A private appraisal engagement letter is the short written agreement, signed before you start, that names the client, the intended use and users, the property, the effective date, the type of report, the fee, and the timeline. On a lender file the order sets the job for you. On a private file, the letter does.
USPAP does not require a written engagement letter. You still have to identify the client, intended use, intended users, effective date, and scope of work, though, and on a private assignment nobody hands you those facts. An executor, a divorcing spouse, or a homeowner appealing a tax bill usually does not know what “intended user” means. The engagement letter is where you settle it, in writing, before anyone has a reason to argue about it.
Why private work needs one more than lender work
Lender assignments come with a structure: an engagement from the lender or AMC, a form, a set of guidelines. Private assignments come with a phone call and a question. Without a letter, the scope lives in the client’s memory, and memories drift once a value comes in lower or higher than someone hoped.
Private reports are also read by more people. An estate report may go to several heirs, a CPA, and an attorney. A divorce report may reach opposing counsel and a judge. Reading the report is not the same as being an intended user, and the letter is your first, clearest place to say who is.
What a private engagement letter should cover
Every practice words these differently, but most solid letters address the same core items:
- Client. The person or firm engaging you, by name. With an attorney involved, decide early whether the client is the attorney or the attorney’s client.
- Intended use. Estate settlement, equitable distribution, a tax appeal, pre-listing pricing, and so on. Intended use drives scope, so be specific.
- Intended users. Named on purpose, plus a plain statement that no one else is an intended user.
- Property and interest appraised. The address, and whether you are valuing the fee simple interest or something else.
- Effective date. Current or retrospective. A date-of-death appraisal or a separation-date value needs that date stated exactly.
- Type of value and report option. Usually market value, and usually an Appraisal Report when a court, taxing authority, or opposing party may rely on it.
- Scope highlights. Interior or exterior inspection, access arrangements, and any known extraordinary assumptions, such as not being able to see the property as it was on a past date.
- Fee, payment terms, and turn time. What is included, when payment is due, and a realistic delivery window.
- What is not included. Depositions, hearings, consulting with counsel, revisions after a changed scope, and additional effective dates, with a note that they are billed separately.
Where letters usually go wrong
The most common problems are not missing clauses. They are vague ones. “For the family’s use” is not an intended user list. “As of the date of death” without the actual date invites a mistake. “Fee includes everything” turns a three-hour hearing into free work.
The other common miss is timing. A letter that arrives after the inspection, or never gets signed, does not protect much. Send it when the client says yes, and start the work once it comes back signed, along with any retainer you require.
Finally, do not pull in lender-form language by default. Certifications and limiting conditions written for mortgage lending may not fit an estate, divorce, or tax appeal use. Your letter and your report should describe the assignment you actually took.
The letter is also a sales document
Private clients hire the appraiser who makes the process feel clear. A clean, one- or two-page letter that explains the job in plain words does that. It also backs up the price. When the letter spells out a retrospective date, likely testimony, or an unusual property, the client can see why the fee is what it is, which is the same idea behind positioning appraisal fees for private work. Paired with a same-day first reply, it is often what turns an inquiry into a signed file.
This is a practice note, not legal advice. Have your own letter reviewed against your state’s rules and your E&O carrier’s guidance, and keep it current as USPAP editions change. For the broader scope questions, see the USPAP and scope of work section of the Private Appraisal Work Guide.
Part of the Private Appraisal Work Guide — assignment types, USPAP scope, fees, and how private clients find appraisers.
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