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.
Common questions
- What is an engagement letter for a third-party report?
- The agreement retaining a vendor such as an appraiser or environmental consultant, defining scope, fee, timing and who may rely on the report.
- Why does the lender sign the engagement letter?
- Because reliance matters. The lender wants the report prepared for it, under its scope, and addressed to it, which is also required for appraisals under federal rules.
- What is a reliance letter?
- A letter from a report's author permitting a party not named in the original engagement, such as a later lender, to rely on the report.
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