There has been a recent increase in the number of concerns and questions surrounding the topic of “Re-addressing an Appraisal Report” or issuing a “Letter of Transmittal” by our members.
The typical scenario is that an appraisal report has been sent to a Broker or AMC and in the following days a request for a Letter of Transmittal is received from the Broker or AMC to allow the use of the report by another lender. Although the USPAP allows for an easy resolution to the situation, issuing of a Letter of Transmittal is not permitted.
Due to the fact that the appraisal report is not the property of the appraiser after it has been sent to the original Client, the appraiser can not give that report to someone other than the Client or the Intended User. Therefore, the request for the redirection needs to be handled differently.
The solution is a simple process and provides a better result to your client. The USPAP Advisory Opinion #26 (AO #26) addresses this concern and outlines the solution.
This is a new assignment so the Appraiser can simply:
1. Make a copy of the original work-file and rename the file in their file management system.
2. Rename the appraisal report with the new file name.
3. Change the Client and Intended User to the new Client
4. Amend the statement to reflect that you HAVE appraised the subject property in the last 3 years.
5. Change the Date Signed to the current date
6. Ensure that the report complies with the Lender’s Terms of Reference
7. Send the new report to the new Client.
There is NO need to obtain a ‘release’ from the original Client, this is a new assignment and the original Client is not involved.
Things to keep in mind:
• The appraiser must ensure that there has not been a significant passage of time between the original report and the request for the second report.
• The appraiser may want to complete the second report under the Extraordinary Assumption that the condition of the subject property is similar to that of the day of the original viewing of the property
• Be sure to keep the ORIGINAL EFFECTIVE DATE. If a new effective date is required by the Client, then new research will be required by the appraiser to comply with STANDARD RULE #1 of the USPAP.
• Be sure to reassure your Client (Broker/AMC/etc.) that you ARE able to comply with their request for an appraisal report that can be used by the new client. Our process is somewhat different that they may be aware of, but in the end, they are getting an appraisal report with the new Client shown as the Client and Intended User.
• If a 3rd report is requested, the process is the same. Copy the file, re-number the appraisal report, amend any necessary comments or dates, send the report to the new Client.