Arms Length Sales for Appraisers

Newz: Arm’s Length, AMC Panel Requirements, Fed’s Influence on Mortgages

January 16, 2026

What’s in This Newsletter (In Order, Scroll Down)

LIA AD: AMC Panel Requirements
What Does Arm’s Length Mean in Real Estate?
$329K California Cabin Has a Tree Growing Through Its Center: ‘Commune With Nature in a Whole New Way’
How does the Federal Reserve affect mortgages?
MY AD: What is new in the New URAR/UAD 3.6 SF-1 Scenario
Critical Thinking Skills Needed by Appraisers By Vernon Martin
Waste, Fraud & Abuse Flourished Under Former Secretary Fudge
MBA: Mortgage applications increased 28.5 percent from one week earlier

Non-Arms Length Sales for Appraisers

Humor for Appraisers

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What Does Arm’s Length Mean in Real Estate?

Excerpts: As a real estate appraiser, understanding whether a transaction is an arm’s length sale or a non-arm’s length sale is crucial. Therefore, when evaluating the current terms of a sale or analyzing past sales of the subject property or comparables, it’s essential to consider the nature of the sale to ensure a credible appraisal.

A non-arm’s length sale is a transaction between parties who have a personal or professional connection, such as family, marriage, or work relationships. Due to their relationship, the parties might not act in their own best interests, which can result in a final sale price that does not reflect the property’s true market value.

Non-arm’s length transactions extend beyond the relationship between the buyer and seller; additional conditions must be considered to determine whether a transaction qualifies as an arm’s length transaction.

Example of a non-arm’s length transaction: An employer sells a property to an employee and agrees to pay 80% of the down payment for a mortgage loan, all the closing costs, the transfer tax, and any and all repairs up to $50,000 in the first 5 years of home ownership.

Example of a non-arm’s length transaction: An elderly couple sells their property to their next-door neighbor without fully understanding its market value, relying solely on the neighbor’s offer.

To read more and watch a 5 minute video, Click Here

My comments: Worth reading for all appraisers. I have never read a more comprehensive and understandable explanation of this very important topic.

When I have a sale that does not “look right” I always find out why it is high or low or has some other issue on “arms length”. If I can’t find out, I don’t use the sale.

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$329K California Cabin Has a Tree Growing Through Its Center: ‘Commune With Nature in a Whole New Way

Excerpts: 2 bedroom, 1 bath, 576 sq.ft. 3,851 sq.ft. lot, built in 1949

Any homes are hailed for blurring the line between the inside and out, but one intriguing California dwelling takes that concept to new heights—by merging, quite literally, with its surroundings.

The property in Lake Arrowhead, CA, is not only immersed in the trees, it also has one growing right through its center, stretching up out of the roof, where its leafy branches create a stunning canopy over the dwelling.

There is “a very large fir tree growing through the middle of the bedroom,” Weaver reveals. “It’s a very healthy tree. In fact, these owners had two different arborists come out and look at it and make sure it was fine and healthy and everything.”

“What I imagine, and what it looks like structurally underneath it all, is that it was a deck and a little bitty cabin, a loft-bedroom-only cabin, and it had a deck with a tree through it,” she explains. “You see decks with trees through them all over the place up here.”

At some point, Weaver suspects an owner closed the deck in and created a bedroom around the fir tree.

When this was done, steps were taken to ensure that the tree could still move in the breeze without impacting the structural integrity of the home—or causing the property to shake.

To read more, Click Here

To read the listing with 31 photos and an aerial view, Click Here

My comments: Fascinating home!! I have always liked homes with trees growing inside… A friend of mine had plants, mostly vines, that came in through slightly open windows. I had never seen that before. Very interesting.

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How does the Federal Reserve affect mortgages?

Excerpts: The Federal Reserve doesn’t set mortgage rates outright, but its decisions do play a role in the percentages lenders offer would-be homeowners. And even if the Fed keeps its benchmark rate unchanged, mortgage rates can still fluctuate.

Here’s how the Fed’s monetary policy affects mortgages

For example, in 2022 and 2023, the Fed increased this key interest rate to help calm inflation, hikes that made it more costly for Americans to borrow money or take out credit. However, sometimes mortgage rates seem to ignore the Fed. While the Fed cut the rate three times at the end of 2024, mortgage rates remained relatively high, and even increased.

That’s because fixed-rate mortgages — the most popular type of home loan — don’t mirror the federal funds rate; they track the 10-year Treasury yield. When that goes up or down, fixed-rate mortgage rates do, too.

To read more, Click Here

My comments: I have known about this for a long time. But, not all appraisers understand. This is a hot topic now as the current President has wanted Fed rates cut for awhile and has been pressuring the Fed to lower rates. Other presidents have wanted lower rates also.

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Click hereWhat is new in the New URAR/UAD 3.6 SF-1 SCENARIO

In the June 2025 Appraisal Today newsletter

INFORMATION AND MY COMMENTS ON EVERY PAGE

Excerpts:

PAGE 1

Appraiser and AMC Fee – not in the sample report
In certain jurisdictions, the appraiser is required by law to disclose the fee charged by the appraiser and the Appraisal Management Company (AMC) if applicable. If not populated, this information does not display.
Property address. Top of page. Use F-1 and search for property address if it is not a standard USPS address, more than one address, etc.
Assignment Reason – Search F-1 to see the full list of lender reasons

PAGE 2

Property Valuation Method.
Traditional Appraisa1
Hybrid Appraisal
Desktop Appraisal
Exterior Appraisal
Current owner of public record. Note: The current owner can be a person or a legal entity.

Property Description – Construction Method

Container
Manufactured
Modular
On-Frame Modular
Site Built
3D Technology
Other (Describe)
If there are multiple dwellings, or multiple Construction Methods for a dwelling, all display here.

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Critical Thinking Skills Needed by Appraisers

By Vernon Martin

Excerpts: In the English-speaking world, valuers are trained using “business school” methods. Instructions in problem-solving start with set, unchallenged assumptions, and the question is not asked, “What if the information and assumptions are wrong?” or “What if the property owner is lying?” There is an intermediate step which is being neglected, the step that consists of verification, exemplified by such questions as “How do we know that the building measures 25,000 square feet?” Did we measure it? Did a government entity measure it? Did we get the number off the rent roll? (Rentable areas on rent rolls are often inflated by landlords.) Or were we just “informed” by the owner? Remember that Google Earth can also be used in aerial view and ground view to take measurements, too. But let us take “critical thinking” to an even higher level. Shouldn’t we as appraisers and valuers also question valuation techniques that may be improperly taught and used? Some appraisers refuse to use comparable sales that are foreclosures or in foreclosure, even if the appraised property is also in foreclosure. Someone has taught them to do this. This can result in overvaluation. Critical thinking can sometimes fly in the face of professional orthodoxy, which may not always hold up to logic. There has been a status quo maintained by professional “Grand Poobahs” whose power is dependent upon a lack of change. To read more, Click Here

My comments: Interesting comments on this topic from different perspectives. The author has extensive experience appraising in the U.S. and other countries.-

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Abuse Flourished Under Former Secretary Fudge

Appraisers harassed by HUD under Fudge know far more waste, fraud, and abuse is still buried.

By Jeremy Bagott

Excerpts: A report by the U.S. Department of Housing and Urban Development found that more than $5 billion in taxpayer funds were paid to unknown parties during former HUD Secretary Marcia Fudge’s final year atop the agency. The payments reportedly included aid to roughly 30,000 deceased individuals and thousands of ineligible recipients. In fiscal year 2024, according to the report:

$77 million was paid to deceased tenants
$150 million went to recipients with non-existent Social Security Numbers
$288 million went to pay excessively high rents
$5.2 billion went to recipients with inactive accounts

According to an Inspector General’s report last year, HUD couldn’t account for spending at its two largest programs. It was the seventh straight year officials couldn’t estimate the scope of incorrect payouts at internal divisions that account for two-thirds of the department’s total annual expenditures. We’re only now starting to see the sheer scope of the waste, fraud and abuse.To read more, Click Here

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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 lower in 2026.

Mortgage applications increased 28.5 percent from one week earlier

WASHINGTON, D.C. (January 14, 2026) — Mortgage applications increased 28.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 9, 2026. Last week’s results included an adjustment for the New Year’s Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 28.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 65 percent compared with the previous week.

The Refinance Index increased 40 percent from the previous week and was 128 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 16 percent from one week earlier. The unadjusted Purchase Index increased 51 percent compared with the previous week and was 13 percent higher than the same week one year ago.

“Mortgage rates dropped lower last week following the announcement of increased MBS purchases by the GSEs. Lower rates, including the 30-year fixed rate declining to 6.18 percent, sparked an increase in refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Compared to a holiday adjusted week, refinance applications surged 40 percent to the strongest weekly pace since October 2025. The average loan size for refinance applications was also higher, as borrowers with larger loan sizes are typically more sensitive to changes in rates.” Added Kan, “Purchase applications also jumped last week and were 13 percent ahead of last year’s pace, as lower rates and higher inventory kept potential homebuyers active in the market.”

The refinance share of mortgage activity increased to 60.2 percent of total applications from 56.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 7.0 percent of total applications.

The FHA share of total applications decreased to 19.2 percent from 20.0 percent the week prior. The VA share of total applications decreased to 16.1 percent from 17.3 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 ($832,750 or less) decreased to 6.18 percent from 6.25 percent, with points decreasing to 0.56 from 0.57 (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 $832,750) increased to 6.42 percent from 6.32 percent, with points increasing to 0.43 from 0.42 (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 decreased to 6.08 percent from 6.09 percent, with points decreasing to 0.68 from 0.77 (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 5.60 percent from 5.64 percent, with points decreasing to 0.61 from 0.64 (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 5.42 percent from 5.90 percent, with points increasing to 0.49 from 0.19 (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 Today1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone: 510-865-8041

Email: ann@appraisaltoday.com

Online: www.appraisaltoday.com

By Ann O'Rourke on January 16, 2026 / Uncategorized / Leave a comment