’s framework.

Appraisal ethics standards

There are some appraisal ethics standards that are not connected to clients and others. For example, it  is important that appraisers maintain a backup of all their work files  for a minimum of five years.

Appraisers also have to follow high ethical standards while creating  their reports. This means that they cannot do assignments based on  contingency fees.

In other words, this means that they can’t do appraisals, and collect  the loan closing contingency fees. It is a conflict of interest for an  appraiser to report a greater value and to get paid more money.

The Uniform Standards of Professional Appraisal Practice or USPAP  states a violation in ethics for accepting conditional assignments that  may deliver a pre-determined result or favor the client’s cause, or the  opinion of value amount, or other similar situations.

All appraisers should follow the USPAP as part of their real estate appraiser ethics to provide an accurate home or property valuation.