Professional appraisal standards are the essential ethical and procedural guidelines that licensed and certified appraisers follow to ensure accurate, unbiased, and reliable property valuations. In the United States, the predominant framework is the Uniform Standards of Professional Appraisal Practice (USPAP), developed by The Appraisal Foundation, a Congress-authorized organization. Compliance with USPAP is legally required for appraisals in federally related transactions, such as nearly all home mortgages through banks or credit unions.
These standards safeguard the integrity and trustworthiness of the appraisal profession by requiring appraisers to remain independent and impartial. They prevent conflicts of interest and ensure reports are clear, credible, and supported by thorough research.
For example, when purchasing a home, the lender—who relies on the property as collateral—needs confident assurance that its value supports the loan amount. The appraiser, following USPAP, provides this by applying strict ethical and competency requirements.
Key principles within USPAP include:
- Ethics Rule: Prohibits appraisers from personal bias or conflicts of interest and mandates disclosure of any relationship with the property owner.
- Competency Rule: Requires appraisers to have appropriate knowledge and experience for the specific property type.
- Scope of Work Rule: Ensures appraisers conduct adequate research and clearly disclose their methodology.
- Reporting Rule: Demands that appraisal reports are detailed, transparent, and understandable to users.
Appraisal standards also clarify common misconceptions. Though the borrower might pay for an appraisal, the appraiser’s primary client is typically the lender, and the appraiser must maintain objectivity toward all parties. Additionally, an appraisal provides a professional opinion of value on a given date; it is not always identical to the final sale price, which can fluctuate based on market dynamics.
If you disagree with an appraisal, you can request a Reconsideration of Value from the lender by presenting factual errors or additional comparable sales.
USPAP is updated biennially to reflect evolving market practices and legal requirements. Appraisers must complete continuing education to stay current with these changes.
For further reading on appraisal processes and related topics, explore our glossary articles on Fair Market Value Appraisal, Comparable Sales (Appraisal), and Appraisal Contingency.
For official guidelines, visit The Appraisal Foundation’s website at appraisalfoundation.org.
Sources:
- The Appraisal Foundation, USPAP: https://www.appraisalfoundation.org/
- Consumer Financial Protection Bureau on Home Appraisals: https://www.consumerfinance.gov/ask-cfpb/how-do-i-prepare-for-my-home-appraisal-en-2059/
- Investopedia, USPAP Overview: https://www.investopedia.com/terms/u/uspap.asp
