New Client, Same Property

There is a problem that I would guess most appraisers run into on a somewhat frequent basis. Imagine the following scenario (it probably won’t be too hard since you have likely encountered something similar): You do an appraisal for Client A. Somewhere during the loan process, the loan is turned over or changed to Client B. Client B knows you recently completed an appraisal on the same property for Client A and asks for a copy of the appraisal in their name. What do you do next?  It seems to me, at this point, you have at least four options: two of them are allowed, and the other two are, well, not.


Option #1 (not allowed): Since Client A owns the report, you could ask Client A for permission to share a copy of the report with Client B. Once Client A gives permission, simply change out the client name and send it to Client B. This is a problem because changing the client name on the report would essentially mean you created a second report without treating it as a new assignment.  


Option #2 (allowed): Tell Client B, that while you would love to accommodate them, you unfortunately cannot send them a copy of your report because Client A is your client, thus the report is confidential to Client A. You can, however, complete another full report (including a new inspection) if they would like (remember to disclose prior services), and likely charge a full appraisal fee for your efforts.


Option #3 (not allowed): After obtaining permission from Client A, simply use the Fannie Mae update form (1004D) to transfer everything over to Client B. This is an issue, because you now have a new appraisal report without the majority of the necessary content and forms to support it.


Option #4 (allowed – but not common): Inform Client B of your ethical responsibilities and let them know that you can do another appraisal (retrospectively and for a reduced fee). Ask them if they would like you to complete another inspection (note that an inspection in not required for an appraisal, it is typically just required by the client). If they are okay with you not going back out to the property, you might make a business decision to offer them a less expensive fee and a quicker turnaround time. Essentially, they are ordering a retrospective appraisal (as of the effective date of your prior inspection). Remember to disclose all previous appraisals completed on the property by your company within the last three years including the report recently completed for Client A.


I personally think option #4 is the most realistic. Why would you want to make such a business decision?  It allows you to help out your client while still doing so ethically. These types of things are typically ordered from companies who are either not currently your client or whom you already have a good working relationship with.  Either way, this is a way to potentially build a new or better long term relationship.


Above all, if this problem arises for your business in the future, be sure to clearly communicate your ethical obligations to your client .  Remain as professional and as helpful as possible, but remember to remain within your required parameters.

For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: 309 – A Creative Solution to the Reassigning an Appraisal Problem

13 thoughts on “New Client, Same Property”

  1. Pingback: New Client, Same Property - Appraisal Buzz

  2. A little gray into the mix: Just had this happen, but my original appraisal was proposed construction and Lender A transferred the report to Lender B. Lender B wants a “recertification of value” on a 1004D form. B was not happy to hear that Option 2 was my response. The lender’s statement to me was “Other appraisers do this for us all the time”. I told her that was great, because when the other appraisers are in the pokey and lose their certifications, it will mean less competition for me and I will be able to adjust my fees accordingly. I guess I also happened to mention that the other appraisers would have plenty of company, because the lenders that play these games will be right there with them. I guess I am running low on tact and tolerance this month. I don’t think they are going to give me the new assignment…

  3. Don Orttenburger

    I have always maintained that while my client owns the report, I own the data. Why can I not do a new report as of the same effective date as the first appraisal. In other words, I am doing a new report based on that original inspection and based on the new Scope of Work as long as the new Scope does not alter the prior inspection (FHA vs. Conventional, etc) and I disclose the prior service (Report). This is most applicable when the 2nd client contacts you within a short time of doing the first report since most lenders cannot use a 6 month old Date of Appraisal. I know that many appraisers (my self included) would want to do a new inspection to establish a new Date of Appraisal, but I don’t see that as “technically” necessary.

    By the way, this is based on 27 years as an appraiser.

  4. I would think you can complete a 1004d as that is a different assignment. I see colleagues perform 1004d assignments on other appraisers work all of the time

  5. Thankfully in more recent years, lenders are somewhat familiar with our requirements fairly easy to work with on prior assignments issue. I work rural areas with smaller towns, and just recently was the first time I’ve ever been asked for an update. Mostly the 1004D request is a completion purpose and not an update. I very seldom do completion inspections for reports that I didn’t write. Typically it is for HUD, and often the original appraiser didn’t note something significant! Then I have to make a judgement call and deal with that, usually regretting I took “their” job…. (14 years experience) Note:I’ve fell into the low on tact and tolerance month as well… My testimony is too disgusting to repeat!

  6. I think if you redo an appraisal for a new client and charge like it’s a new assignment, it really reduces appraisers credibility! It makes it look like we’re trying to take advantage for another full fee for the same service. We all know that it takes very little time to rename the report, change the lenders info, add the comment that you recently appraised the property for the prior lender and then just make sure everything coincides. There is no reason to go back out to the property nor is there any reason to act like it’s a new report. I usually charge around $100 for this change which is fair and doesn’t take much of my time…

  7. Option 5. Explain to the new lender that its not legally required for you to change the name of the client in the original report for them to be able to use the first report. Or choose options #2 or #4 and shake them down with some side hustle money.

    Seek the truth.

  8. With release of the appraisal from the original client (99% of time no problem), borrowers can transport the appraisal to any lender they want, and legally, the 2nd client or 100th client does not need a name change for it to be viable (just like the VA system). The issue is this, instead of having a single way of doing business (only needs to be USPAP compliant), each lender puts their own spin of requirements on the appraiser (1 page, or 20 pages), thus each assignment is most often a one off. If lender two wants 2 active or pending sales, and the original assignment had no extra requirement, boom they want a new appraisal. If lender 69 requires a comment concerning utilities (not required the 1st time), boom they want a new appraisal. If lender 99 uses XYZ AMC, and the original appraiser is not on that panel, boom they want a new appraisal.
    If the government truly wanted to reduce the costs associated with buying a property, instead of making the argument of saving the consumer $500 10% of the time by issuing PIWs, they would streamline the original requirements and encourage each lender to only require USPAP compliant appraisals instead of each one being a custom order. Lenders know the rules (appraisal transfers), but choose to not follow them in an attempt to keep the consumer trapped (if you leave you will pay a new appraisal fee).
    In keeping the public trust, the 1st step in talking to the borrower (you know they call), is to tell them the rules so they can be informed of the reality that is often hidden from them so that others may profit.

    Seek the truth.

  9. Hey Dustin, I know this a three year old thread but am assuming it will get to you anyway. I have a new situation I haven’t heard of before. An FHA report that was “subject to” repairs, engineering inspection, etc has been transferred. New lender wants me to do the 1004D now that the work has been completed. They aren’t asking me to change the client name on the report, but are asking me to correct the address on old report to whatever the new title report says(its a duplex). I feel that this is also a potential option 2 or 4. Although they haven’t said, I am sure they would want their name on the 1004D.

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