Who Schedules the Appraisal in a Real Estate Transaction?

A real estate appraisal is a professional estimate of a property’s market value, typically conducted by a licensed appraiser. This process provides an impartial opinion of value for a specific property as of a particular date, supported by relevant market information. Its fundamental purpose in a real estate transaction, especially those involving a mortgage, is to determine if the property’s value adequately supports the loan amount being requested.

The Lender’s Primary Responsibility

The mortgage lender is the party that orders the appraisal in a real estate transaction. Lenders require an appraisal to protect their investment and to meet regulatory requirements, ensuring the property’s value serves as sufficient collateral for the loan amount.

To ensure appraiser independence and compliance, lenders typically utilize Appraisal Management Companies (AMCs) as intermediaries. An AMC is an independent entity that maintains a network of state-licensed or certified appraisers. The lender provides the AMC with property and loan details, and the AMC then selects a qualified appraiser from their approved panel, often through a random assignment method, to conduct the valuation. This arrangement establishes a separation between the lender and the appraiser, reducing the risk of undue influence on the appraisal outcome. Direct communication between the lender, buyer, seller, or their agents and the appraiser regarding the valuation is restricted to maintain impartiality.

The Buyer’s Role in the Process

While the buyer does not directly schedule or choose the appraiser, they play an essential indirect role in initiating the appraisal process. The buyer initiates this step by applying for a mortgage, which then prompts the lender to order the appraisal. The buyer is typically responsible for paying the appraisal fee, which usually ranges from $300 to $1,000, as part of their closing costs.

Despite paying for the service, the buyer is not permitted to influence the selection of the appraiser or the appraisal’s outcome. The lender, or the AMC on their behalf, selects the appraiser to ensure an unbiased valuation. The buyer’s real estate agent may assist by facilitating payment arrangements or coordinating access to the property for the appraiser’s inspection. Federal regulations require lenders to provide buyers with a free copy of the appraisal report no later than three days before the loan closes.

The Seller’s Limited Involvement

The seller’s involvement in the appraisal scheduling process is generally limited. The seller’s primary role is to cooperate by providing access to the property for the appraiser to conduct the necessary inspection. This inspection typically involves a visual review of the home’s interior and exterior, including measurements and notes on condition or upgrades.

Sellers should avoid communicating directly with the appraiser regarding the property’s value or attempting to influence the valuation. Appraisers are bound by independence requirements that prevent them from being swayed by interested parties. While the seller or their agent can provide factual information about the property, such as a list of improvements or relevant comparable sales data, this information should be presented objectively. The seller’s role is largely passive once access for the appraisal inspection has been granted.