When Can You Hire Your Own Appraiser?

A property appraiser provides an unbiased, professional opinion of a real estate property’s value. This assessment is crucial for various financial and transactional purposes. The ability to personally hire an appraiser is not always straightforward, depending on the specific situation and the appraisal’s intended use. Appraiser independence is a principle, ensuring fair and objective valuations.

When Personal Appraiser Selection is Permissible

Individuals can hire and pay for their own appraiser when the appraisal serves their direct informational or transactional needs. For instance, in private sales, a buyer or seller might seek an independent valuation to inform negotiations outside of a mortgage transaction.

Appraisals are often needed for estate planning and probate to value assets for inheritance, trust administration, or estate tax calculations. Similarly, during divorce settlements, an independent appraisal helps determine the equitable division of real estate assets, providing an objective basis for negotiations and court decisions.

Individuals can also hire an appraiser for property tax appeals when disputing a property’s assessed value. For personal financial planning, wealth management, or insurance purposes, an appraisal can help understand a portfolio’s current value. Homeowners may also opt for pre-listing valuations to understand their property’s market value before selling.

When Personal Appraiser Selection is Not Permissible

Individuals cannot hire their own appraiser in situations where the appraisal would not be accepted by the requesting party, often due to regulatory requirements ensuring impartiality. The most common example is in mortgage lending. Federal regulations, such as those from the Dodd-Frank Act, mandate that lenders order appraisals through an independent third party.

This independence prevents conflicts of interest and protects against inflated property values that could jeopardize the financial system. Lenders typically use Appraisal Management Companies (AMCs) or internal departments with strict firewalls to select an appraiser. This ensures no party with a financial interest, including the borrower, seller, or lender, can influence the appraiser’s selection or valuation. Consequently, a borrower-ordered appraisal will not be accepted for loan underwriting.

Other regulated transactions may also require an independent, third-party-ordered appraisal, including certain government-backed loans or court-ordered valuations. These situations prioritize impartiality over individual choice in appraiser selection due to regulatory or institutional reasons.

Selecting a Qualified Appraiser

When personal selection is permissible, choosing a qualified appraiser is important for an accurate valuation. Appraisers must hold state-specific licenses or certifications. Professional designations, such as MAI or SRA from the Appraisal Institute, indicate higher levels of experience, education, and adherence to ethical standards.

Seek an appraiser with experience in the specific property type (residential, commercial, or unique) and extensive knowledge of the local market. An appraiser’s independence and objectivity are paramount; they should have no financial or personal ties to the property or transaction. Checking references and online reviews provides insight into an appraiser’s reputation. Before engaging an appraiser, clearly communicate the appraisal’s purpose to ensure the scope of work aligns with the intended use.

The Appraisal Process and Report

After an appraiser is selected, the appraisal process begins with information exchange and scheduling the property inspection. The appraiser conducts an on-site visit to inspect the property’s interior and exterior, noting its condition, features, size, and any recent upgrades or renovations.

Following the inspection, the appraiser gathers and analyzes various data points, including comparable sales (“comps”) of similar properties, current market trends, and public records. Appraisers typically use several valuation approaches, such as the sales comparison approach (relying on recent sales) or the cost approach (estimating the cost to rebuild).

The appraiser then prepares a detailed appraisal report. This report typically includes an executive summary, a comprehensive property description, market analysis, comparable sales data, and a reconciliation of the valuation approaches to arrive at a final opinion of value. The effective date of value is also specified. This report allows the individual to understand the valuation and utilize it for their specific purpose, whether for negotiation, financial planning, or legal proceedings.