In one sentence
The agreement retaining a third-party vendor, such as an appraiser, environmental consultant, or counsel, defining scope, fee, and timing.
The longer version
Every third-party report begins with an engagement letter that fixes what will be delivered and when. For regulated lenders, appraisal engagements must preserve independence from the production side.
Engagement timing sets diligence timing. A report engaged at kickoff arrives in time to matter; one engaged after documentation starts arrives as an emergency.
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