To answer, quite literally, it is written in the published lending guidelines for both government (HUD/VA) and conventional conforming (Fannie/Freddie) loans that the lender is required to obtain an independent and disinterested examination and valuation of the property being secured when either insured by a government agency or sold to the secondary market.

Therefore, the lender must both select the appraiser and order the appraisal ensuring that any party who may have an "interest" in the transaction, e.g., the borrower or the real estate agent, may not unduly influence the transaction.

The lender is also required to make sure that the appraiser follows the Uniform Standards of Professional Appraisal Practice as the minimum standard that an appraiser will employ. This may mean that an appraiser will extend the requirements of the USPAP (Uniform Standards of Professional Appraisal Practice), depending on the complexity of the property. And, the lender will check an appraiser's state license and whether the appraiser is on a non-participation list because of past misconduct. This would not be information that a buyer, agent, or owner would readily be able to ascertain.

The appraisal is such an integral part of the lending process that it carries as much weight to an underwriter as the borrower's ability to repay the debt (income qualifying), and the borrower's willingness to repay the debt (credit report). The weight given to an appraisal is equal to the weight given to the borrower.

Since the lender is responsible for the value assigned to a property, it would be highly unlikely that an appraisal would be used if it was ordered by an owner during a refinance or by a buyer or real estate agent during a purchase. The loan would be considered uninsurable or non-sellable.

Although an owner, or a buyer, pays for the appraisal as part of the loan approval process, it is the lender who makes the decision as to which appraiser will be selected to provide the report.