Dos and Don’ts of Selecting Appraisal Comps

Excerpts: Follow these dos and don’ts to help ensure that relevant comparable sales are established:

Here are a few topics

  • Do welcome relevant comparable sales from real estate agents
  • Don’t limit the number of comparable sales to three
  • Do consider objective characteristics when selecting competing neighborhoods

Don’t use appraisal comps based on price

As an appraiser, you must provide an unbiased opinion of value. Selecting comparable properties based on price may inadvertently favor properties within a predetermined price range, rather than those genuinely similar to the subject property in terms of location, size, condition, and other relevant characteristics. To maintain objectivity and credibility, you should evaluate sales based on criteria that most accurately reflect comparability, rather than focusing on price.

Do focus on characteristics of the property

Identify properties with comparable square footage (including finished basements), number of bedrooms and bathrooms, lot size, view (e.g., waterfront), and amenities. Prioritize features that are highly sought-after in the property type and market. For instance, in the subject’s market, a mountain view could significantly impact the demand and marketability of a vacation condominium home.

To read more, Click Here

My comments: Worth reading. Good analysis of factors in comp selection.

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 Fannie March Update, Bias and not using time adjustments, Climate change effects on risk and values, answer your phone if you want more appraisal business,  unusual homes, mortgage origination stats, etc.


Georgian Country Mansion in Greenwich, CT Listed at $33.8M

Excerpts: 10 bedrooms, 14.5+ baths, 17,878 sq.ft., 19.14 acre lot, built in 2009

This elegant, Georgian mansion is said to be owned by a former executive with ties to the Grey Goose vodka fortune.

The 24-room residence was custom built in 2009 and is loaded with exquisite finishes. It’s been on and off the market since 2022, with a top asking price of $33.8 million. Lavish details include an indoor hockey rink; indoor and outdoor pools; and a 30-car, underground auto showroom.

A substantial amount of mature trees balance wide open park like spaces with lawns to the front and rear of the main home.

Classically designed to show a high degree of architectural integrity and balance. The Grand entry foyer with double staircase set the tone for the living spaces within. Large informal and formal spaces blend for an ideal venue for large scale entertaining, both inside and out. 3 car garage off the mudroom along with 3 car port cochere for day to day parking,

with further parking for over 30 cars.

High ceilings on the finished third floor that include gym / play space with full bath. Separate pool house with 2 ensuite bedrooms, changing area, and entertaining space. Multiple pools / spa perfect for all ages.

This listing had a few environmental risk factors: high winds, heat and decreasing air quality.

To read the listing and see 39 photos, Click Here


Fannie Appraiser Update March 2024

Excerpts: This edition touches on hot topics including zoning changes, hybrid appraisals, subjective language, and recent Selling Guide updates. And some tips on how to keep your appraisal credentials safe.


  • Progress Report Regarding Prohibited or Subjective Appraisal Language – update on use of “crime” Rezoning & HBU – zoning changed to increase density
  • Age of Comparable Sales – While Fannie Mae does not currently have an explicit policy for how to calculate the age, the general principle in regard to comparables is to describe them as of the date they went under contract.
  • Updated Unacceptable Appraisal Practices (bias words) – the overall occurrence rate which has declined from 0.15% of appraisal reports in 2021 to just 0.03% in 2023 (see Figure 1). These statistics highlight the remarkable progress appraisers have made in becoming more objective in their thinking and writing, and in eliminating consideration of protected class.
  • Cybersecurity Tips – The fraud event listed in the January Fraud Alert was uncovered when one of the two appraisers whose
  • credentials had been forged, was contacted about an appraisal they had not performed. What you need to do to protect your license.

To read more, Click Here

My comments: Short. Worth reading.


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Want more appraisal business? Answer your phone!

Have a voicemail message that Does Not Say:

  • Only your phone number
  • This is Joe.
  • This is Jane Thompson.
  • No voicemail message was set up.
  • Does not say it is an appraiser’s phone number.

I regularly call appraisers and hear these types of voicemail messages.

If you have an office and cell phone, always forward your office phone to your cell phone when not in the office if you want to get appraisals.

If someone is looking for an appraiser and you don’t answer, they often go on to the next appraiser on their list.

What should your voicemail message say?

This is Ann O’Rourke & Associates, real estate appraisers. Thanks for calling. Please leave a message and we will return your call as soon as possible.

Look online for many other ideas. Practice recording it a few times before using it. Most of us forget about changing it later.

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“Bias” White Paper for FHMLC and FNMA – Proposed Solution to Not Making Time Adjustments

By Craig Gilbert, ASA, SRA, CRP

The Solution

The “Time Adjustment” field for Comparable Sales in the

Residential Appraisal Report Forms must be immediately changed from an optional field to a Required UAD field that only allows a “Money Field” only.

Author’s comments (National Appraisers Forum)

I shared my White Paper in late February with FNMA & FHLMC Chief Appraisers/Collateral Managers, along with FHFA, ASC, AEI, NAR, OREP, Atty Peter Christianson Dr. Andre Perry, Jillian White and some appraisers. For some unknown reason, this data analysis has been overlooked and swept under the rug for too long by GSEs.

I only received one negative response, from an independent fee appraiser. All others gave favorable responses that this is indeed needed.

Professional residential appraisers who are already doing this will appreciate too that the competition, who are focused on fast and cheap, will have to comply, once instituted. They won’t be able to simply ignore the adjustment field and leave it blank.

I have no idea why the GSEs didn’t implement this in the past 14 years. There’s no rationale or logic for this not being done years ago as a required adjustment, starting in 2010.

GSEs have been telling appraisers to do this for decades. I recall Norm Bolas at FNMA telling us this in the 70’s-80’s, when one couldn’t afford to lose their FNMA Number.

The GSEs will either need to decide on their own to do this, or, will quite likely receive instructions from their Conservator FHFA to do so. FHFA put the hammer down on GSEs and Fee Appraisers with their two recent blog posts by FHFA Economist Scott Rosin, who is also in possession of this White Paper.

Implementation should remove one of the most recent complaints resulting in appraiser bias. This would be a win-win for all parties, except for the fast & cheap appraisers who have never done this one step in their entire career, as hard as this is to believe.

This can easily be implemented in 30-60 days. It’s pretty simple coding, according to an appraisal software engineer who I spoke to. Hopefully, the GSEs don’t drag their feet too long on this wondering if they should do this or not. Do the right thing. Just one field needs to be re-coded. That’s it. Simple. For those who don’t know, I’ve been involved in appraisal form development, from scratch.

To read the report, Click Here

NOTE: most of the links in the PDF are not “live”, so copy and paste the link text into your browser.

Author contact info:

Craig@CraigGilbert.Net email

www.CraigGilbert.Net web site

My comments: The report is 14 pages long, understandable, and well-written. It is worth reading. It provides a detailed analysis of why time adjustments are necessary and quotes from relevant documents.

FNMA sent a memo to appraisers in about 1981 telling them to stop making time adjustments. However, the market was declining then, and negative adjustments were needed. Rates were accelerating fast at that time, towards 18%+.

When I started my appraisal business in January 1986, all the local, knowledgeable appraisers said never to make time adjustments. The lenders don’t like them. I had worked at the assessor’s office in the late 1970s, when we were making 2% per month positive time adjustments. I only worked for lenders that allowed them. I could not lie in my appraisals about what was happening.

Of course, now Fannie’s computers check time adjustments to be sure they are done when necessary.


Climate Risks Threaten Nearly Half of All Homes in the U.S. How does it affect values?

Excerpts: Nearly half of all homes in the U.S., 44.8%, are at risk of severe or extreme damage from environmental threats, according to a new report from the® economics team. Almost $22 trillion in residential real estate is in danger of flooding, wind damage, wildfires, heat, or hazardous air quality.

Earlier this month, firefighters in Texas were battling the largest wildfire in the state’s history. At least two people died in the Smokehouse Creek Fire, more than 500 structures had been destroyed, and over 1 million acres had been scorched as of March 2, according to CNN.

“Climate risk is a big deal,” says economist Jiayi Xu. “It can impact home values, insurance costs, and the overall stability of a housing market.”

“The issues are whether you can get access to affordable insurance and how much the costs will increase,” says Xu.

To read more, Click Here

NAR uses First Street for risk ratings. To find out what it says about a home’s risk (free), Click Here

My comments: Is there any effect on home values? Is there anywhere that is totally safe? Environmental/Climate risks are in the news, and people will worry more about their risks.

These risk ratings are on all the newer NAR listings. The risk from wildfire smoke, coming from nearby and distant areas, is significant for my home. In our last California wildfires, smoke drifted east into many distant areas.

Across the street from my office, an old marina property is being developed into housing. They had to raise most of the area 2 feet because of projected flood risk as the Bay waters rise due to increased ocean temperatures. Some other areas in my city are also subject to this risk. This definitely increased the development costs in the new construction, resulting in higher home prices.

One of my brothers lived in Lake County for 30 years, two hours north of San Francisco, where there were regular wildfires. The most recent one destroyed many homes and businesses. His difficulties in getting fire insurance kept getting worse and worse. Today, it is almost impossible to get fire insurance except through a State plan, which is very limited in coverage.


Is There a Fortress in Your Future?

7 Homes That Will Stand Up To Mother Nature’s Fiercest Weather

Excerpts: he planet is getting hotter and our corresponding weather more intense—and these climate challenges could determine the type of home you’re considering.

This is especially true in coastal regions where flooding is a big concern, or in the heartland, where tornadoes, massive snow dumps, and extreme temperatures can conspire to test a home’s bones.

The fix here just might be a fortress-style home. According to Tony Mariotti, a real estate agent and founder of RubyHome in Los Angeles, there currently isn’t much incentive for builders to construct the types of fortifications in the listings below.

“We’re not there yet with new builds and climate change amenities—it may require specific regulations to make it happen,” he explains.

Still, if you’re curious about a fortress, we’ve pored through listings nationwide to find seven homes that fit the bill. Read on to discover the incredibly strong, weather-resistant builds in each spot and some advice for your own superstrong home.

To read more, 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. Many appraisers are not busy. Some are busy, usually with non-lender appraisals.

Mortgage applications decreased 1.6 percent from one week earlier

WASHINGTON, D.C. (March 20, 2024) — Mortgage applications decreased 1.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 15, 2024.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 3 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 14 percent lower than the same week one year ago.

“Mortgage rates increased last week as incoming data showed inflation was still hotter than expected, which stoked concerns about the timing and extent to which the Fed might be able to reduce the fed funds rates this year. After three weeks of declines, the 30-year fixed mortgage rate increased to 6.97 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Mortgage applications continued to show sensitivity to rate movements, and both purchase and refinance activity decreased over the week. With housing supply low and prices high, the average loan size for purchase applications increased to the highest level since May 2022.”

The refinance share of mortgage activity decreased to 31.2 percent of total applications from 31.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.2 percent of total applications.

The FHA share of total applications increased to 12.1 percent from 12.0 percent the week prior. The VA share of total applications decreased to 12.1 percent from 12.2 percent the week prior. The USDA share of total applications remained unchanged from 0.5 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.97 percent from 6.84 percent, with points decreasing to 0.64 from 0.65 (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 $766,550) increased to 7.14 percent from 7.04 percent, with points increasing to 0.54 from 0.38 (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 6.89 percent from 6.77 percent, with points increasing to 1.04 from 0.95 (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 6.49 percent from 6.37 percent, with points decreasing to 0.70 from 0.77 (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 6.33 percent from 6.38 percent, with points increasing to 0.55 from 0.52 (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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