Have you ever noticed we call our contracts “engagement” letters? Regardless, it’s the start of a contractual relationship between fee and bank appraisers.

What’s something that may strain the relationship?


Has this ever happened to you? 

To be clear, most reviews are performed well. However, the appraiser-bank relationship can be lost over one review that went sideways. I’m not siding with either since there can be misunderstandings on both sides.

Reviews are a requirement and necessary for appropriate risk management of collateral. If you do bank work, you’re going to get reviewed; don’t take it personally. That said, the style and extent of reviews can vary significantly. To add more pressure, many appraisal departments struggle to hire new reviewers.

The truth is

So, what makes a good review? To find out, I interviewed top reviewers. The biggest takeaway: 

“It’s so important and dangerous to avoid paying properly for competent reviews.
It takes considerable time, effort and competency to perform a knowledgeable, compliant review.”

Let’s dig deeper 

Productivity-minded appraisal firms have tweaked their report writing templates like DataComp Suite to attempt to be “review proof.” They sometimes learn from reviewers and incorporate new ideas. “That was a good question, I’m going to incorporate that into my reports going forward.” Appraisers get graded by platforms like YouConnect if their reports require revisions. 

When bidding, some fee appraisers consider who’s the client (and reviewer). If a particular bank client is felt to have overzealous “gotcha” reviewers, the bids will reflect a “reviewer premium.” If the reviewers are felt to be fair and reasonable, appraisal fees tend to be normalized.  

In a nutshell 

What’s the difference between a “good” and “bad” reviewer? To answer this question, I asked some of the best reviewers in the U.S.

1. What do you see reviewers getting wrong?

That the review process has to be totally objective. It’s a mistake to be subjective about the review of the appraisal methodology from the beginning to the end of the report and determine whether it complies with the engagement letter, state and federal regulations. It’s not about the reviewer. It’s not about their opinion of how they would have appraised the property.  

2. Can all commercial appraisers become reviewers or are there hurdles?  

Any licensed appraiser can perform a review. A review assignment is a totally different process as compared to an appraisal. Understanding how to perform and report a review competently is the hurdle.  

3. What’s the typical cost of a residential and commercial review?

There are no typical costs that I’m aware of for residential and commercial reviewers. Review fees have been shrinking over the past decades and I’m sure all appraisers are aware of that. But there has been some push-back on fees that’s very important and needed.    

Better together 

Let’s improve the fee and bank appraiser relationship. Make the effort to have open dialogue. If needed, clear the air. In the end, bank appraisers love to receive good quality reports from their vendors. Fee appraisers love to provide great appraisals that help their clients.  

Let’s change the narrative. Cause if you liked it then you should have put a ring on it. Let’s spread the love.  

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