Problems When Appraising Airbnb & VRBO Properties

by Richard Hagar, SRA

Excerpts: Residential appraisers are being asked to appraise these properties, along with their elevated income, as “typical” residential properties. These requests involve homes in numerous vacation spots ranging from Sedona, San Diego, Montana, Lake Tahoe, to Miami, New York, Seattle, New England, and every vacation spot in between.

Appraisers are being told by their AMC clients and loan officers to appraise these as residential properties. They are told it’s fine to use the total yearly income and “simply divide by 12” to produce a monthly income that can be used to value these places using a Gross Rent Multiplier (GRM). But is it really that simple? Short answer—no. Long answer—it’s complicated.

First of all, the value of an STR has three major components:

1) the real estate,

2) personal property, and

3) the business.

The business side includes replacing worn out or damaged furniture, window coverings, bedspreads, towels, the property’s internet listings, credit card processing, weekly cleaning, and daily management decisions involved with running the STR business. On top of that, what if the credit card is stolen and the last party animal damaged the house or fell off the deck and wants to sue the owner for a defective deck railing? STRs are far more than real estate; they include a business also known as a “growing concern” or intangible property.

To read more, click here

My comments: If you want to know more, before (or after) accepting an Airbnb appraisal, definitely read this article. The article is one of the best I have read, and includes many of the AMC, USPAP, GSE, etc. issues. The article has a link to Richard’s webinar on the topic. I have known Richard Hagar for many years. He is one of my go-to appraisers for these types of issues. He is an excellent teacher. Taking his classes is definitely worth the time.

Residential Appraisals and Airbnb Income?

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please click read more below for the other topics in this long blog post on  review appraising, 3d home new subdivision in Texas,  unusual homes, mortgage origination


Connecticut’s Woodstock Castle Listed for $26M after Price Drops starting at $45M

Excerpts: The 18,000-square-foot castle with 9 bedrooms and 7 baths, also known as Chris Mark Castle, was built in 2010.

But whether the Woodstock, CT, chateau actually finds its next ruler, remains to be seen. After all, this isn’t the first time the unique property has been listed. It’s been on and off the market since 2014, four years after a lengthy construction project there was completed.

The regal real estate was first listed in 2014 for $45 million. Still on the market for the same amount in 2015, the eye-popping property ranked as one of the most viewed homes on®.

But that popularity did not translate into a sale, and the stately dwelling returned to the market more recently in 2021 for $35 million.

But then the price jumped in 2022 to a high of $60 million, before the listing was removed.

And now, the chateau is again up for grabs. Most recently, the 2010 build became one of the most expensive homes on the market when it hit the market in early August at the greatly reduced $26 million listing price.

To read more click here

My comment: Very interesting, and challenging, appraisal! Nothing in the writeup about why it did not sell, of course. Overpriced??



First finished homes projected to be finished in September, 2023.What Fannie Says About 3d Printed Homes in Announcement SEL-2023-08September 6, 20233D printed homes are an innovative building technique that brings efficiency and potential cost savings to new home construction.

To address questions regarding property eligibility and comparable sales requirements, we are clarifying our policy that a 3D printed home with a traditional design and constructed using conventional building materials is not considered a unique or nontraditional type of housing as described in the Selling Guide.

Lenders should follow the standard eligibility and comparable sale selection requirements for site-built housing.

To read announcement (scroll down to 3d Printed Homes) click here


The world’s largest 3D-printed neighborhood in Texas

July 26, 2023

Excerpts: The world’s largest community of 3D-printed homes is being built in Texas — and the neighborhood just unveiled its first completed house. With walls “printed” using a concrete-based material, the single-story structure is the first of 100 such homes set to welcome residents starting September.

The community is part of a wider development in Georgetown, Texas called Wolf Ranch. It’s located about 30 miles north of Austin, the state capital, and is a collaboration between Texas construction firm ICON, homebuilding company Lennar and Danish architecture practice Bjarke Ingels Group (BIG).To read more, click here

My comments: I have been reading about 3d printed homes for awhile, but most are tests with only one or a few homes. This is the first subdivision being built that I have seen. Interesting that the Fannie change came out September 7.


New in the September 2023 issue of Appraisal Today

Appraisers vs. Lenders. What Can We Do?

By Tim Andersen, MAI
Tim Andersen has some very interesting analyses of Appraisers Vs. Lenders, such as are we required to “protect the consumer/mortgagor?”, appraiser fees, desktop appraisals, lender boilerplate and much more. He includes Fannie and USPAP references, of course.

How to communicate with appraisers online. What’s the best for you?Appraiser groups – politics, lurkers, comparison of online services, Twitter, Facebook, Linkedin, appraisersforum, handling too many emails, and lots more. I use all the services I write about.

To read more about these topics, plus 2+ years of previous issues, including many non-lender appraisal articles, subscribe to the monthly Appraisal Today


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The Full Measure with Kevin Hecht: Economic Recap August 2023By: McKissock

August 30, 2023

Excerpts: Uncover this month’s economic trends and insights—written from an appraiser’s standpoint in this economic recap for August 2023.Topics include: The Fed, Home Sales, Employment, Mortgage Rates and Commercial Real Estate.In an ever-evolving economic environment, key aspects such as inflation, employment, and the housing market are undergoing significant changes in August 2023.

This post analyzes the recent data and insights, highlighting potential impacts and the overarching market conditions.

Predictions suggest a steady rate within the 6% to 7% range for some time. However, some experts, including Lawrence Yun, Chief Economist at the National Association of Realtors, anticipate a drop to about 6% by next spring, influenced by economic factors and the Federal Reserve’s decisions. For the remainder of the year, mortgage originations are expected to remain stagnant. Still, a revival in purchase originations is anticipated in 2024 as the market adjusts and more homes become available.

Understanding the interplay between inflation, employment, housing, and interest rates becomes paramount as we traverse this intricate economic terrain. While challenges persist, it’s vital to interpret these trends with a balanced view. By staying informed, stakeholders can make more strategic decisions, ensuring stability and growth in the face of uncertainty.

To read more, click here

My comments: I skim over lots of economics articles, but prefer these as they are understandable and written by a practicing appraiser who teaches economics.


6 Key Competencies to Perform Appraisal Reviews

By: McKissock

Excerpts: As a real estate appraiser, how do you know if you can credibly perform appraisal reviews? USPAP provides the review appraiser with plenty of flexibility grounded in ethics and competence. Competence comes with knowledge and experience, but it also requires you to possess specific skills, technology, and abilities. To better understand if you’re prepared to review appraisals, we’re sharing the six key competencies you’ll need.Each property is unique, and so is each review assignment. When you’re offered an assignment, weigh your competence against the task to ensure you can perform the appraisal review properly.

Per the USPAP Competency Rule, “an appraiser must determine, prior to agreeing to perform an assignment, that he or she can perform the assignment competently.”Even if you were competent for an assignment yesterday, you may need to acquire more knowledge or obtain access to data to remain so for a new assignment, because it is a different market or a different property type.

To read more, click here

My comments: You may consider learning about another source of income while you are slow. This article includes information on commercial reviews, but many tips also apply to residential. There are both residential and commercial review opportunities.

If you review appraisals now, there are some good tips in this post.Many years ago, after doing too many reviews of incompetent appraisers, I decided I would rather do the appraisal than review it and do a new appraisal.


Moat and Waterfall at This $880K Midcentury Modern Inspired Home in Vermont

4 bedroom, 3.5+ bath, 2,908 sq.ft., 1.3 acre lot

Excerpts: Combining midcentury flair, Bauhaus influence, and a touch of contemporary style, the 2,908-square-foot dwelling was the brainchild of self-taught architect Donald McKnight. He worked on many local projects at Norwich University in Northfield, VT, and on the North Barre Manor, which is the town’s tallest building. McKnight died in 2020 at the age of 87.
“The waterfall has been a huge hit since we put the home on the market,” the owner shares. “You can adjust the level of the waterfall pretty easily. You just take the boards out, and the water level will go to the ground. It’s like a dam the way it is set up.”There is an in-law suite on the left side, along with a full house on the right side.

To read more and see photos, click here

To see the full listing with a virtual tour and more photos, click here


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 busy, and others have very little lender work. Varies widely around the country.

Mortgage applications decreased 2.9 percent from one week earlier. 28 Year low.

WASHINGTON, D.C. (September 6, 2023) — Mortgage applications decreased 2.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 1, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 30 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 5 percent compared with the previous week and was 28 percent lower than the same week one year ago.

“Mortgage applications declined to the lowest level since December 1996, despite a drop in mortgage rates. Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

“The 30-year fixed mortgage rate decreased to 7.21 percent last week, but rates remained more than a full percentage point higher than a year ago, despite mixed data on the health of the economy and signs of a cooling job market. The refinance index dropped to its lowest level since January 2023, driven by a 6 percent decline in conventional refinances.

”The refinance share of mortgage activity decreased to 30.0 percent of total applications from 30.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.7 percent of total applications.

The FHA share of total applications increased to 13.7 percent from 13.2 percent the week prior. The VA share of total applications decreased to 11.3 percent from 11.6 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 7.21 percent from 7.31 percent, with points decreasing to 0.69 from 0.73 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) decreased to 7.21 percent from 7.28 percent, with points increasing to 0.76 from 0.66 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 7.03 percent from 7.10 percent, with points decreasing to 0.95 from 1.09 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 6.66 percent from 6.72 percent, with points decreasing to 0.86 from 1.11 (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 decreased to 6.33 percent from 6.48 percent, with points decreasing to 1.11 from 1.20 (including the origination fee) for 80 percent LTV loans. The effective rate decreased 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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