Appraisers – The Past and The Future

The Path that Brought Us Here

by Richard Hagar, SRA

Excerpts: A wise man by the name of Jim Irish, former chief appraiser for the Federal Reserve Bank out of Topeka, Kansas, once told me something very profound: “The government is rarely proactive but always reactive.” Translation: laws, rules, and guidelines are usually developed after a problem smacks us upside the head. Since hearing this, I have found that it also applies to large enterprises.

Appraisers continued to tell lenders that they drove by each of the comparables used in the report. Years later, when lenders, Fannie Mae, Freddie Mac, FHA, and the VA spot-checked reports, they found out that the condition or location of many comparables didn’t match what was reported. So, the reactive response was to require the appraiser to affirm, under penalty of perjury (which stands to this day), and provide original photographs of each comparable.

Failure to inspect triggered client engagement letters stating the absolute requirement to personally inspect each of the comparables, provide original photographs, and create a system that inspects the photographs and can tell when a photograph is used twice or sourced from the MLS or county—clients know who’s lying to them and fees are lower because of it.

To read more, click here


Prepare for Change

by Richard Hagar, SRA

Excerpts: In my career, I’ve been through four major changes in the market and our business, so what’s about to happen isn’t my first rodeo. I’m going to point out some things that will make a few people angry. However, I’m trying to help by pointing out how you can become better and profit from the change.


Both Fannie Mae and Freddie Mac allow “appraisal waivers” (loans where no appraisal is required), and in the past, waivers were limited to fewer than 5% of the loans they purchased from lenders. However, their waivers have increased to 48% of their loan purchases over the past year. Imagine that 48% of the loans no longer require an inspection or appraisal.

Prior to 2022, Fannie Mae’s UAD system reviewed approximately 20,000 appraisals a day produced by approximately 40,000 appraisers. This indicates that appraisers were providing one appraisal every other day. Now, consider that waivers reduce the rate to an appraisal once every 4 days. Ouch.

To read more, click here

My comments: I have known Richard Hagar for a long time. He can sometimes be negative or even harsh but has good ideas

The future of residential appraising(Opens in a new browser tab)

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 unusual homes, bias, Old comps, investor purchases, mortgage origination stats, etc.



The Curious Cubic Houses Of Rotterdam

Inside the fascinatingly curious Cube Houses of Rotterdam

Excerpts: They were conceived and constructed by architect Piet Blom in the 1970s. Blom was asked by Rotterdam town planners to solve the dilemma of building houses on top of a pedestrian bridge, and, having built similar houses earlier in another town, Blom chose to repeat the design in Rotterdam.

Structurally, the cubes sit tilted on a hexagonal pole. They are made up of concrete floors, concrete pillars and wooden framing. Inside, the houses are divided into three levels accessed via a narrow staircase. The lower level is a triangular area used as the living room. The middle level houses the sleeping and bathing area, and the highest level is a spare area used either as a second bedroom or another living area.

To read more, click here

My comment: Fascinating! Check out the interior photos and the very interesting writeup.


Bias: Blame the Messenger?

By George Dell, MAI

Excerpt: The messenger. Psychology research easily points out our tendency to dislike the bearer of bad news. It’s also intuitive.

Bad news messengers do not smile when they bring the news. Sometimes they even look guilty. We humans can be really basic. We see a correlation between the bad news, the frown, and the messenger.

Appraisers are messengers. Why is their message so despicable? So biased?

In the entire real estate transaction, everyone wants to make a deal. Brokers want to make a commission. Lenders want interest and’ points.’ Sellers want their price. Buyers want a loan to make the deal. That’s for a sale transaction. Once in the deal — everyone wants the “value” to be the agreed price. Except for the appraiser.

To read more, click here



Senators Seek Regulatory Review Of Wells Fargo Over Discrimination Claims

Letter sent to HUD, CFPB questions whether bank followed federal nondiscrimination rules.

Excerpts: Eleven U.S. senators sent a letter to federal regulatory officials seeking a review of Wells Fargo Bank N.A. over claims that its mortgage refinancing process during 2020 and 2021 discriminated against minority borrowers.

The letter states that while “one large national lender approved 79% of Black refinance applicants (compared to 86% of white applicants), Wells Fargo approved just 47% of Black refinance applicants and 53% of Hispanic refinance applicants, compared to 72% of white applicants.”

The letter was dated one day after the CFPB announced changes to its “supervisory operations to better protect families and communities from illegal discrimination.” In a news release, the CFPB said it would “scrutinize discriminatory conduct that violates the federal prohibition against unfair practices,” including closely examining “financial institutions’ decision-making in advertising, pricing, and other areas to ensure that companies are appropriately testing for and eliminating illegal discrimination.”

To read more, click here

My comment: Maybe politicians will figure out where the Big Money Bias is coming from! Of course, l contribute millions of dollars to politicians for re-election. Appraisers don’t contribute much. Money talks.Getting too many ad-only emails


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When the best comps are four years old

By Ryan Lundquist

Editor’s Note: This is an excellent example of how a knowledgeable and experienced appraiser handles this problem, including graphs. I have gone back over 10 years for comps for an unusual property. Market conditions adjustments are easy to make.

Excerpt: 1) Be sure to look wide enough:

Sometimes, we focus so heavily on comps over the past 90 days, but there might not be any. At times we need to look much further in time to get a sense of how a unique property might fit into the market.

Whatever we do, let’s just be cautious about imposing such a narrow view that we miss older sales that might be relevant. Usually, we might have sales within the past 12 months, but this was a unique case. I’d recommend finding more than one comparable sale too because one data point might not be enough to get a sense of value.

To read more about using old sales, including comments on lender appraisals, and see many graphs subscribe to the paid Appraisal Today.

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If you have any comments or info on any topics, please hit the reply button!! I’m always looking for something new ;>If you are a paid subscriber and did not get the April 2022 issue, emailed on April 1, 2022, please send an email to and we will send it to you!! Or, hit the reply button. Be sure to put in a comment requesting it.


Wall Street Sinks its Teeth Into Housing

Excerpt: Often seen as existential threats to the industry—or even to the whole current model of home buying and selling—Big Tech and Wall Street are now involved more than ever in residential real estate, from algorithmic-based iBuyers to venture capital-backed brokerage firms. Even as the influx of money and huge leaps forward in technology have created efficiencies and new opportunities, the dissociative, far-reaching power of these tools also have frightening implications.

To read more click here


Taxing flippers 25% in California?? Too many investor-owned homes

By Ryan Lundquist

Excerpt: Why residents wanted a flipper bill:

1) Frustrated with home prices: People are frustrated with the skyrocketing price of homes and rents, so something needs to be done.

2) Frustrated with investors: There is no mistaking investor activity has been increasing nationally, and people are frustrated about that because they feel investors are squeezing them out of opportunities.

Stats (See Above):

a) John Burns stats: This visual from John Burns Real Estate Consulting shows investors purchased one out of every three homes in the United States in January 2022. This is definitely up from a decade ago, though it’s not clear how much of this represents flippers (not all investors are flippers).

To read more, click here

My comment: My niece and her husband recently purchased their first home in a nearby small city (Livermore CA) after getting overbid many times. Many homes in the city are owned by investors, who are renting them, meaning fewer homes to buy. Investors had targeted her city. Their new home is only two miles from where they work – Lawrence Lawrence Livermore National Labs. They had been commuting 33 miles one way from San Jose.


A 12-Stop Road Trip of Frank Lloyd Wright’s Most Surprising Designs

A UFO-inspired church, a futurist gas station, and many unusual homes. The above photo is a mausoleum.

Excerpt: It’s been more than 60 years since Frank Lloyd Wright’s career came to an end following his death in 1959, and there are nearly 300 structures designed by the prolific American architect still standing, the bulk of which are sprinkled across the United States.

Many of these homes and buildings are iconic, known for their creative use of space and natural materials, a Wright trademark. But the architect’s genius also springs up in unexpected places, like the gas station in Minnesota that includes an observation deck or a Greek Orthodox church that looks like a spaceship.

To see more very interesting and different photos and read more, click here

My comments: Take a break and check out the photos! If one (or more) looks interesting to you, click on the name and see lots more info and photos!!


Chat with other appraisers on Clubhouse. Every week on Thursday at 2 PM Pacific Time. 

Julie Friess and I recently started a Clubhouse group called “Real Estate Appraisal Questions.” 

We discuss appraisal topics, sometimes with differing opinions. Participants join in.

Meetups last about an hour and are recorded after they are completed.

You can listen to them any time.

Our next session: Friday, April 14 at 2 PM Pacific Time.

Topics: What’s the future of appraising with mortgage interest rates going up? How’s your market doing?

Recent topics:

  • Excess land and surplus land. We also discussed easements, landlocked parcels, zoning, lot splits, water access, and other topics.
  • Highest and Best Use (our favorite topic), functional utility, legal nonconforming
  • Septic systems, sewer, or neither one? Do you know? One of the most frequent reasons for E&O complaints.
  • AMC revision requests & ROV? Is scope creep getting you down?
  • The value of smells! Is there a way to determine this?
  • ANSI Standards, what does it mean for you? 4/1 is coming!


How to Join Clubhouse and our group

Download the Clubhouse app on your smartphone (Apple and Android).

When you’re set up, search for Real Estate Appraisal Questions.

It is audio-only with your photo or another image showing on the screen.

Another group, Real Estate Appraisal Talk, has been around for a while and has two rooms per week.

If you’ve never heard of Clubhouse, that is normal. I keep asking people if they have ever heard of it, and no one has said yes. In contrast, I regularly mention pickleball, and everyone has heard of it!


Best (and Worst) Housing Markets for Growth and Stability – 2022 Edition

Best Housing Markets for Growth and Stability

1. Austin-Round Rock-Georgetown, TX

Moving up from the second spot, Austin-Round Rock-Georgetown, Texas ranks as the best metro area housing market for growth and stability in this year’s study. Home prices increased nearly 368% from 1997 through the end of 2021, the highest increase among all 400 metro areas in our study. Meanwhile, there was a 0% chance that a home would suffer a 5% drop in price within 10 years of being purchased.

2. Boulder, CO

According to data from the Federal Housing Administration (FHA), the home price index in Boulder, Colorado rose by more than 277% from 1997 through 2021. Additionally, home prices in Boulder have been relatively stable during that 25-year period, with a 1% chance of a 5% or more drop in home price within a decade of buying.


Worst Housing Markets for Growth and Stability

1. Flint, MI

Like last year, the Flint metro area ranks as the worst housing market for growth and stability. Using historical data, we found that the chance a home price dropped more than 5% in value within 10 years of purchase is 45% – the second-worst rate for this metric. Additionally, over the past 25 years, the average home price has increased less than 83% – the 25th-worst in our study.

2. Monroe, MI

About 40 miles south of Detroit, the Monroe metro area ranks as the second-worst housing market for growth and stability. There is a 44% chance of a significant price decline for home buyers and from 1997 through 2021, the average home price index increased by only 83.77% or an annualized rate of return of less than 3%.

To read more about the study and the other best and worst markets, click here

My comment: As we all know, home prices go up and come down over time. But it is fun to watch prices rise!


Want ANSI info? Go to!


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.

My comments: Rates are going up. Make money while you can!!!Mortgage applications decreased 6.3 percent from one week earlier

Mortgage applications decreased 6.3 percent from one week earlier

Mortgage applications decreased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 1, 2022.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 10 percent from the previous week and was 62 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 9 percent lower than the same week one year ago.

“Mortgage application volume continues to decline due to rapidly rising mortgage rates, as financial markets expect significantly tighter monetary policy in the coming months. The 30-year fixed mortgage rate increased for the fourth consecutive week to 4.90 percent and is now more than 1.5 percentage points higher than a year ago. As higher rates reduce the incentive to refinance, application volume dropped to its lowest level since the spring of 2019. The refinance share of all applications dipped to 38.8 percent, down from 51 percent a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The hot job market and rapid wage growth continue to support housing demand, despite the surge in rates and swift home-price appreciation. However, insufficient for-sale inventory is restraining purchase activity. Additionally, the elevated average purchase loan size, and steeper 8 percent drop in FHA purchase applications, are both indicative of first-time buyers being disproportionately impacted by supply and affordability challenges.”

The refinance share of mortgage activity decreased to 38.8 percent of total applications from 40.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.8 percent of total applications. The FHA share of total applications decreased to 9.2 percent from 9.3 percent the week prior.

The VA share of total applications increased to 9.8 percent from 9.5 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.90 percent from 4.80 percent, with points decreasing to 0.53 from 0.56 (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 $647,200) increased to 4.51 percent from 4.40 percent, with points decreasing to 0.34 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.90 percent from 4.66 percent, with points decreasing to 0.68 from 0.71 (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 increased to 4.11 percent from 4.01 percent, with points decreasing to 0.53 from 0.55 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs increased to 3.82 percent from 3.70 percent, with points decreasing to 0.46 from 0.54 (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.


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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