Final When You’re Not the Original Appraiser

Final Inspection When Not the Original Appraiser - Appraisers BlogsWhen You Complete a Final and Were Not the Original Appraiser

First of all, let’s clear the air of any initial confusion that could be potentially floating around out there. It is absolutely okay for an appraiser to complete a final for a property when they were not the original appraiser on the original report. It is perhaps slightly more unusual, but completely ethical. However, there are a few issues that an appraiser could potentially run into if they are completing a final for a report where they were not the original appraiser. I am going to talk about one of those issues here, but for a more in depth understanding, check out the related podcast linked below.

Imagine you are asked, as one of my peers was, to complete an FHA final (1004D) for a report where you were not the original appraiser. You accept the request. When you arrive to the property, you see that the FHA issues indicated in the original report have indeed been fixed. However, while walking around the property, you also notice a few other FHA issues that were not mentioned in the original report. At this point, what is your responsibility? Do you simply say that things were completed according to the original report, or are you expected to report the other issues as well?

If you read what you are signing in the 1004D form, you will see that you only need to certify that the requirements or conditions listed in the original report were met. This is all you need to do in order to fulfill what was requested in the form and most likely in then engagement letter (although you will want to double check that). However, I think it is also wise in a situation like this to include a statement in an addendum that is similar to the following. “Upon inspecting this property, I did note that the repairs as requested in the original report were completed according to FHA guidelines. However, I also noticed the following potentially problematic issues that will likely cause the property to not be FHA compliant, though these issues were not noted in the original report.” This way I am taking extra steps to insure that it is clear that I saw and noted these additional issues so that I am safe from any potential problems that may arise in the future.

To be clear, usually when I perform finals when I am not the original appraiser, I don’t have any issues. They are typically fairly simple reports that go off without a hitch. However, it is important to be aware of these potential difficulties so that you know how to handle them if they do arise.

For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode:

Dustin Harris
Latest posts by Dustin Harris (see all)
Image credit flickr - Carlos Ramon Bonilla
Dustin Harris

Dustin Harris

A multi-business owner and residential real estate appraiser. He has been appraising for nearly two decades. He is the owner and President of Appraisal Precision and Consulting Group, Inc. He owns and operates The Appraiser Coach where he personally advises and mentors other appraisers. His principles and methodologies are also taught in an online, Mastermind group. He and his wife reside in Idaho with their four children. Dustin Harris on

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29 Responses

  1. Avatar Bill Johnson says:

    Just say NO people! Does anyone here think most lender clients care about the appraiser and would thus never put them in legal or liability harms way (example FHA loan, different appraiser, 1004D)? Of course they want your signature saying all is good (interior/exterior) while your inspection is for peeling paint (outside only).

    Don’t even get me started on the slime ball clients who want 1004D summary appraisal update reports from a DIFFERENT appraiser! Welcome to California kids.

    Seek the truth, never be afraid to say no, and as the coach says “go make up a value”.

    • Avatar Michael Curtis, SRA, AI-RRs says:

      I agree completely. Just say NO to 1004D’s and ROV’s. You sign it, you own it! Usually there is a damn good reason why the other appraiser can’t do his own final. Don’t believe this crap about “he is on vacation or is laid up in the hospital, etc.”. I have never believed in cleaning up anyone else’s mess.

      • Avatar E J says:

        The reason is that the 1st appraiser came 60+ miles to do the report and didn’t want to come back for the $75 they were offering. I was going that way any how & told them $175 and they accepted. I am only about 10 miles from there.

  2. Avatar Milton P says:

    Doing a final behind another appraiser maybe allowed, but not a good idea on any level. Usually the amc/lender will not send the entire appraisal, which raises a few red flags.

  3. Avatar Natalie Davenport says:

    We get requests for these all the time, I decline them and they usually want inappropriately low fees anyway. Why are you people taking 20 year old fees? No wonder there are almost no appraisers under 40.

  4. Avatar SB says:


    Credit Unions use this BS tactic to “re churn” a recent previous purchase appraisal for a new HELOC. All to save money at the expense of the appraiser.
    DO NOT WORK FOR CREDIT UNIONS unless you enjoy having your report REVIEWED and SCRUTINIZED months later.

    Fed is cutting rates next month GUARANTEED



    • Avatar Jack Of All Trades says:

      The divide is really complete. There is practically nothing the bankers/AMC will concede to be even civil or agreeable on in coordination with appraisers, let alone really work together towards any common goal. Their contempt is always on display.

    • Avatar don says:

      Years ago I appraised a 4-plex on several acres, The City had just DOWN ZONED the parcel, allowing one DWG unit per 20,000 sf. This parcel didn’t build out for 20 more years. This for a credit union.

  5. Avatar EJ says:

    I did one of these awhile back and they wanted me to say all repairs noted in the original report were completed and now the subject meets HUD Hand book 4000.1. Well, this house was 80 yrs old and had peeling paint everywhere that was not mentioned in the report so I said it did not meet guidelines and all the realtors threw a damn fit. I told them I was not going to risk my FHA certification saying it did. Now I’m the problem appraiser, not the original guy.

    • Avatar don says:

      Your client will hold you responsible for your report! If you enumerate the the other appraisers requirements and accept them as completed, SO BE IT. If you lie, your insurance will not pay, and you may deservedly loose you license. If your client asks you to lie, fire him, and file it with your State.

      Its within your control, collect your fee first.

  6. Avatar Julio E. Suñé, Jr. says:

    The secret to success is knowing which assignments NOT to take.

  7. Avatar Pat Turner says:


    Run away as fast as possible. Do not assume anybody’s liability.

    Come on man

  8. Avatar Bill Johnson says:

    So Dustin my friend, you say.

    “If you read what you are signing in the 1004D form, you will see that you only need to certify that the requirements or conditions listed in the original report were met. This is all you need to do in order to fulfill what was requested in the form and most likely in the engagement letter (although you will want to double check that).”

    …. “However, I also noticed the following potentially problematic issues that will likely cause the property to not be FHA compliant, though these issues were not noted in the original report.”

    Dustin, how with other discovered FHA issues, can you state the property meets HUD Hand book 4000.1?

    Come on Dustin, 4 to 9 full appraisal a day should be good without the need to fill a gap in your schedule with a random 1004D.

    Seek the truth, and go make up a value.

  9. Avatar Ralph says:

    I typically say no to these, when they call I’m like why not go back to the original appraiser? AMC response he went dark! Likely because you pay ? fees! I did one recently where original appraiser called for peeling paint and mold removal. I charged $250 made the owner provide the mold certification from a mold professional on their letterhead and inspected for peeling paint. Was nice and easy, but typically I get requests from terrible AMC’s who want to pay $75 and I just ignore.

  10. Avatar Johnny Q says:

    I see absolutely nothing wrong with performing one of these. The original appraiser states an appraisal is subject to peeling paint on some steps being scraped and repainted. I get the request to do the final even though I didn’t do the original. Seems rather simple to visit the property and check if those steps have been painted.

    • Avatar E J Brown says:

      The question is, what do you do when you see something else that was not mentioned in the original report that would make the place non compliant?

      • Avatar JohnnyQ says:

        I’ve been in that situation before. Clearly state the 1004D you’re signing only certifies that the specific items from the original report are or aren’t complete. And add a statement like “the appraiser recommends a full FHA appraisal inspection as some issues were apparent at the time of the final inspection which may not meet FHA requirements “

        • Baggins Baggins says:

          Perhaps you’re overlooking the chain of liability. For only the final inspection fee, the 1004d signing appraiser is the last in line, the final stop. They take on the liability for the original appraisal, by accepting the final. I mean, if you like the give the other guy a free pass on your insurance, why not.

  11. Randa Arnold Madden on Facebook Randa Arnold Madden on Facebook says:

    My issue is always the yes or no. If the original report items were completed but there are still fha items needed would you say yes or no!

  12. Avatar Dave says:

    With 1004D’s, you not only have to confirm the “subject-to”work was completed, but also have to check the box saying the value is at least what it appraised at originally, which then you own not only the repairs, but also the original value opinion. Do we really want to do this for $75…..

    • Avatar Bill Johnson says:

      Dave, the 1004D is a duel purpose form, meaning one section can be completed without the other. One does not have to confirm the value has not declined (top section), while also saying all repairs have been completed (lower section).

      Lenders love to try and order the 1004D (top section) on the cheap, but for me, the top section (if I say yes), is the same price as a full appraisal.

      Seek the truth.

  13. Baggins Baggins says:

    The follow up appraiser defacto agrees with the entire range of the original reports development, ‘by attachment’, to the 1004. The 1004d can not be submitted as a stand alone item for mortgage loan compliance, it is not an additional item complementary or optional to the 1004 form if a subject to box is checked. The 1004d or a lender cert of the condition is a mandatory required accompaniment item by attachment to the 1004 when a subject to box is checked. The 1004d automatically ties in by attachment with the primary appraisal in the final mortgage loan instrument and provides an additional insured party to provide assurance to the purchaser(s) of that financial instrument, aka the final and complete mortgage loan assembly. Mortgage insurance is denied if a 1004 has subject to, but no 1004d, unless the lender certs the condition themselves and provides something equivalent to the 1004d. Items such as inspection result reports or professional repair receipts. Even then it makes sense for the lender to have the appraiser assemble that. I liked Dave’s article. Just make it a new assignment, because to the appraiser personally it is a new assignment. The specific instructions in the 1004d form is not the entirety of the associated assurance the final appraiser actually provides. It’s more like co signing the limiting conditions of the 1004. I like the advice to simply advise the client to order a new appraisal. The story described per podcast speaks to me of just taking in work without advising the client what work product is actually best for them. Sure he complied with the letter of the form. What did the lender and borrower do after that?

    “Next time call me first and be willing to pay the full C & R fee, because I’m always available for final inspection completion.” Why do these appraisers overlook and under report on the underlying cause of the request? Was it a discount request? Was this an amc client? How can you not report on that? We know without having to be told.

  14. Avatar Garth says:

    *** Agreed: my response to the client:

    I am not available to accept the Final 1004d service. In the future, please contact me initially so I will be available when you need a Final.

    I have gained full-service business instead of $125: 1004d.

    *The Form has a dual purpose & I am not indicating one-way or another “value”. A Final IS a separate service.

    • Baggins Baggins says:

      I go $150 minimum with special disclaimer and in form notes on my template, the SOW for this is only to verify completion of item or correction of item. And this is not for value reconsideration and I have not included any such data, that is a new assignment request. Pick those up $250 on the rush, otherwise they’re full 1 or 2 week turn items like everything else.

      I know an appraiser whom is eager to call subject to for anything, like missing alarm or minor item or what not. That’s one way to go about it. It’s his way of replacing the now absent 2075 requests because those were bread and butter items which helped keep appraisers in business, quickies. I try to chat with agent and have them pop an alarm in or whatever, finals are a hassle. If it’s a big deal or problematic to the funding, subject to here we go. Always hypo as if condition is corrected so it can help you stretch the gap with deficiency and high pricing in the right scenario. And that’s the rub with picking up someone else’s work, did they apply the proper valuation theory for big ticket items to properly reflect as repaired hypo condition? And if you call more items, does that influence the hypothetical nature of the original value opinion? Better hope you only find something minor because otherwise if you call something major which effects value, then you can’t agree with their original opinion.

  15. WHY would anyone want to do these? Seriously. I hear some are limited to fees of $150. That covers reading the original report. Only.

    Its certainly not enough to compensate for setting up an assignment file; arranging for inspection, driving out there (and back) confirming whether specified work was done or not and then writing up the report. It is not adequate for the follow-up communications involving “almost completed” items that builders, sellers, agents, AMCs and lenders want to argue about.

    I prefer to let the original appraiser that called an issue out take care of clearing it. After gas and vehicle wear and tear, and driving time how much are you working for per hour?

  16. Avatar Mike says:

    I do them. They’re quick & easy money. However, I disclose in plain in detail and in bold print…THAT I DID NOT INSPECT ANY OTHER PART OF THE PROPERTY OTHER THAN THAT WHERE THE “SUBJECT TO” CONDITIONS WERE COMPLETED AND DO NOT CERTIFY ANY CONCLUSIONS FROM THE ORIGINAL APPRAISERS REPORT AND ONLY CERTIFY THAT THE “SUBJECT TO” REQUIREMENTS HAVE BEEN MET/COMPLETED. Everyone is right about the risk but if stick to the 1004D cert and not get ahead of yourself. You should be good. Just Cover your ass!!!

    • Each of us has his (or her) own business model.

      “Subject to completion per plans and specifications (insert identified specific 58 page plan package here, dated, approved by city and initialed in margins by appraiser, with architects name, lic # and job #) using materials as specified or comparable quality, equally acceptable to the market with all work being completed in a workmanlike manner, with issuance of final permits and certificate of occupancy by governing jurisdiction.”

      No one other than myself could possibly know what I (appraiser) meant by ‘comparable’ quality; or workmanlike manner. They are subjective.

      The fees paid for typical 1004Ds are not remotely adequate to read a good set of plans, complete with detailed finish schedules, engineering requirements and verifications of dimensions to assure that what was built was what was purported in the plans.

      Like so many other aspects of our profession, proposed construction requirements have diminished greatly. I referenced real plans above. Many if not most jobs today are working field sketches, or ‘plans’ run off on some builder’s home computer. using off the rack software, and totally lacking in enough detail to determine the actual quality of finished products.

      I guess draw inspections could be easier, though I’d personally still want the plans. On ‘near-complete’ projects where 95% was already finished it’s also not automatically critical for plan review. “Subject to installation of appliances and countertops, and electrical swithplate conversion all rooms.”

  17. Avatar Scotty King says:

    Could I complete one of these if I am licensed (not certified) and the original appraisal exceeds the $1M limit for licensed in Georgia?


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Final When You’re Not the Original Appraiser

by Dustin Harris time to read: 2 min