2024 USPAP

Source: Appraisal Foundation

The 2024 Uniform Standards of Professional Appraisal Practice is now available for purchase in physical and digital formats.

This year, for the first time, you can purchase just the book of USPAP standards for $35. This covers all Definitions, Rules, and Standards.

We also have a new product launching this year. All Advisory Opinions, Frequently Asked Questions and the recently launched Reference Manual will now be part of a standalone publication called the 2024 USPAP Guidance and Reference Manual.

This change reflects the maturation of USPAP, resulting in longer effective dates. The ASB will continue to review USPAP for changes when necessary but will shift much of its focus to providing more guidance to the marketplace. Appraisers can now buy one set of USPAP standards and keep that publication on their bookshelf for as long as that edition is effective and purchase just the Guidance and Reference Manual as needed for coursework and updates.

If you like having the USPAP standards and guidance material linked, we still have you covered. You can also purchase a linked digital version of the eUSPAP and Guidance and Reference Manual and get seamless access across both documents.

To read the full letter, click here

My comments: USPAP 2024 is effective January 1, 2024. I’ve been waiting for a very long time for longer than 2 years between effective dates. Also, there is no ending date for the 2024 version.

When USPAP started, it was very exciting as appraisers had to decide what needed to be changed or added. Lots of people wanted to be on the ASB. Over time, I quit following the updates as there were few significant changes.

2024-2025 USPAP 7-Hour Update Course is being approved or is approved, in the states. I assume a new class will be required every two years in the future. Gotta keep that money coming into the Appraisal Foundation, I guess…

I really hated the classes when there was not much to say except a rehash of the past. I taught USPAP before the ASB told you what to teach. It was my favorite class as we could focus on issues in our current market. Of course, now there is appraiser discrimination, the current hot topic. Personally, I think there is very, very little intentional discrimination by appraisers, compared with the intentional discrimination by lenders (and others). “Red Lining” still exists, some are in the same locations.


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NOTE: Please scroll down to read the other topics in this long blog post on  non-lender appraisals, economics analysis, Fannie getting rid of appraisers?, unusual homes, mortgage origination


FNMA Continued Effort to Get Rid of Appraisers

By Jonathan Miller, Sept. 29, 2023

Excerpts: For the past year, Fannie Mae has sent unsigned complaints to state appraisal boards; when they see something they don’t like, they write it up and send it to the state. In their recent newsletter, this effort is called “Tips.” They emphasize they are not automated:

LQC reviews are not automated. Our expert analysts validate the appraisal results by asking questions like “Do the comparable sale selections make sense?”, “Is the data accurate?”, “Did the appraiser make appropriate adjustments?” and “Are we getting the most probable value?” in context of a comprehensive database of property characteristics and market transactions.

Yet because these “tips” are not signed and the reviewer is not identified, there is no accountability to the reviewer. I always thought the accused could face their accuser in a court of law in America. Fannie Mae plays havoc with appraisers’ livelihood and infers that the reviewer is perfect in every one of their reviews.

This is incredibly unethical on the GSE’s part and speaks to the absolute lack of respect for the last person in the home-buying process that stands in the way of a transaction.

As this property data collector thing moves along, there continues to be no legitimate reason for Fannie Mae’s motivation to push this so hard other than they want the valuation process fully automated and can pay $25 for an untrained inspector to view a home. It shows a fundamental lack of understanding of what appraisers do. Fannie Mae sees the appraisal process as “inspection + value.” Yet, the idea of sitting at the desk and relying on some stranger to gather the nuances of the property to generate a value is wildly flawed.

Fannie Mae culture has always believed they can do everything independently with their numbers. Still, they are diluting the quality of those very same numbers by allowing random people to collect on-site information. It’s insane, actually.

How about some appraisers? There is a real estate appraiser section with some of the brightest appraisal minds in the industry, and yet…no contribution to this report about property data collectors. I’m only making the point that appraisers seem to be the last people asked when looking at the appraisal process by virtually every institution that does so. Perhaps that’s by design, in this case, to make the results more compelling.

To read more, click here

My comments: I recently wrote about this in my weekly newsletter, including the NAR member survey, which was very negative about data collectors. I read Jonathan’s posts every week. But, sometimes, they are controversial. I don’t have any way for people to respond; I hope they will be posted on appraisersblogs!

The data collector qualifications need to be standardized. Each AMC sees it differently. Appraisers are licensed and regulated. Next month’s newsletter will have a lengthy article on the issues of the property inspector.

I wonder how well the GSE AI works on rural appraisals, “one of a kind” properties, no permits, Highest and Best Use issues, and many more.


Home in Beverly Hills, CA for $85M

Excerpts: 12 Bedrooms, 15 baths, 24,325 Sq Ft (across multiple structures), 1.2 Acres

Take in sweeping views of the grounds and the surrounding canyons.

The primary bedroom suite is a sanctuary with dual bathrooms, exceptionally spacious closets and a private balcony that overlooks the lush yard.

Amenities abound find a theater with a bar, game room, wine cellar and dedicated cigar room; a three-story accessory building; a pool/spa and pool house with bedroom quarters; a gym and sauna; and two garages that provide parking for eight cars

To read more and see a virtual tour plus 67 photos, click here


New in the October 2023 issue of Appraisal Today

  • Private money lending – no AMCs, UAD, computer “reviews,” low fees, etc. Marketing, Forms, Scope of Work, What they Want, Getting names of companies, and many more topics. Very little competition and good fees.
  • Valuation By Comparison by Mark Ratterman, MAI Book Review. Mark is the best residential writer I have ever read. Take some time to read what he says. Well worth it.
  • Residential vs. commercial appraisals – fees, reports, reviews, competition, how to get started, etc. It’s much better than AMC lender residential appraisals! Current market conditions: How to switch from all residential to both residential and commercial. Lots more opportunities. I am forecasting lots of office and apartment foreclosures which will need appraisals

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


What’s the difference between the Appraisal Today free Weekly email newsletters and the paid Monthly newsletter? Click here for more info!


If you are a paid subscriber and did not get the October 2023 issue emailed on Monday, October 2, please email info@appraisaltoday.com, and we will send it to you!! Or hit the reply button. Be sure to put in a comment requesting it.


The Pitfalls of Outlier Sales in Pricing a Listing (And doing an appraisal)

By Tom Horn September 27, 2023

Excerpts: The topic of outlier sales came to mind recently when I noticed a sale in my market that was listed between two and three million dollars. The final sale price was around $6 million dollars!I don’t know the details of the sale, however, it made me wonder about how good of a sales comparable this would be if it was used as a comp when pricing another home.

Should it be used as a comp or should it be considered an outlier sale? The market area that the property is located in can definitely support the price but does the price truly reflect the market value of that specific property or does it reflect what a super motivated buyer with available funds is willing to pay? There is a difference.

Outlier sales refer to property transactions that significantly deviate from the typical or median sales price within a particular market area. These transactions can be characterized by unusually high or low prices when compared to similar properties in the same locality. In essence, they are statistical anomalies that can distort the perceived value of properties in a given area.

Outlier sales can occur for various reasons, including distress sales, unique features of a property, bidding wars, or simply a buyer willing to pay well above or below the prevailing market rates. While these transactions are not inherently wrong or fraudulent, they can pose serious challenges when it comes to using them as comps when pricing a listing.

To read more click here

My comments: Written for real estate agents, but there are good tips for appraisers if only to let reviewers, GSE AI, agents, etc., know why a comp was not used. I was taught that “one sale does not make a value.” Of course, we have all had situations where one sale was the best value indicator.

We included other sales in the appraisal, of course.Good analysis of outlier sales. I don’t think I have ever read much about them. The post also helps appraisers understand why and how agents use outliers to price their homes.


The Full Measure with Kevin Hecht: Economic Recap September 2023

Excerpts: In a pivotal move, the Federal Reserve maintained its benchmark Fed Funds Rate within a 5.25% to 5.5% range. Although unchanged, clear signals suggest a “higher for longer” rate strategy. The Fed forecasts just one more hike this year and two cuts in 2024, revising down from four. Chair Powell aims to guide inflation to 2%, though leading indicators reveal a possible recession. Historically, recessions bring rate drops.

We’ll explore what this means across the housing and commercial real estate sectors. Single-family home sales declined to a seasonally adjusted annual rate of 3.60 million in August, a decrease of 1.4% from July and a substantial 15.3% dip from August 2022. Concurrently, the median price for existing single-family homes was $413,500, marking a 3.7% year-over-year increase.

In conclusion

Mortgage rates persisting above 7% have dampened the housing market, dragging builder sentiment and shifting rent versus buy dynamics. Builders face diminishing buyer purchasing power and supply constraints, compounding affordability issues.

The Fed’s tightening stance may induce more volatility. Despite potential near-term breaks for buyers from seasonal patterns, first-timers especially confront stiff hurdles.

Careful tracking of economic indicators and how they interact with interest rates is vital in this unstable environment.

To read more, click here

My comments: This is the only economic post I regularly read. Written by a practicing appraiser since 1987 who is an Adjunct Professor of Economics at Maryville University


Spend the night in Shrek’s Swamp, now on Airbnb

Excerpts: Shrek’s mud-laden, moss-covered, murky-watered swamp is situated among the rolling hills of Scotland where guests can stay up late, swap stories, and eat like an ogre – because in the morning, Donkey’s making waffles!Once upon a time, a very chatty donkey agreed to swamp-sit for Shrek.

Before he hits the road again, Donkey is inviting guests near and far, far away to sleep like an ogre in Shrek’s Swamp, only on Airbnb.Located among the hills of the Scottish Highlands, Shrek’s Swamp is a stumpy, secluded haven fit for a solitude-seeking ogre – and for the first time ever, a handful of his biggest fans.“Shrek’s Swamp is lovely. Just beautiful. The perfect place to entertain guests,” Donkey said. “You know what I like about it? Everything. The overgrown landscaping, the modest interiors, the nice boulders, all of it

.$0 per night Booking opens Oct 13 at 10:00 AM PDT

Halloween is Tuesday, October 31, 2023

To read more, click here

My comments: I just had to include this pre-Halloween link ;> I always have lots of fun with my annual Halloween newsletter!

Lots of places, including where I and maybe you live, have strange buildings (often abandoned) and other odd occurrences. I have a haunted large naval carrier, the USS Hornet, in my city. Sleeping overnight is very popular for people of all ages—kind of Creepy and yet Exciting!


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 www.appraisaltoday.com/order 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 decreased 6.0 percent from one week earlier

WASHINGTON, D.C. (October 4, 2023) — Mortgage applications decreased 6.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 29, 2023.The Market Composite Index, a measure of mortgage loan application volume, decreased 6.0 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 7 percent from the previous week and was 11 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 22 percent lower than the same week one year ago.

“Mortgage rates continued to move higher last week as markets digested the recent upswing in Treasury yields. Rates for all mortgage products increased, with the 30-year fixed mortgage rate increasing for the fourth consecutive week to 7.53 percent – the highest rate since 2000,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.

“As a result, mortgage applications grounded to a halt, dropping to the lowest level since 1996. The purchase market slowed to the lowest level of activity since 1995, as the rapid rise in rates pushed an increasing number of potential homebuyers out of the market.

ARM loan applications picked up over the week and the ARM share increased to 8 percent, as some borrowers searched for ways to lower their payments.”The refinance share of mortgage activity decreased to 31.7 percent of total applications from 31.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.0 percent of total applications.

The FHA share of total applications increased to 14.5 percent from 14.1 percent the week prior. The VA share of total applications decreased to 10.1 percent from 10.9 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 ($726,200 or less) increased to 7.53 percent from 7.41 percent, with points increasing to 0.80 from 0.71 (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 7.51 percent from 7.34 percent, with points decreasing to 0.74 from 0.78 (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 7.29 percent from 7.16 percent, with points increasing to 1.01 from 0.96 (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 6.86 percent from 6.73 percent, with points decreasing to 1.14 from 1.17 (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 6.49 percent from 6.47 percent, with points decreasing to 1.21 from 1.58 (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.

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
Email  ann@appraisaltoday.comwww.appraisaltoday.com

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