Why must Banks order appraisals?
The most common need for an appraisal is for financing purposes. The Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 requires that any federally related (i.e., federal and state savings & loans and banking institutions) mortgage transaction over $250,000 have an appraisal done by a state licensed or certified appraiser. When you receive a loan to finance a property, for purchase or for refinance, your property secures usually secures the loan. Your lender will need an appraisal on your property to determine if the loan you are requesting will be adequately secured by the property. Most lenders are required to order the appraisal directly from the appraiser in the interest of obtaining an unbiased opinion of value. Furthermore, many lenders maintain a list of approved appraisers from whom they will only accept appraisals. If you are thinking of getting an appraisal for financing purposes yourself, check with your lender first – they may need to order the app
