Appraising Solar Panels

By Mark Buhler

Excerpts: You drive up to the property. There they are, on the roof: those shiny black rectangles that are just about to turn a simple assignment into a headache. What to do? Put the car in reverse and slowly back away? Call the client and have them re-assign the order?

Those are certainly options. But in today’s tight market, with orders as scarce as hens’ teeth, let’s explore some other approaches to solving this problem.

First: How do appraisers value any amenity of a property?

Appraisal 101 would suggest the matched pairs analysis. So our first task is to find a property with solar panels that’s similar to the subject.

That search quickly comes to a screeching halt. (I can almost smell the brake dust.) There are no comps with solar panels in the area. So when we type the report, a comment like this might slip past the reviewer and underwriter: “A thorough search of the subject’s marketing area revealed a scarcity of sales comparables with solar panels.”

So far, so good. Now let’s continue with that reasoning: “Due to a lack of comparables with solar panels, no contributory value can be extracted.”

This supports a zero (0) adjustment, right?

Well … maybe. A savvy underwriter or reviewer might wonder why the appraiser didn’t consider the cost and income approaches…

To read more click here

My comments: Good, practical advice. The article is worth reading. Solar for homes is everywhere now. I recently spoke with Mark. I asked some technical questions about financing solar and electric companies lowering what they pay to homeowners with solar. He knew everything! Taking a webinar or class from him is definitely worth the price. He has been teaching the classes for a long time.

Complex Residential Properties for Appraisers

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, mortgage origination stats, etc.

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


How to Tackle Unusual Appraisal Problems

By McKissock – 40 minute video plus text comments.

Excerpts from text: No two real estate appraisal assignments are alike. Some of the more unusual cases will require a more “thinking outside the box” approach.

In this episode of our podcast, Beyond the Numbers with McKissock Appraisal, Jason Ormiston, owner of Todd Appraisal, Inc. and a Certified FHA Approved Appraiser for over 15 years in the Kansas and Missouri markets, provides expert advice on how to tackle unusual appraisal problems.

1. Remember the basics

When it comes to unique cases, you always need to remember the basics. Setting client expectations is a critical first step in any real estate appraisal assignment. Make sure you’re fully aligned with your client every step of the way in order to set the tone and help prevent potential dissatisfaction…

2. Reach out to your professional network

When tackling unusual appraisal problems, contact other appraisers in your professional network who may have encountered the same or similar issues in the past. “When I get an appraisal problem that I don’t know, I have a pretty deep reservoir of people upon which to draw, who I can just call and bounce ideas off of,” says Ormiston…

3. Gain experience by assisting other appraisers

“Nothing beats experience,” Ormiston says. The best way to learn how to tackle unusual appraisal problems is to get out there and get experience under your belt, especially if you’re a new appraiser. If you receive a request for an oddball appraisal that you cannot accept due to lack of competency, instead of just passing it off by referring it to another appraiser with more experience, why not reach out to the appraiser and ask if you can tag along on the assignment?..

To read more, click here

My comments: All appraisers are asked to do the “tough ones. This is a very good video and short blog post with practical ideas. When I started my appraisal business in 1985, I had only worked for an assessor’s office and had never seen a Fannie form. I established a network of very experienced local appraisers for advice on both residential and commercial appraisals. I still rely on many of them. I met them at two monthly local appraisal organization chapters which I attended every month when I started my business.

I frequently see posts on social media asking for help, but often what is needed, especially for residential, is local appraiser advice. Whom do you call for advice?


How to Get Full Lender Appraisals
The GSEs are shifting away fast from full appraisals.

How to get on Lender and AMCs’ Exclusive “First To Call” Lists for full tough appraisals. They all have them!

Appraise what many appraisers don’t want to do or don’t know how to do: non-conforming homes, the “Tough Ones”. and 2-4 Unit properties. When we were busy I kept hearing about AMCs sending the same difficult appraisal to many appraisers whom all rejected them. Now, they are accepting them at reduced fees and fast turn times but are not always competent and experienced and don’t pass reviews. AMCs have to find someone else. AMCs still need appraisers to complete these appraisals who are competent and knowledgeable in handling the issues.

How to get on AMC/lenders’ lists of Who To Call for Tough Appraisals. Make up a list of the your classes, CE, difficult appraisals, etc. in a short resume you can send. Call AMCs you worked for and speak to a person you communicated with. Ask them how to get on the exclusive lists.

The advice above on doing unusual appraisals can really help.

If you want to continue AMC/lender appraising and need more education and training, get it now while you’re not very busy. Take local education so you can network with other appraisers. It is hard to change if you have always been appraising easy properties, such as conforming tract homes, but you can do it. Re-take basic appraisal education classes, learn how to appraise unusual situations such as excess land and acreage, etc. Use the examples in the above article to get someone to help.

You can always do desktops and inspections for low fees and fast turn times, of course. Nothing wrong with that, but I don’t see the GSEs shifting back to full appraisals in the future.


Part-Time Job When Appraisal Business Is Slow – Real Estate Agent Assistant!

This slow time will not last forever. Mortgage lending is very cyclical and dependent on mortgage rates. Not many appraisers have established a good non-lender business, which takes time.

About 3 years ago, a friend got her real estate sales license. I recommended being an agent assistant to get started. All the top brokers in my local market have assistants. I spoke with several of them. They said a real estate license was good because they could hold open houses and answer questions (required in California). If not licensed, the person could handle the paperwork.

Appraisers would be great for this job, especially compared to applicants with no real estate experience.

I just googled real estate assistant in my area. Lots of jobs. Check your area. See what qualifications they want and what they pay. At least you will be using your real estate experience until lender appraisal business picks up. You will also see, and understand better, the “other side” of real estate – sales, when communicating with agents.

I recently spoke with a long time local appraiser who is moving to another state. She wants to continue working part-time to keep busy and is thinking about working for a real estate office, as a receptionist, or another job. She does not want to work in the field any longer. No more bushes with thorns, dog poop, etc. I completely understand ;>

Also, consider appraisal offices. I spoke recently with an appraiser who does both commercial and residential appraisals. He is very busy and needs an assistant to handle all his paperwork.

If you have any ideas on part time jobs for appraisers without much appraisal business, please hit the reply button!


Massive Geometrical House on the Malibu Coast for $68.8 Million

Excerpts: This Malibu beach house comes with a music studio, a movie theater and seriously good vibes. Internally you’ll find soaring 29-foot ceilings, curved walls of glass, dramatic steel beams and a whopping 47 skylights. There are also four bedrooms and five and a half bathrooms spread across its 7,600 square feet of living space. The pad is comprised of eight connecting structures, which take the shape of triangles, cylinders and cubes.

Listed for a whopping $68.8 million, the glass-and-steel Southern California mansion was designed by famed contemporary architect Ed Niles. Its current owner, Dr. Wei-Tzuoh Chen, tapped Niles to construct the abode after buying the property back in 2003, The Wall Street Journal first reported.

The project took roughly six years to complete and has served as the family’s vacation home. Taking Chen’s Chinese heritage into account, the futuristic-looking residence adheres to traditional feng shui principles. In fact, its position on a hill and 75 feet of water frontage were two selling points for Chen. He also had the home built so it was facing south, the most auspicious direction in feng shui.

To read more, click here

My comments: I have a music studio in my garage but really need a movie theater. I always like good vibes also ;>

In my market, feng shui is very important to some buyers. Factors such as whether or not anyone died in the home, direction front door faces, etc.

Several times in the past I could not find a comp by looking at addresses. I checked the plat map, and I was looking at the same property, but with a different address than the outdated public records. The street address had been changed at the buyer’s request and approved by the city. I included an explanation, and a photo with the address on the home visible, in the appraisal.

Information on feng shui is too complicated for my comments. Sometimes it can be fixed. Be aware of this possibility in your local market if address is an important factor for some buyers.Click here for the 4 ways, plus information on why I take ads, etc.


Tips for Dealing with Complex Residential Appraisals

By Joseph Lynch

Excerpts: This article is not intended to be an in-depth examination of the many ways a residential appraisal can be complex nor how to solve every complex appraisal problem you encounter. Instead, the purpose of this article is to get you thinking about the issues involved with complex residential assignments.

I will offer two definitions of complex assignments, discuss categories of complexity, provide examples I’ve encountered in my business recently, mention business considerations, offer some problem-solving techniques, and will break down in detail an assignment with a lot of issues. Finally, I offer advice for increasing your skills with complex residential assignments.

Some Methods for Dealing with Complexity

Expand Your Scope of Work

Complex residential appraisals require more work by nature. Expect to spend more time on the assignment and to take the necessary steps to address any complexity.

Define your Subject’s Market

When you first realize that you might have a complex assignment on your hands, spend some time considering the subject’s market. Where would potential buyers of the subject look for competitive homes? This is the starting point for your data collection.

Unpeel the Onion-Expand Outward Geographically

For complex assignments, you often need to expand outside of the typical box for your search for comparables. Should you limit your comparable data search to only the subject’s neighborhood? Or does it make sense to look throughout the subject’s city? Or is it one of the best homes in the county? Does it have regional appeal?

Research, Research, Research!

Above is a brief excerpt from a very long comprehensive article on this topic in the November 2022 issue of Appraisal Today, available to all paid subscribers.


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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 ;>


The Danger Zone

by Scott Cullen, MNAA

The danger zone is anytime within a twelve-month period when the market changes. USPAP is clear on the appraiser’s responsibility. According to SR 1-3 lines 515 and 516, “An appraiser must avoid making an unsupported assumption or premise about market area trends, effective age, and remaining economic life.” Use of the cost approach to support effective age and remaining economic life has not changed. But we need to get better with market area trends.

Most of us learned how to adjust on the way up in our recent, low interest rate seller’s market. We could not ignore time adjustments any longer.

Grouped data worked well because comparing medians at two points one year apart made sense when the trend was up for the past few years. But times have changed rapidly. In today’s market, you need to know how to spot a turn in the market and how to support adjustments no matter which direction the market moves.

Many of us are in a danger zone because our markets are changing too fast for our old way of calculating market time adjustments. We are at risk of over-valuing properties that may be under water a year from now if rates stabilize at historic levels.

To read more, click here

My comments: Scott is definitely an expert on adjustments. This article has lots of graphs and practical tips on doing market condition adjustments, the easiest adjustment to make. I quit making adjustments on form reports for non-lender appraisals many years ago, but I always make market conditions adjustments when needed. My market has had many ups and downs since I started appraising in 1975.

If I am not using a narrative report, I use non-lender forms in my forms software and leave all the dollar adjustment fields blank. If the market is stable I also include that information.


How Fannie Manages Appraisal Quality

April 18, 2023

By Jake Williamson, Fannie Mae Senior Vice President, Single-Family Collateral Risk Management


State Referrals

Based on our AQM reviews, we occasionally provide tips to state appraiser regulatory boards about appraisals with severe deficiencies.

Text Scanning

Based on the results of the 2022 appraisal text scanning review, Fannie Mae sent more than 400 new AQM letters to appraisers with multiple findings. The most common findings were the use of the phrases “desirable location,” “desirable neighborhood,” and “good neighborhood.”

Appraisal Undervaluation and Overvaluation Risk Flags

Between July and December 2022, the undervaluation risk flag fired on approximately 4% of appraisal submissions while the overvaluation risk flag fired on slightly more than 15%.

To read lots more, click here

My comments: Worth reading to see what Fannie does. Written for lenders and appraisers.


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, click here.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 and down. Some appraisers are very busy, and others have little work. Varies widely around the country.


Mortgage applications increased 3.7 percent from one week earlier

Mortgage applications increased 3.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 21, 2023.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 5 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week and was 51 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 28 percent lower than the same week one year ago.

“Both conventional and government home purchase applications increased last week. However, activity was still nearly 28 percent below last year’s pace, as high mortgage rates and low supply have slowed the market this year, even as home-price growth has decelerated in many markets across the country,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinance applications also increased last week but remained at half of last year’s levels. Although incoming data points to a slowdown in the U.S. economy, markets continue to expect that the Fed will raise short-term rates at its next meeting, which have pushed Treasury yields somewhat higher. As a result of the higher yields, mortgage rates increased for the second straight week to their highest level in over a month, with the 30-year fixed rate now at 6.55 percent.”

The refinance share of mortgage activity decreased to 26.8 percent of total applications from 27.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.7 percent of total applications.

The FHA share of total applications decreased to 12.6 percent from 12.7 percent the week prior. The VA share of total applications decreased to 11.2 percent from 11.7 percent the week prior. The USDA share of total applications decreased to 0.4 percent from 0.5 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.55 percent from 6.43 percent, with points remaining at 0.63 (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 $726,200) increased to 6.40 percent from 6.28 percent, with points decreasing to 0.5 from 0.51 (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 6.41 percent from 6.33 percent, with points increasing to 1.04 from 0.94 (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 6.03 percent from 5.89 percent, with points decreasing to 0.56 from 0.65 (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 decreased to 5.47 percent from 5.56 percent, with points increasing to 1.18 from 0.72 (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.

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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