Appraisal Risk, Reviews, and Revisions

By Ken Dicks

Excerpts: This is part three of a three part series on appraisal review – Read parts one and two. I am often posed with the following question “How do you know when you are looking at a “good” appraisal?” The reality is there is no universal acceptance of a single method of measurement to differentiate “good” from “bad.” After many years of reading appraisal reports, my response is “One that leaves the reader with few unanswered questions, allows the data to tell the story, keeps appraiser interventions to a minimum and is able to present a case for what a property is worth, as well as what it is not worth.”

Today, while there still remains some stickiness to the QC revision process, a recent survey completed by The STRATMOR Group commissioned by appraisal management technology company Reggora, indicates 25% of appraisal reports require some form of revision. While that number may seem high to some, in the context of lending and property complexities, that is a 54% improvement in performance cited earlier in this article (from 35% 10 years ago). Is there room for more improvement? Of course, there is always room for process improvement, but on the face of it, some process improvements appear to be yielding results.

Consistent application of both quality control and quality assurance processes for appraisal review may also be in part a reason for improvement, as appraisers have a better understanding of what is needed by their client. Additionally, the tools available to both appraisers and appraisal reviewers have undergone iterative process changes and users have advanced further up the learning curve. Lastly, many lenders have progressed beyond the initial risk identification stage, or the “gotcha stage” to a holistic and strategic approach that accepts risk into their business objectives. Today lenders and stakeholders have the ability to gain risk insight beyond the initial transaction stage and utilize pattern and trend identification.

To read more, click here

My comments: Links to Part 1 and 2 are in the first line of the post. View from the AMC/Lender side. Good that reviews and reconsideration requests have gone down. Appraisers and AMCs spend less time and have fewer hassles.

Appraisal Business Tips 

Humor for Appraisers

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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, mortgage origination stats, etc.

Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!!

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 Reviews and Revisions, AMC layoffs, real estate market, unusual homes, mortgage origination stats, etc.


Reno-based Clear Capital lays off more than a quarter of its ‘global workforce’

Excerpts: “The impact of a rising interest rate environment in the mortgage industry has resulted in a significant decrease in volume from our customers, which has forced us to make some difficult decisions,” Andrews added. “We are working closely with each employee during this transition.”

Clear Capital did not provide a specific number for the layoffs, only saying that the decision affects “27% of Clear Capital’s global workforce.” Clear Capital has its headquarters in Reno as well as offices in Truckee and Roseville, California, and Bloomington, Minnesota.

The layoffs represent a dramatic reversal in fortune for Clear Capital. Just last November, Clear Capital announced that its workforce reached 1,400 employees across all four of its subsidiaries. At the time, the company said it had just hired 350 new employees and was planning to add 170 more.

To read more click here

My comments: Many thanks to Reno appraiser Linda Hill for sending me this article from a Reno newspaper. I received an email yesterday from a Clear Capital staff appraiser who was laid off. Clear Capital has been around for a while. I hope you don’t have many accounts receivable from AMCs. If you do, start trying to get paid ASAP. Employees must be paid first. Independent appraisers may get something. The squeaky wheel appraiser gets paid first, before those who think they will get paid if they just wait… someday.

I have been through several significant appraisal business downturns. I learned the hard way what to do. The worst downturn I ever saw was from 1980 to 1985. Most appraisers were staff, and there were few fee appraisers. Almost all the staff lender res appraisers were laid off. When I started my business in 1986, there was no licensing, and very few appraisers left. I made a lot of money. I remember going to a local chapter SREA meeting that was packed with appraisers talking about how busy they were and their turn times were getting longer.

I regularly write about collecting past due billings in my paid monthly newsletter, with lots of tips. I have always collected all the money owed from my lender clients using the collection techniques I write about. Some AMCs have been expanding, including buying other companies, and may have financial problems.


Utah’s Largest Home Hits the Market With a Bowling Alley and Lazy River for $17.5M, discounted from the initial $21 million listing last year

Excerpts: Completed in 2013, the 50,738-square-foot compound has six bedrooms, 8.5 baths, and an eight-car garage. 156-acre site.

The lower level is all about entertainment, with a two-lane bowling alley, shuffleboard court, home theater, exercise room, sauna, and indoor swimming pool with a waterfall and a lazy river. “It’s bigger than any hotel pool I know of,” says Oman (agent), “with a lazy river, waterslide, and a platform for jumping into the pool with a rope swing.”

The home theater boasts tiered seating with 27 leather recliners, and the trophy room could easily be converted to a shooting range or game room, Oman says.

To read more and see lots of photos click here 

My comments: Definitely a Luxury Home!


How to Become a Luxury Home Appraiser

By McKissock

Excerpts: There are many reasons to consider specializing in this profitable appraisal niche. Not only can you charge higher fees while completing fewer assignments per month, but you’ll also have the opportunity to evaluate custom, high-end properties that are interesting and challenging to appraise.

Appraisers who excel in this specialized field are generally those who “are willing to spend the time necessary to complete extensive research, are willing to write detailed appraisal reports, and are willing to communicate and interact with real estate agents and builders in the luxury real estate market,”

Advice topics include:

Familiarize yourself with the luxury home market

Get started as a luxury real estate appraiser

To read more, click here

My comments: Now that many appraisers are slow and looking for options to appraising standard homes for AMCs, I am writing about alternatives, for both lender and non-lender appraisals, in my monthly newsletter.

Appraising luxury homes is a niche market. Often the appraisers are on special lender lists. This type of lender work has been available for many years. It is sometimes in a lender’s private banking group for clients with large deposits with the lender.

I know several local appraisers who specialize in them and get the work regularly. The market for a home could be regional, national, or international. The appraisers do extensive networking with the real estate agents who sell these homes, both for referrals and to find out the details on the property and the transactions.


In the October 2022 issue of the monthly Appraisal Today Newsletter

  • Appraisals for estates and trusts – the most popular non-lender appraisals, Part 2
  • Which are your best current and former AMC/lender clients? What do they want? Client Rating Grid

Coming in the November issue:

  • Communicating with non-lender clients: Very, very different from lenders!!
  • Tips for dealing with complex residential appraisals.

To read more about these topics, plus 2+ years of previous issues, subscribe to the paid Appraisal Today.

If these articles helped you get one more appraisal, it is worth the subscription price!


If you have any comments or info on any topics, please hit the reply button!! I’m always looking for something new ;>


Nearly Two-Thirds of Homebuyers and Sellers Are Hesitant to Move Somewhere With Climate Risk

Redfin Survey October 07, 2022

Note on graphic above: within a state, risk can vary widely, depending on location.

Excerpts: 62% of people who plan to buy or sell a home in the next year are reluctant to relocate to a place at risk of natural disasters, extreme temperatures and/or rising sea levels, though disaster-prone areas including Florida have still been attracting scores of homebuyers.

While the lion’s share of respondents expressed skepticism about moving to risky areas, these areas have seen more people move in than out in recent years. That’s partly because they often offer relatively affordable homes and/or access to warm weather and the outdoors. Cape Coral, North Port and Tampa—three Florida metros impacted by Hurricane Ian—consistently rank on Redfin’s list of top migration destinations, which is based on how many more users are looking to move in than leave.

Two-thirds (66%) of respondents who plan to buy or sell a home in the next year said climate change has impacted their home search in at least one way. The most common explanations were that climate change caused respondents to limit their search to homes that include certain features (17%) and that it impacted their home buying budget (17%). Meanwhile, 15% of buyers and sellers said climate change caused them to search in a different part of their area. The same share said it changed their search timeline.

To read more, click here

My comments: How does this affect value?

Lenders want fire insurance for all mortgage loans. What if there is no insurance available, very limited coverage, or only very expensive insurance? Or insurance problems for flooding, hurricanes, or other natural disasters. For example, Florida homeowners have had many problems getting flood insurance. Many residents don’t have flood insurance.

The greatest damage and deaths are from water, not wind, in hurricanes. I had a friend many years ago who grew up in Florida. She had parties with her friends during hurricanes and never had much if any, flooding.

How does this affect value?  Maybe, maybe not.

For many years, my brother lived in an area in Northern California with regular wildfires. I learned how to check his risks on several websites during fire season. The fires have definitely been getting worse. The last one, in September 2015, destroyed nearly 2,000 structures. Getting fire insurance is very, very expensive and getting more difficult to obtain in his area from any insurance company. The state of California offers the FAIR Plan, but it has limited coverage and is very expensive. My brother, and everyone else who owned property there were very worried about getting fire insurance.

My personal risk is earthquakes. I live between two major earthquake faults; each is 10 miles from me. I have earthquake insurance, which has limited coverage and is very expensive. Few people have it. Lenders don’t require it. I have earthquake survival kits in my home and car. Does not appear to affect marketability or values, even if you are on the earthquake fault.  Major earthquakes causing property damage do not occur very often. We try not to think about the “Big One,” but it does not affect values.

Several years ago, new Flood Maps were done by FEMA for California cities near the ocean that could be affected by sea level rise. There was a big meeting in my city, and the only question was: How can I get out of buying flood insurance? Surveyors had lots of business to see if the home was not in a flood zone. I have never heard about any sellers that were offering lower prices or buyers who were worried about flood risk. The most affected area was the adjacent Oakland Airport which sometimes floods with heavy rain and King Tides (high water level). They are working on flood mitigation.


Appraising in a Fast-Changing Market

By Ken Dicks, October 3, 2022

Excerpts: The first thing I would say about this is that the longstanding rule that the best defense is a strong offense applies. Before anyone even tries to tell you what the property value index is for a given marketplace, the professional appraiser should already be aware of what is made available to market participants. Appraisers track such data. It’s just part of our job.

The second thing, and most everyone who is tracking this data already knows this, is that this data and the indexes that spring from them are all lagging indicators of the health of a given market. The data we see is typically a few months old. In a market that moves as quickly as ours is, often that can be too old.

Inventory levels have an impact on property valuation, at least in the short term. Appraisers need to take this into account and be relied upon as the voice of reason when industry participants release their news, whether that be NAR, Zillow, Case-Shiller or anyone else with some data and an index.

I can see why loan officers, real estate agents, or buyers might push back on appraisers’ conclusions.

To read more, click here

My comments: Short, with some good, practical tips. I keep saying these ideas over and over. Sales are old data. Listings, pendings, etc. is what is important in a changing market. No one knows when the market will start declining, but appraisers are all watching for any indications of local change.


The Bloomhouse – Fairy Tale Escape in Austin, TX

Excerpts: 1 bedroom, 2 beds, 1 bath

Come take a vacation from the real world of right angles and ticky tacky boxes. Situated on a secluded lot and wonderfully restored, The Bloomhouse is a celebration of all things magical and mystical.

Without one straight line or corner in the entire structure*, your thoughts are free of the constraints that our angular world creates. At the Bloomhouse, you leave behind the confines of modernity and the rules of logic, to live only in whimsy. We are alive in a fairytale of our own making. Let the story begin.

In 2017, Dave Claunch saw a real estate ad fall out of an Austin Business Journal for the Bloomhouse – a local legend he had learned about during his time as mayor. Claunch knew he had to save and preserve this one-of-a-kind place. Since buying the home, Claunch has spent over a year meticulously restoring the home with period-specific details to take it back to its original form.

To read more and see lots of photos, click here

My comments: I need to Escape! This home would be one of those appraisal assignments where you keep driving closer and closer, and you realize a Big Challenge and hopefully a big fee ;>


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 go to Or call 510-865-8041, MTW 7 AM to noon, Pacific time.

My comments: Rates are going up. Some appraisers are very busy, and others have little work. Varies widely around the country.


Mortgage applications decreased 2.0 percent from one week earlier

Mortgage applications decreased 2.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 7, 2022.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week and was 86 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 39 percent lower than the same week one year ago.

“Mortgage rates moved higher once again during the first week of the fourth quarter of 2022, with the 30-year conforming rate reaching 6.81 percent, the highest level since 2006. Mortgage rates increased across all product types in MBA’s survey, with the largest, a 20-basis-point increase, for 5-year ARM loans. The ARM share of applications remained quite high at 11.7 percent – just below last week’s level,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Application volumes for both refinancing and home purchases declined and continue to fall further behind last year’s record levels. The news that job growth and wage growth continued in September is positive for the housing market, as higher incomes support housing demand. However, it also pushed off the possibility of any near-term pivot from the Federal Reserve on its plans for additional rate hikes.”

The refinance share of mortgage activity remained unchanged at 29.0 percent of total applications. The adjustable-rate mortgage (ARM) share of activity decreased to 11.7 percent of total applications.

The FHA share of total applications increased to 13.5 percent from 13.2 percent the week prior. The VA share of total applications increased to 10.9 percent from 10.7 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 6.81 percent from 6.75 percent, with points increasing to 0.97 from 0.95 (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 6.25 percent from 6.14 percent, with points decreasing to 0.61 from 0.79 (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 6.61 percent from 6.60 percent, with points increasing to 1.71 from 1.51 (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 6.12 percent from 5.96 percent, with points increasing to 1.30 from 1.08 (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 5.56 percent from 5.36 percent, with points decreasing to 0.9 from 1.02 (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


We want to know what you think!! Please leave a comment.