How does the FHA define appliances?

By Daniel A. Bradley, SRA, CDEI

In September of 2015, FHA revised Handbook 4000.1 to provide a specific definition, which includes:




Garbage disposals


Washers and dryers

It’s important to note this does not include garage door openers, swimming pool pumps, intercoms, sound systems, and security systems.

How do appraisers consider appliances?

FHA Handbook 4000.1 also clarifies when appliances are required to be operational by stating, “Appliances that are to remain and that contribute to the market value opinion must be operational,” and, “The Appraiser must note all appliances that remain and contribute to the Market Value.”

FHA requirements for appliances: Is a house required to have a stove?

To read more, Click Here

My comments: Worth reading if you do FHA appraisals. Short and understandable. I did FHA appraisals for a few years in the mid-80s. Too many requirements so I quit doing them, but they helped me get started in my appraisal business.


Appraisers Riding the Waves of Up and Down Mortgage Rates

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 E&O and state boards, bias, 32% sales are new homes, unusual homes, mortgage origination stats, etc.


5-Story Mountain Lodge in Georgia for $1,475,000

Excerpts: 4 bedrooms, 3 baths, 3,300 sq.ft., 1.5 Acre lot, built in 2023 as a spec home.

This home’s special features are the panoramic vistas. The 3,300-square-foot cabin has covered decks on each of the five stories.

“Every level has a little bit better of a view, although you can see the view from every single level and from every single room in the house,” the listing agent says.

The home’s lowest level is the party deck, a flexible outdoor space below the basement.

“It has an outdoor kitchen with a pizza oven and a rotisserie grill, a sink, [and] a refrigerator,” Payne explains, adding that the space also boasts “unique lighting”—a mountain-shaped conversation piece that changes colors. “It’s kind of fun when you have people over. It catches everyone’s attention.”

Visitors should be prepared for an off-road, rustic experience.

“The roads are dirt roads and are a little bit more difficult to get through,” Payne notes. “But it kind of adds to the character. You really feel like you’re in the mountains.”

To read more and see interior photos, Click Here

To see the virtual tour and 38 photos in the listing, Click Here

My comments: It looked good until I read dirt roads! When I appraised at a northern California assessor’s office starting in 1975, I worked a lot in mountain areas with dirt roads not maintained well and sometimes many homes using a road. I finally purchased a cheap car just for working there.

One of my brothers lived on a very hilly dirt road off a main dirt road about a 2-hour drive north of San Francisco. I gave up visiting him in the winter. He used his small bulldozer to level the roads periodically. No more dirt roads for me!


An Inside Look at E&O

By Peter Christensen

Excerpts: There is no law requiring that real estate appraisers must have professional liability insurance – or E&O insurance as it is often called – except in one state. That state is Colorado, which requires that licensed or certified appraisers carry E&O in a minimum amount of $100,000 per claim.

Whatever the reason for having E&O, when a state disciplinary matter occurs, appraisers worry about the impact it may have on their insurance. Common fears are that their insurer will increase their premium or decline to renew their policy. These fears do have a rational basis.

“Should I report the filing of a complaint against me with the state to my E&O insurance provider?”

This question arises because of the fear that reporting the complaint will result in non-renewal or a higher premium. That fear is understandable. But the safest and best course for an appraiser is always to report the filing of a complaint to the E&O carrier promptly after receiving the first notice of the complaint. There are two big reasons for this.

To read more, Click Here

My comments: These are questions many appraisers have (and worry about). Peter Christensen is an attorney and a member of the California, Washington, and Montana state bars. His law practice is dedicated to valuation issues. He worked for Liability Insurance Administrators E&O for many years.


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Appraising – From the Middle Ages to Now

By G. Michael Yovino-Young, MAI, SRA, ASA, FRICS

1523 – the First Valuation Book

In the European context, we have to look to England for the earliest

recorded recognition that there was an “appraisal profession”. In 16th century England, 1523 in fact, a text entitled “Book of Husbandry and Book of Surveying” was published by a Mr. Fitzherbert. Surveying during this period was a term used to describe both the measurement of land itself and the measurement of its value, most commonly rental value since most property either belonged to the crown or to the church at the time.

Mid 1700’s – Right of Way and Eminent Domain

Private property ownership increased dramatically after the mid-1500s, and

by the mid-1700s laws were created that dealt with compensation for land

acquired, severance, and damages to the remainders.

The tremendous growth in the creation of infrastructure for the expansion of

major cities, water systems, canals for transportation of goods, road and street systems, inevitably required acquisition of private property.

Compensation was determined by arbitration bodies who based their

awards on the estimated annual value or rent multiplied by some number of years, a form of valuing the present worth of future monetary benefits. According to one source, 20-25 years was typical for this calculation.

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Damned If You Do and Damned If You Don’t

By Robert “Bob” Mossuto Jr.

Damned if you do, damned if you don’t has become the new normal in the real estate appraisal profession.

The government and those that write the rules have made it illegal (a punishable violation) to refuse an appraisal assignment in an area which consists primarily of non-whites.

The government and those that write the rules also state the purpose of an appraisal is to determine the value of the home/property in its market setting, so an underwriter can make a lending decision. Back in the day, this protected the lender from lending more than the home/property is worth. It also protected the borrower from paying more than the home/property is worth.

So, appraisers, as long as you remain in the profession, regardless of whether you’re appraising for lenders or doing non-lender work, the government and those that write the rules have planted the seed. In today’s world, every time you walk out the door for an assignment, you risk the excruciating pain of being called a racist and being turned in to HUD, VA, or whomever.

To read more, including 28 comments, Click Here

My comments: In 1986, I started working in the city of Oakland, California, across the Oakland Estuary from my city, Alameda, an 800-foot wide channel separating Oakland and Alameda. In certain neighborhoods (primarily black and Hispanic at that time), I was warned by other appraisers not to stop at a local corner store to get a soft drink or anything else because they were “drug stores”.

I drove a mini-van with lots of papers and folders in the car. I looked like a real estate agent. A few times, someone offered to sell me drugs, but I politely declined. I never felt threatened. Sometimes it was tricky to take a comp photo with lots of young guys standing outside a “drug house” waiting for customers.

A few years after that, my scariest time was when I saw 3 police cars driving very fast behind me, going through stop signals and chasing someone. I drove up on a neighbor’s lawn to get out of the way.

Over the years, drive-by shootings increased. I was not too worried when they used single-shot pistols. I doubt if any of them practiced at a local gun range. When they started using machine pistols and rifles to spray multiple rounds, I finally quit appraising there, about 15 years ago. The bullets could go through the walls of homes, killing innocent people inside, including children.

I did not feel safe. Risking my life to complete an appraisal was not an option for me.

About 15 years after starting doing appraisals there, I was selected for a local criminal jury trial. When the defendant, a young black man, walked in, I immediately thought he was guilty. I sent a note to the judge saying I could not serve on the jury. I had to explain it in open court, a very embarrassing and horrible experience. I still think about the situation and wonder if any other jury members feel this way, but they don’t say anything in court and stay on the jury.

My parents raised us to not be biased about anyone. I was not aware of my bias. Now, I always smile and never go to the other side of the street when encountering anyone now.

I am so glad I quit doing residential lender appraisals in 2005!


32% of Homes for Sale in the Fourth Quarter Were Newly Built — Just Shy of the Record High

Redfin reports new construction has taken up a growing share of the for-sale housing pie because homebuilding has increased and the number of individual homeowners selling has decreased.

Nationwide, 31.8% of U.S. single-family homes for sale in the fourth quarter were new construction. That’s comparable with 31.9% a year earlier, which is the highest level of any fourth quarter on record. The highest share of any quarter on record is 34.5% in the first quarter of 2022.

Newly built homes are taking up a growing share of the for-sale housing pie for two primary reasons:

Homebuilding has increased. Homebuilding has been on an upward trajectory since 2009 as builders have slowly climbed their way out of the hole caused by the Great Recession. Construction also jumped during the pandemic as builders responded to surging homebuyer demand fueled by record-low mortgage rates.

The number of homeowners putting their houses on the market has decreased over the last year and a half.

Homebuilders have been offering sizable concessions, including money for mortgage rate buydowns, to attract bidders and offload inventory. That has made it hard for some individual sellers of existing homes to compete for buyers.

To read more, Click Here

My comments: What are new home sales like in your area?


Rare Pair of Rock Homes in Palm Springs for Less Than $750K each

Excerpts: Two rustic homes for sale in Palm Springs, CA, were designed by an overlooked maestro of 1920s organic architecture.

2550 S. Araby ($749,000) 2 bedroom, 3 bath, 1,311 sq.ft., 0.45 Acre lot, built 1929

2551 S. Araby ($699,000) 2 bedroom, 1 bath, 952 sq.ft., 3.33 Acre lot, built in 1930

Both have had recent $50,000 price reductions.

Miller built the four homes on 20 acres of hillside that he owned—inspired in part by Hopi and Navajo homes—and lived in one of the homes for many years himself.

Set on a hill above a desert filled with midcentury modern homes, this duo of dwellings is part of the Hopi Village group of rock residences built by R. Lee Miller. There are four of these homes.

Miller is a bit elusive, like the homes themselves. Born in 1887 in Texas, he served in World War I and trained in civil engineering and carpentry. He built several classic homes in Palm Springs, but these homes were their own mysterious project.

Despite the homes’ historic status and several price cuts, both have been on the market since 2022.

“Both properties have been owned by the same gentleman for 45 years, David Levy,” says Patzner. “He was an architect himself. He passed away, and his family has inherited these homes.”

To read more, Click Here

2550 S. Araby listing ($749,000) 2 bedroom, 3 bath, 1,311 sq.ft., 0.45 Acre lot, built 1929

To see the listing with 31 photos, Click Here.

2551 S. Araby listing ($699,000) 2 bedroom, 1 bath, 952 sq.ft., 3.33 Acre lot, built in 1930

To see the listing with 30 photos, Click Here

My comment: Check out the interior photos of the rocks. I have seen very few homes built with rocks other very unusual types of construction.


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.


Mortgage applications increased 3.7 percent from one week earlier

WASHINGTON, D.C. (February 7, 2024) — 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 February 2, 2024.

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 8 percent compared with the previous week. The Refinance Index increased 12 percent from the previous week and was 1 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index increased 6 percent compared with the previous week and was 19 percent lower than the same week one year ago.

“Mortgage rates have stayed close to where they started the year, despite swings in Treasury yields because of slowing inflation offset by stronger than expected readings on the job market. The 30-year fixed mortgage rate was 6.8 percent, a slight increase from last week,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Rates at these levels have not prompted much of a reaction in the refinance market, as most homeowners have mortgages with much lower rates. Purchase activity has been strong to start 2024 compared to the final quarter of 2023. However, activity is still weaker than a year ago because of low housing supply.”

The refinance share of mortgage activity increased to 35.4 percent of total applications from 34.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.4 percent of total applications.

The FHA share of total applications decreased to 13.1 percent from 13.8 percent the week prior. The VA share of total applications increased to 14.1 percent from 13.3 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.80 percent from 6.78 percent, with points decreasing to 0.59 from 0.65 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $766,550) decreased to 6.88 percent from 6.94 percent, with points increasing to 0.47 from 0.45 (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 6.57 percent from 6.61 percent, with points increasing to 0.84 from 0.79 (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 increased to 6.41 percent from 6.34 percent, with points increasing to 0.71 from 0.53 (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 6.14 percent from 6.23 percent, with points decreasing to 0.48 from 0.59 (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 increased to 6.23 percent from 6.22 percent, with points increasing to 0.59 from 0.49 (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



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