Our primary responsibility is to our client. Quite often, in residential practice, our client is the lender ordering the appraisal to decide whether to make the mortgage loan, or to a private party ordering an appraisal for specific reasons. As appraisers, we have certain duties of confidentiality to our clients. These include such things as obligations of numerical accuracy depending on the assignment parameters; an obligation to attain and maintain a certain level of competency and education; and of course, we must generally conduct ourselves as a professional. At Fire Horse Appraisal, we take these ethical responsibilities very seriously.
We may also have fiduciary obligations to third parties, such as homeowners, both buyers and sellers, or others. Those third parties normally are spelled out in the appraisal assignment itself. Our fiduciary duty is limited to those third parties who the appraiser knows, based on the scope of work or other written parameters of the assignment.
Aside from these obligations, there are also ethical rules that have nothing to do with clients and others. For example, appraisers must keep their work files for a minimum of five years.
We always perform to the highest ethical standards possible. We don’t do assignments on contingency fees. That is, we don’t ever agree to do an appraisal report and get paid only if the loan closes or the sale goes through. 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 just don’t do that.
The Federal standards of 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 several other things.
So why are we talking about ethics here? Because we want you to know that this means you can be assured we are working to objectively determine the home or property value, and you can be assured of 100 % ethical and professional service when trusting us with your business.