101.02: Knowledge and Experience Requirements

We expect a lender to use an appraiser who not only has the knowledge and experience that is required to perform a professional quality appraisal for the specific geographic location and the particular property type for which the lender needs an appraisal, but also has knowledge about, and access to, the necessary and appropriate data sources for the area in which the appraisal assignment is located.

The Competency Rule of the Uniform Standards of Professional Appraisal Practice requires a state-licensed or -certified appraiser who does not have both the knowledge and experience required to perform an appraisal competently to disclose his or her lack of knowledge and experience to the client before accepting an appraisal assignment.  This rule acknowledges that the background and experience of appraisers varies widely and that the lack of knowledge and/or experience can lead to inaccurate property valuations and inappropriate appraisal practices.  The Uniform Standards allow an appraiser who does not have the appropriate knowledge and experience to accept an assignment as long as he or she

We believe that it is important for a lender to use an appraiser who has both the appropriate knowledge and experience, rather than taking advantage of this flexibility.  We further believe that the use of an appraiser who has both appropriate knowledge of specific geographic markets and experience in appraising specific property types will help to assure the accurate valuations and appropriate appraisal practices that are necessary for fair lending.  A lender must not assume -- simply based on the fact that an appraiser is state-licensed or -certified -- that the appraiser is qualified and knowledgeable about a market area or is aware of the appropriate market data sources for the area and will be able to obtain access to them.

If an appraiser is not knowledgeable about a particular location, is not experienced in appraising a particular type of property, or is not familiar with (or does not have access to) the appropriate data sources, a lender should not give the appraiser assignments in that market area or for that particular type of property.

Because the experience and knowledge of appraisers varies widely, a lender that chooses to rely on a specific appraiser or appraisal service to review the qualifications of (or even to select) individuals to perform appraisals for the lender should establish appropriate appraiser qualification criteria and review procedures to assure that the third party takes all of the above issues into consideration in its selection process.