Arm’s Length or Another Type of Sale? The 7 Sale Types Explained

What types of sales for appraisals

Excerpts: As a real estate appraiser, whether you’re considering the current terms of sale or analyzing previous sales of the subject property or comparable sales, it is imperative to know whether a sale is an arms-length transaction or a different type of sale. Sales due to a job relocation, estate settlement, foreclosure, or divorce may sell for less than the property’s market value.

By knowing the type of sale, you are better able to reconcile a current opinion of market value that falls above or below a current or recent transaction for the subject property.

Here are the seven valid sale types, explained in detail below:

  • REO sale
  • Short sale
  • Court ordered sale
  • Estate sale
  • Relocation sale
  • Non-arm’s length sale
  • Arm’s length sale

To read more, click here

My comment: Worth reviewing. Some good tips, especially for today’s crazy sales market!

Using home’s previous sales in appraisals

Appraisal Business Tips 

Humor for Appraisers

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To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on FHA regs, USPAP, State Boards, appraisal business, unusual homes, mortgage origination stats, etc.


House Passes Legislation Addressing FHA Appraisals

Source: Appraisal Institute Online newsletter

The House on May 18 passed HR 3008, the Homebuyer Assistance Act, legislation reintroduced by Reps. Brad Sherman, D-Calif., and Van Taylor, R-Texas, that would amend the National Housing Act and allow state-licensed appraisers to perform appraisals for mortgages insured by the Federal Housing Administration. The legislation would require compliance with existing appraiser education requirements.

A previous version of the bill was introduced in the last Congress and passed the House, but did not receive a vote in the Senate. House Financial Services Committee Chairwoman Maxine Waters is working with Sherman and Taylor to help advance this version of the legislation.

The Appraisal Institute supports HR 3008 because it addresses long-standing concerns about the implementation of pre-existing FHA appraisal requirements, which differ from those of Fannie Mae and Freddie Mac and the conventional market.

To read more, click here

To read the analysis, comments and full legislation, click here

My comment: The Study Guide link near the topic of the page is short with useful information.


California City: The Unbuilt Suburb

The “3rd largest” city in California is an empty mirage of suburbia in the middle of nowhere.

Excerpt: Nat Mendelsohn had a dream. A city that was going to rival Los Angeles, in 320 square kilometers of Mojave desert paradise, centered around a beautiful—though not native to the desert and artificially watered, of course—park, complete with a 105,218 square meter artificial lake.

Seen on a map, it might seem as if perhaps Mendelson’s dream came true, for hundreds of miles of named streets cut through the desert area known as California City, ending in cul-de-sacs, and looking much like a large suburban community has been built. It is by this metric of its geographical size, that California City can lay claim to being the third largest city in California and 34th largest in the nation. However, on closer inspection, one quickly notices something missing: houses.

To read more and see fotos and mapsclick here

My comments: I have been hearing about this place for many years from California appraisers. When I appraised in Northern CA for an assessor’s office in the 1970s, I appraised “paper” subdivisions on our plat maps with no roads or any developments in more rural, mountain areas. They were sometimes hard to locate!!Getting too many ad-only emails?


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New in the June Issue of the Monthly Appraisal Today Newsletter, available June 1

  • Don’t Assume You Did it “Right” the First Time (when appraising the subject again) By Claudia Gaglione, Esq.
  • The AMC/Lender Will Whistle a Jaunty Tune as it Throws You Under the Bus by Tim Andersen, MAI
  • Seeing the forest through the trees by Rachel Massey, SRA, AI-RRS
  • Rising markets when my subject is the new high sale by Denis Desaix, MAI, SRA Part 1

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Your Appraiser’s Workfile Benefits You – Really! Tim Andersen Podcast

Excerpt: What is so special about the appraiser’s workfile? Just how does it benefit you, the appraiser? Isn’t it really just a time killer? Each of these is a reasonable question. Appraisers ask them all of the time. This podcast answers those questions. Tim also encourages you to find your own answers to these questions.

To keep this precise, we’ll cut to the chase. Your appraiser’s workfile protects you! That’s right! It protects you, the appraiser! You rightly ask, “Tim, it protects me from what?”. Thanks for asking! A complaint came in from a consumer (not the client). According to the complaint’s details, the consumer accused the appraiser of never visiting the property.

Long story short, the appraiser went to the workfile. Guess what!? In it was a photo of one of the bathrooms. This photo was not in the report. Why? Because the photo showed the appraiser’s reflection in a mirror! Needless to say, that was proof the appraiser really had visited the property (damn consumers!).

To listen and read more, click here

My comments: The June issue of Appraisal Today has an article by Tim, “The AMC/Lender Will Whistle a Jaunty Tune as it Throws You Under the Bus” – all about state boards and workfiles. I gotta upgrade my work files now!!! Tim helps appraisers when they have state board complaints and reviews their appraisals to avoid USPAP problems. Tim is a regular contributor to the monthly Appraisal Today.


The Opulent, Futuristic Megamansion of Bill and Melinda Gates Could Be a Hard Sell

If the compound came to the market, the divorcing pair would have to find a buyer looking for a Seattle home with a trampoline room and 66,000 square feet.

Excerpt: Dubbed Xanadu 2.0.—but listed in property records as the more straight-laced Gates Residence—the ex-couple’s main home on the edge of Lake Washington near Seattle…

“I have a nice house,” the Microsoft boss, who’s worth an estimated $124 billion, said on Reddit in 2019. “It includes a trampoline room which seems kind of over the top, but my kids love using it to work off their excess energy. I am not sure how guilty I should feel about being in a great house.”

Read more and see links for more “insider” info, click here

My comment: A while ago, I attended an appraisal national conference in Seattle. I don’t remember much about the conference, but I will never forget the “party boat” cruise that included viewing Gates’ mansion from the water. Food and alcohol were flowing, so I missed some of the other sights and could not hear the narrator trying to speak over the noise of the attendees. I think Richard Hagar was the narrator. I stayed a vacation rental home on Bainbridge Island on the water.

By George Dell, MAI, SRA

Excerpt: Faster, we understand! But what is “better”?

Faster is one of the ways we can make more money. Faster can be personally satisfying — if I can deliver a good or better product by being more efficient.

Efficiency comes through good systems and personal competency. Aha! So better can involve better systems and more knowledge. I have found that simply being more confident about my own judgment really helps all of the above. I know that if challenged on an appraisal, I have an answer or can respond helpfully without getting angry or hurt.

If I feel overall ok about my competency, it is much easier to respond to requests, good or bad.

To read more, click here

My comments: If you missed this Wednesday’s George Dell and Craig Gilbert free live Zoom webinar “Price Indexing”, it will be offered again June 30th at 12 Noon Pacific. Around 500 were registered. I will let you know. George is a regular contributor to the monthly Appraisal Today.


HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample issue go to or send an email to . Or call 800-839-0227, MTW 7AM to noon, Pacific time.

Mortgage applications decreased 4.2 percent from one week earlier

WASHINGTON, D.C. (May 26, 2021) – , according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 21, 2021.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 9 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 4 percent lower than the same week one year ago.

“Mortgage applications decreased last week as mortgage rates increased to 3.18 percent. Refinances dropped 7 percent as a result, driven by declines in both conventional and government refinance activity,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Purchase applications increased for the second time in three weeks, rebounding after a rather weak April with mostly weekly declines. While purchase activity was around 4 percent lower than a year ago, the comparison is to last spring’s large upswing in activity as pandemic-related lockdowns lifted. Demand is robust throughout the country, but homebuyers continue to be held back by the lack of homes for sale and rapidly increasing home prices.”

The refinance share of mortgage activity decreased to 61.4 percent of total applications from 63.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.0 percent of total applications.

The FHA share of total applications decreased to 9.1 percent from 9.2 percent the week prior. The VA share of total applications decreased to 11.2 percent from 12.0 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.18 percent from 3.15 percent, with points decreasing to 0.35 from 0.36 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.30 percent from 3.31 percent, with points increasing to 0.30 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.20 percent from 3.13 percent, with points decreasing to 0.25 from 0.30 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.53 percent from 2.54 percent, with points decreasing to 0.27 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.81 percent from 2.58 percent, with points increasing to 0.29 from 0.25 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.


Ann O’Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone 510-865-8041


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