The Real Estate Appraisal Process

Thank you for allowing Gloria Fraedrich Appraisal Services to perform the appraisal of your property.  It is our mission to provide our clients with quality work that exceeds state and federal requirements.  We strive to be an independent 3rd party in your loan process, as congress intended in 1991 when they passed legislation concerning the lending industry, known as Title XI, and the Uniform Standards of Professional Appraisal Practice (USPAP).

The Appraiser-Client Relationship

There is a common misperception that the appraisal is intended for (and is the property of) the property owner.  Actually, most appraisals, including any for financing of a loan, are the Exclusive Property of the lender named in the report, regardless of who pays the appraisal fee.  An appraisal fee paid by the borrower is a risk that a borrower accepts during the process of applying for a loan, and is intended as payment for the service of determining a market value for your property as required by your lender.  It is Very important that you understand that we, as the appraiser, are bound by federal law to share our findings Only with the lender named in the report.  If you would like a copy of the appraisal report, you must request it from your lender.  In our experience, most lenders are accommodating to this request.

The Appraisal Fee is not tied to a Pre-Determined Value

It is against federal law to accept payment for an appraisal assignment in which that payment is tied to the achievement of any pre-determined value.  This practice is considered loan fraud by the federal government, and can result in immediate suspension or revocation of the appraiser’s license.  Please note that although we may be aware of an estimated value provided by a loan officer or borrower, our completion of this appraisal is based on the factual historical sales, cost and/or income data of your market only.  We do not consider loan-related issues, such as L-T-V ratios, credit score, or even the findings of a previous appraisal when issuing our final value opinion.

The Appraisal Fee is for This Appraisal Assignment Only

Occasionally we are asked to “sign over” an appraisal completed for lender “A” to new lender “B”.  This is an illegal practice per USPAP guidelines.  The reason is tied to the Appraiser-Client relationship described above.  It is also important to note that the appraisal fee received for this assignment is for This Assignment Only.  Should you require another appraisal, whether for a new lender, or for the same lender at a later date, there are several steps your appraiser needs to take to ensure compliance with USPAP guidelines, and each new assignment will require a new appraisal fee based on the additional work involved.

We thank you for allowing us to complete this serious and important step in your loan process.  We take our responsibility very seriously and appreciate your understanding of our role in the lending process.

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