A federally related transaction involves a $300,000 refinance loan. The borrower complains that the appraisal fee of $650 is too high compared to other quotes of $400. Under AIR, how should the lender respond?

Option A: Immediately order a new appraisal from the lower-cost appraiser

This violates AIR principles by automatically selecting the lowest-cost option without evaluating whether the fee is appropriate for the assignment. Simply choosing the cheapest appraiser could compromise appraisal quality and independence. AIR requires evaluation of reasonableness, not automatic selection based on lowest cost.

Option B: Negotiate with the current appraiser to reduce the fee to $400

Negotiating fees with the appraiser based on competitor pricing violates appraisal independence requirements. This creates pressure on the appraiser that could compromise their independence and objectivity. AIR prohibits lenders from influencing appraisers through fee pressure or negotiation tactics.

Option D: Split the difference and pay $525

Arbitrarily splitting the difference shows no consideration for whether either fee is actually customary and reasonable for the specific assignment. This approach ignores the fundamental AIR requirement to evaluate fees based on assignment characteristics and market standards. It's an inappropriate compromise that doesn't address the regulatory requirement.