What Credential Do Lenders Require for an Appraiser in Los Angeles?

A lender lends against the property, so it needs to know what the property is worth. The Consumer Financial Protection Bureau describes an appraisal as an independent assessment of value, and says that the most common lender valuation is an appraisal by a licensed appraiser. A computer-generated value is a different kind of valuation, built from mathematical models rather than from an appraiser's work on the property.

California licenses appraisers in four classes: trainee, licensed residential, certified residential and certified general. The California Bureau of Real Estate Appraisers documents a scope of practice for each. A Certified Residential appraiser may appraise one-to-four unit residential property, and non-residential property up to a $250,000 transaction value. A Certified General appraiser may appraise all property types.

This explains why the class matters. A lender or an attorney may specify the class it needs for a given property or loan, and the class has to cover the property being valued. That does not mean every lender requires the Certified Residential class. The lender sets its own requirements, and the class sets what the appraiser is permitted to value.

You can verify any California appraiser on the state record. Search by name or license number and read the license level, status and dates. The same lookup works for an appraiser the lender chooses, and for one you hire yourself. The guide on what makes a residential appraiser certified explains each field.

For a typical first-mortgage home loan, the lender must generally give you a copy of its appraisals promptly, and no later than three business days before closing or account opening, unless you waive the timing as Regulation B allows. The lender may charge a reasonable fee for the cost of preparing the appraisal. If something in the report is wrong, tell the lender and ask for a correction.

Ask the lender which class it needs for your property and loan. Ask who chooses the appraiser. If you hire your own, tell the appraiser the purpose and who will rely on the report, because those facts decide whether the class is enough.

The appraisal affects the loan, so the borrower is entitled to read it. A short checklist helps: confirm the address and the property description, look at the comparable sales and their dates, and see whether the adjustments make sense for the differences between those homes and yours. A borrower who finds a factual error should say so in writing.

Read how a home appraisal works for the visit, and why homebuyers need an appraisal if you are buying.