When You Complete a Final and Were Not the Original Appraiser

First of all, let’s clear the air of any initial confusion that could be potentially floating around out there. It is absolutely okay for an appraiser to complete a final for a property when they were not the original appraiser on the original report. It is perhaps slightly more unusual, but completely ethical. However, there are a few issues that an appraiser could potentially run into if they are completing a final for a report where they were not the original appraiser. I am going to talk about one of those issues here, but for a more in depth understanding, check out the related podcast linked below. 

Imagine you are asked, as one of my peers was, to complete an FHA final (1004D) for a report where you were not the original appraiser. You accept the request. When you arrive to the property, you see that the FHA issues indicated in the original report have indeed been fixed. However, while walking around the property, you also notice a few other FHA issues that were not mentioned in the original report. At this point, what is your responsibility? Do you simply say that things were completed according to the original report, or are you expected to report the other issues as well?

If you read what you are signing in the 1004D form, you will see that you only need to certify that the requirements or conditions listed in the original report were met. This is all you need to do in order to fulfill what was requested in the form and most likely in then engagement letter (although you will want to double check that). However, I think it is also wise in a situation like this to include a statement in an addendum that is similar to the following. “Upon inspecting this property, I did note that the repairs as requested in the original report were completed according to FHA guidelines. However, I also noticed the following potentially problematic issues that will likely cause the property to not be FHA compliant, though these issues were not noted in the original report.” This way I am taking extra steps to insure that it is clear that I saw and noted these additional issues so that I am safe from any potential problems that may arise in the future. 

To be clear, usually when I  perform finals when I am not the original appraiser, I don’t have any issues. They are typically fairly simple reports that go off without a hitch. However, it is important to be aware of these potential difficulties so that you know how to handle them if they do arise. 

For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: 


9 thoughts on “When You Complete a Final and Were Not the Original Appraiser”

  1. I have been doing appraisals for 40 years. I agree with you and I have always done this. I also take pictures and attach them to a separate photo page in case the lender wants to address these additional issues.

  2. This one I would not mention the other defects because I was most likely not engaged to complete a full property inspection. Where do you draw the line after you notice something do you them do a full inspection to make sure you do not miss and item. I have done this recently for fha railing and I just checked the railing, took 2 photos and left the property which is what I was engaged to do. I put a comment in the addendum that says just that I was engaged to verify the repair was completed and that is it and I did not complete the original report and did not do a full property inspection.

  3. I agree with Jamie. I’ve had this situation several times, and always added a comment like “Note: As per SOW, I only inspected the items requested in original report” or something to that effect. We are not police for the fha nor lender.

  4. A great topic and certainly one we all are faced with. Thanks for the input. Lets also discuss an FHA report that was completed for one Lender with conditions and the borrower decides to change Lenders. How do you handle the delivery of any revisions to the original appraisal that may be needed, the final inspection order Lender Information, what documents we should request from the new Lender before completing any revisions on the original order and final inspection order and lastly the payment of the original order if it has not yet been paid by the original Lender.

    1. A change in lenders Stephen is a change in the scope of work, and thus a new assignment. In other words, you have no obligation / liability to the new client and can tell them to pound sand. Now, if the new lender wants to play nice with the old lender behind closed doors, then the old lender can still ask you to address conditions, and when your done, they can forward the completed report to the new lender.

      Its been some years now, but appraisals are transferable and the new lender will not need to have their name on the report for it to be valid.

      Seek the truth.

  5. My insurance does not cover me to do final inspections behind a different appraiser, although I did some before realizing this. How do you state on the final that the property now meets FHA/HUD minimal guidelines when you never inspected the property as a whole? Lenders expect you to make this statement. I had refused because I never inspected the property and only inspected the required repairs. And yes I too would see other FHA related issues at times if they were in the path to the repair items. Another reason I would prefer not to do these as who knows what level of due diligence was followed for the assignment.

  6. Just say NO people! Does anyone here think most lender clients care about the appraiser and would thus never put them in legal or liability harms way (example FHA loan, different appraiser, 1004D)? Of course they want your signature saying all is good (interior/exterior) while your inspection is for peeling paint (outside only).

    Don’t even get me started on the slime ball clients who want 1004D summary appraisal update reports from a DIFFERENT appraiser! Welcome to California kids.

    Seek the truth and never be afraid to say no. No!

  7. I agree with Bill, just say no! The original appraiser should be the one to state the property meets FHA/HUD minimal guidelines. If he wrote the report “as repairs needed”, then he does not have a completed signed report out there until the final is made…

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