Answer:
The Interagency Appraisal and Evaluation Guidelines that were published in the Federal Register on 12/10/10 require engagement letters when ordering appraisals, especially for large, complex, or out-of-area commercial real estate properties.
The engagement letter is a means of communication between the parties and lays out the expectations related to the appraisal request. It will also identify the intended use and user of the appraisal in accordance with USPAP. This is also a place where restrictions, contractual or otherwise, may be set out.
A copy of the engagement should be included in the credit file.
First published on BankersOnline.com 4/22/13
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