One of the most common questions that homeowners ask about a real estate appraisal is, “Will the appraisal report be shown to others?” Homeowners are often concerned that an appraisal done for a lender or private party might also be available to the tax assessor or to someone else with no need for such private information. The homeowner’s fear is very understandable. My answer to the question is always, “Absolutely not.”
Real estate appraisers are licensed and certified professionals, held to strict ethical requirements under the Uniform Standards of Professional Appraisal Practice (USPAP). The Ethics Rule of USPAP states, “An appraiser must protect the confidential nature of the appraiser-client relationship.” An appraiser cannot disclose the confidential information or the assignment results to anyone other than the client, people who have been authorized by the client, regulatory agencies, third parties under due process of law, or a duly authorized professional review committee.
Here are some interesting points on appraiser ethics and confidentiality rules.
Appraisers cannot provide homeowners with the appraisal value or analysis unless the homeowner is named as a client, or the client has specifically given permission to the appraiser. This is even true if the homeowner paid for the appraisal but the lender engaged the appraiser and is listed as the client. However, conventional lenders are required to provide a copy of the appraisal to the homeowner prior to closing under Appraiser Independence Requirements. A common frustration for real estate agents or homeowners occurs when there is a problem with the appraisal, but the appraiser refuses to answer to anyone but the lender. The appraiser can and should gather information from homeowners and real estate agents, but the appraiser can only provide analysis to the client.
Once an appraisal is completed for one bank or client, the appraiser cannot simply readdress or change the client name and provide it to another bank or client. However, the appraiser can engage with a new client to appraise the same property under a new assignment without disclosing any confidential information from the previous assignment.
Appraisers are required to disclose if they have appraised a particular property in the past. However, appraisers cannot disclose confidential information about the previous appraisal such as the client, the purpose, the results, or sales contracts.
Appraisers cannot provide a sample appraisal report to a prospective client without authorization from the previous client or after removing confidential information. Providing sample work is routine in the appraisal industry, but appraisers need to be cautious that the strict USPAP ethics rules are not violated.
Did I leave anything out or do you want to join in the conversation? Let me know in the comments below.
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