Appraiser Ethics & Conduct
Appraisal is a licensed profession, and appraisers are professionals who are bound by ethical considerations.

An appraiser's primary responsibility is to his or her client, whether that client is the lender ordering the appraisal to decide whether to make the mortgage loan or to the homeowner - buyers and sellers - seeking an appraisal as the means to a more informed decision when coming to terms on the Market Value of a given parcel of real estate.  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 included somewhere in the appraisal report itself. An appraiser's fiduciary duty is limited to those third parties who the appraiser knows, based on the reason for the appraisal which is included in the written request for the appraisal assignment.  This is known as the Scope Of Work.

There are ethical rules that have nothing to do with clients and others.  Appraisers must keep their work files for a minimum of five years, for example and cannot share personal information.  These rules, among others, are listed in USPAP (Uniform Standards of Professional Appraisal Practice).  Appraisers must follow these laws, both verbally and in the written report, or risk being penalized or possible losing the ability to perform appraisals in the future. 

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.  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, in addition to the universal appraisal laws included in USPAP.

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.  

An example of the effects of the appraisal industries failures to follow these rules and regulations have been felt by most US citizens when the Real Estate Market took a nose-dive in the last quarter of 2006.  Not only have real estate market values been affected; the banking industry as a whole, the ability of the average consumer to obtain credit, the investment industries, among many other economic elements, have been affected by poor ethical practice and conduct.  Four years later, the southwest Missouri market is still dealing with the residual effects of poor appraisal practice where local appraisers, brokers and lenders are under federal indictment and face stiff fines and possible jail terms for causing the foreclosures of many area homes and real estate.  These foreclosures have the potential to drive down property values in the affected market and have in some areas Southwest Missouri.  The HVCC and other federal, state and local laws have been implemented to insure that this fiasco doesn't happen again. 

As we enter the second quarter of 2010, local markets are on the mend but there is still much work to be done.  This is where we can be of service to you, our client and the Real Estate Industry as a whole, through professional and ethical conduct in performing appraisal assignments.  You can be assured of 100 percent ethical, professional service from the Certified Residential Appraisers who work with Associated Appraisers.