Newz: Top 3 Appraiser Mistakes, Bias Lawsuit Dismissed, ADUs
July 25, 2025
What’s in This Newsletter (In Order, Scroll Down)
- LIA ad: Why Do Claims Get Settled?
- Top 3 Mistakes Appraisers Make in Their Appraisal Reports By Bryan Reynolds
- Founding Father John Hancock’s Boston Home Is on the Market for First Time in Half a Century — More Than 250 Years After It Was Built
- Appraiser Vindicated: Lanham Discrimination Lawsuit Dismissed in Maryland
- A Complete Guide to Geocodes
- Bipartisan legislation would make it easier to finance accessory dwelling units
- Mortgage applications increased 0.8 percent from one week earlier
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Top 3 Mistakes Appraisers Make in Their Appraisal Reports
By Bryan Reynolds
Excerpts: After doing more than 2,000 appraisal reviews over the years, Bryan and his team have seen these same errors crop up again and again. Know them and avoid them.
I was an investigator for the state of Tennessee for many years. These days, I primarily help appraisers who find themselves in trouble. Sometimes we’re successful in resolving the issue entirely, or at least reducing the impact. Other times, it becomes a learning moment — we recognize mistakes, take responsibility, and strive to do better.
Mistake #1: Omitting a key statement about an extraordinary assumption or hypothetical condition
Appraisers can gain some leeway with the right scope of work, and by properly using extraordinary assumptions and hypothetical conditions. But you must meet minimum reporting requirements.
Mistake #2: Not summarizing the results of your analysis of the subject property’s prior sales
Saying “the subject sold last year for $150,000” is not analysis. That’s just a statement of fact. What USPAP requires is a summary of your analysis. You’ve got to explain what that sale means in the context of your current appraisal, not just list the data point.
Mistake #3: Including comps that aren’t really comparable
The 1004 form, or the Uniform Residential Appraisal Report form, is what most appraisers use. This is a form many of you are very familiar with. At the top of page two, it says:
“There are ___ comparable properties currently offered for sale in the subject’s neighborhood, ranging from ___ to ___.”
“There are ___ comparable sales in the subject’s neighborhood within the past 12 months, ranging from ___ to ___.”
Now, if you truly are in an area where all the listings and sales in a neighborhood are in a competitive state for the same properties, then I guess you’d fill that in accordingly. But how often does that happen? I mean, are the two-bedroom homes competing for the same buyers as the four-bedroom homes?
To read more, Click Here
My comments: Definitely worth reading! I would have never thought these 3 were the most common mistakes.
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Founding Father John Hancock’s Boston Home Is on the Market for First Time in Half a Century — More Than 250 Years After It Was Built
Excerpts: Used as offices now, 7,622 sq.ft., 2,178 sq.ft. lot, Originally built in 1660s
The iconic dwelling, which is known as the Ebenezer Hancock House in honor of John’s younger brother who used it while serving as the deputy paymaster of the Continental Army, is thought to have been built in 1767.
According to the listing, which is held by Dave Killen of LandVest, the building is the “last extant property associated with the founding father in Boston” and stands as a living time capsule, having been meticulously maintained by its current owners over the last five decades.
An asking price for the property has not been released, but the structure was most recently valued at $1.65 million by city officials. Given its historical significance, the building could well sell for much more.
The original structure dates to the 1660’s, when the site was owned and occupied by William Courser, Boston’s first Town Crier. In 1737, the property was owned by James Davenport, the brother-in-law of Benjamin Franklin.
To read more and see many interesting photos, Click Here
My comments: Our country’s 250th anniversary is coming. This is a look into when we started.
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Appraiser Vindicated: Lanham Discrimination Lawsuit Dismissed in Maryland
by Isaac Peck, Publisher, WorkingRE
Excerpts: One of the most widely publicized and contested lawsuits alleging appraisal discrimination has finally come to an end.
On July 17, US District of Maryland judge Stephanie Gallagher issued summary judgement in the case of Connolly & Mott v. Shane Lanham, effectively dismissing Connolly and the late Mott’s claims that appraiser Shane Lanham discriminated against them by appraising their home for less than they hoped, while simultaneously dismissing Lanham’s counterclaim against the plaintiffs for defamation.
The result is an ending to a nearly three-year legal battle that started in August 2022. Shortly after filing their lawsuit against Lanham, both Connolly and Mott were quoted at length across mainstream media outlets—CBS News, The New York Times, NBC, CNN, ABC News, and more—describing how Lanham discriminated against them and undervalued their home because they are Black.
Lanham countersued shortly after and argued that they had defamed him, falsely labeled him a racist on national news, and were responsible for severe emotional and financial damage to his life and his business.
Each side has 30 days to file an appeal against Gallagher’s decision, so it remains to be seen if the case is truly over, but all signs are pointing to a final conclusion.
To read more, Click Here
My comments: Read the details. We don’t know the final results, but I am so glad this has moved along. Many appraisers are worried about being accused of bias, although bias lawsuits don’t not happen often.
Source: LIA “To date, there is no judgment of discrimination entered against an appraiser in civil court. Several appraisers were dismissed from discrimination cases and other discrimination cases were settled out of court for undisclosed amounts.”
“Allegations of discrimination are very difficult to prove. Instead, attorneys
focus on negligence; it is easier to prove that there are errors in the appraisal
report. There has been no HUD determination of discrimination based on their investigations on any of the matters reported to LIA.”
The August 2025 issue is my Annual E&O issue. Excerpts above is from that article, with an update on claims, lawsuits, etc. Plus advice on how to stay out of trouble and where to get E&O insurance. .
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Probability, Market Value, and the Appraiser’s Dilemma
In the July, 2025 issue
By Tim Andersen, MAI
This essay discusses the tension between the probabilistic demands of
market value definitions in real estate appraisal and the deterministic
methodologies currently used by appraisers.
Further, it highlights the need for greater transparency and the adoption of
probabilistic tools to improve credibility and align with modern appraisal
expectations.
In the field of real estate appraisal a deep tension exists between the formal
demands of appraisal standards and the methodological tools appraisers are
given.
Fannie Mae’s definition of market value explicitly refers to the “most
probable price” a property would command under fair conditions. Yet current
appraisal theory and practice provide no formal means of calculating probability.
This creates an ethical and methodological dilemma: how can an appraiser
form a credible opinion of the most probable price if the tools and protocols of appraisal are not equipped to handle probabilities at all?
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A Complete Guide to Geocodes
Excerpts: We live in a world of geocodes. Any website or app that requests your name and address will potentially convert that data into geocodes for use. Often, the data are used for analytics and marketing purposes but geocodes are also used by rideshare and food delivery apps, real estate companies and property investors, urban planners, insurance companies for risk mitigation, and countless other use cases.
Here’s a detailed look at geocodes and their place in today’s digital and business world.
Geocoding 101
How often does your name and address appear on a payment portal or a website? Why do your name and address conveniently appear on a site via autofill? Welcome to the world of geocodes. Practically every organization or business is interested in collecting your data and converting it into geocodes for analysis.
Geocodes are unique identifiers consisting of numerical or alphanumeric characters. They represent specific physical geographic locations using latitude and longitude coordinates. The codes are so useful because they can be used to detect patterns in data.
Who Uses Geocodes and How?
Real estate, urban planning, property development, insurers, home services, and government departments are examples of industries that rely on geocode data application, but as we showed in the introduction, practically all entities use geocode data in one way or another.
To read more, Click Here
My comments: The Past: looking for a house and trying to find using an address sign on the property or find a vacant lot. The Present: geocoded exact location. Lots more information in this article. Worth reading. I did not know much about geocoding before I read this article.
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Bipartisan legislation would make it easier to finance accessory dwelling units
The SUPPLY Act aims to establish government-backed funding for ADU construction
Excerpts: A bipartisan bill designed to address the national housing shortage by expanding financing access for accessory dwelling units (ADUs) was introduced July 18 by Rep. Sam Liccardo, D-Calif., and Rep. Andrew Garbarino, R-N.Y.
Known as the Supporting Upgraded Property Projects and Lending for Yards (SUPPLY) Act, the bill would direct the Department of Housing and Urban Development (HUD) to establish a program that would insure second liens against a home for the purpose of financing ADUs, also known as backyard cottages or in-law suites.
“Most ADUs today are financed through savings or home equity lines of credit by relatively affluent homeowners, because modest-income and younger homeowners cannot get second loans on their homes where they lack the equity,” a press release from Rep. Liccardo’s office stated. “The SUPPLY Act will provide government-backed, flexible financing options to help homeowners of modest means overcome what is often the last hurdle to breaking ground on an ADU.”
To read more, Click Here
My comments: ADUs have been around for a while now. But, requirements vary widely in different cities/states. ADUs are an excellent way to increase housing.
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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. We are all waiting for rates to drop in 2025.WASHINGTON, D.C. (July 23, 2025) —
Mortgage applications increased 0.8 percent from one week earlier
according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 18, 2025.
The Market Composite Index, a measure of mortgage loan application volume, increased 0.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 22 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 22 percent higher than the same week one year ago.
“The 30-year fixed mortgage rate edged higher last week to its highest level in four weeks at 6.84 percent, while rates for other loan types were mixed. Purchase applications finished the week higher, driven by conventional purchase loans, and continue to run ahead of last year’s pace,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “After reaching $460,000 in March 2025, the purchase loan amount has fallen to its lowest level since January 2025 to $426,700. With the 30-year fixed rate still too high to benefit many borrowers, refinance applications were down almost three percent for the week.”
The refinance share of mortgage activity decreased to 39.6 percent of total applications from 41.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.2 percent of total applications.
The FHA share of total applications decreased to 18.7 percent from 19.0 percent the week prior. The VA share of total applications remained unchanged at 12.6 percent from the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.84 percent from 6.82 percent, with points remaining unchanged at 0.62 (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 $806,500) remained unchanged at 6.75 percent, with points increasing to 0.70 from 0.66 (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 remained unchanged at 6.52 percent, with points decreasing to 0.79 from 0.86 (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 6.14 percent from 6.16 percent, with points increasing to 0.69 from 0.63 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.
The average contract interest rate for 5/1 ARMs decreased to 6.01 percent from 6.08 percent, with points decreasing to 0.28 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The survey covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels. The survey has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, thrifts, and credit unions. Base period and value for all indexes is March 16, 1990=100.
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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.com
Online: www.appraisaltoday.com
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