What is an Appraiser? Humor, Upzoning,
New UAD Quality Ratings
August 15, 2025
What’s in This Newsletter (In Order, Scroll Down
- LIA AD: A Family feued and Intended Use
- Upzoning: What It Is and What Appraisers Need to Know
- Off-Grid ‘Stilt Home’ That Hovers Above a St. Augustine Beach Hits the Market for $1.35 Million
- What Is An Appraiser? Humor
- The New UAD Quality Equation: Interior + Exterior = Overall Rating
- The Harbor Model: Where Appraisers Take the Helm
- Mortgage applications increased 3.1 percent from one week earlier,
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Upzoning: What It Is and What Appraisers Need to Know
Excerpts: Upzoning is a powerful but often misunderstood tool in urban planning and real estate. In this post, we’ll break down what upzoning is, why it’s becoming more prevalent, and what appraisers need to know about its potential impact on property values.
What Is Upzoning?
Upzoning is the process of modifying zoning laws to allow for higher-density development in areas that previously had stricter land-use regulations. This might include permitting multi-family housing where only single-family homes were allowed, increasing building height limits, or reducing minimum lot sizes. The goal is often to promote more efficient land use and address housing shortages.
What to Be Aware of as an Appraiser
It’s important for real estate appraisers to stay informed about changes in local zoning laws, as these can significantly affect property valuations. Upzoning, in particular, can alter what is legally permissible on a parcel of land, shifting development potential and land use expectations.
When upzoning occurs, the highest and best use of a property may change—from a single-family home to a multi-family development, for example—requiring appraisers to reassess the property’s value accordingly.
How to Address Upzoning in Your Appraisal Report
If you find that a property has been upzoned, how do you tackle that in your actual appraisal report? “I think the place to start is building permitting,” says Dobbs. “A lot of cities have pretty decent permitting websites. You can go in there and look at what types of permits are being pulled in the area.”
More topics:
- How to Address Upzoning in Your Appraisal Report
- Opportunities for Real Estate Appraisers
- How to Prepare for Future Upzoning
To read more, Click Here
My comments: Excellent, understandable article about this important topic. There are rental housing shortages in many areas in U.S. Today there is pressure to allow upzoning to make more rental housing available.
Residential appraisers did not receive much education on this topic. You don’t want to get into trouble with the state board by using the incorrect highest and best use on a property or not recognizing and reporting on upzoning.
I do commercial appraisals. HBU issues occur regularly in my city, so I keep up on zoning changes.
Don’t forget local regulations. In my city, regulations (not in zoning regs) restricts the number of rental units on a property (downzoning) after many Victorians were demolished and ugly modern apartment buildings constructed in the early 1960s. Appraisers only looking at zoning for HBU would make a very big mistake.
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Off-Grid ‘Stilt Home’ That Hovers Above a St. Augustine Beach Hits the Market for $1.35 Million
Excerpts 4 bedroom 3 baths,3,374 square feet, 0.41acre lot, built in 1980
Beachfront homes that offer instant access to white sand and a crystal-clear ocean are a rare find—but even rarer is a dwelling that sits directly atop that beachfront, mere feet away from the water.
Yet one such property has just washed ashore in St. Augustine, FL, listed for $1.35 million, 19 years after it last changed hands for less than a sixth of that price.
This unique dwelling is situated on large wooden stilts that have been hammered into the sand, providing the perfect perch overlooking the water, ensuring 24/7 beach access—a rare amenity that comes with its fair share of complications.
Unsurprisingly, given its location, the home is classified as being at “extreme” risk of flooding, according to the Realtor.com® Flood Factor rating, which notes that the dwelling has a “100% risk of flooding” over the next 30 years.
Additionally, the “stilt house” has an extreme wind factor rating, as well as an extreme risk of hotter-than-average temperatures.
To read more Click Here
To read the listing with 59 photos and a video tour, Click Here
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What Is An Appraiser? Humor
An appraiser is one who compiles and analyzes voluminous data of problematical accuracy from sources of dubious veracity and derives therefrom a numerical quantification of unquestionable necessity,
analogous to a nebulous and euphemistic concept representational of value commensurate with ambient configurations of the open market
and promulgates thereby a precise written declamation which delineates his observation, deliberations and conclusions all done while he feigns absolute ignorance of the avaricious machinations of Buyers, Sellers, Brokers and Lenders, compensated only by that penurious stipend known as the professional fee.
This joke is from Bill Sparks. Bill doesn’t know where this joke originated, but Thanks for sending it to us!
My comments: We all need a little appraiser humor!
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2025 E&O Insurance Update – Claims, Payment Options, Lawsuits, etc.
In the August 2025 issue of Appraisal Today
Discrimination claims
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. LIA does not publicize the outcome of specific insured’s discrimination matters to respect customers’ privacy and business concerns.
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. Several complaints were made to appraiser licensing authorities, alleging discrimination by the appraiser. There has been no finding of, or discipline imposed because of, discrimination by an appraiser.
Even where there is no finding of discrimination, there might still be USPAP
errors for which the appraiser might face discipline.
Advice on how to avoid problems
Borrower claims low value due to bias or discrimination. The appraiser
needs to have well documented work file to support comp choice, adjustments and value. Investigators will request other appraisals of properties in the same area looking for patterns. Work needs to be consistent.
During property visit, avoid conversation of a personal nature with
borrower/homeowner that could be misconstrued.
Carefully choose language to be used in report/neighborhood description,
etc.
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The New UAD Quality Equation: Interior + Exterior = Overall Rating
by Jo Traut
For many appraisers, the mention of new reporting requirements can trigger a collective groan. I’ve experienced this sentiment myself. The upcoming new URAR and UAD 3.6 changes to quality and condition ratings might initially appear to add complexity to our already detailed work. For those of us who have completed relocation appraisals, this level of detailed observation feels remarkably familiar. Relocation work has long required appraisers to document interior finishes, exterior materials, overall quality characteristics, and property condition. The new URAR framework essentially brings this level of thoroughness to mortgage lending appraisals.
The key change lies not in requiring us to observe new elements, but rather in how we document and reconcile our observations. With the new URAR, we’ll now evaluate interior and exterior quality and condition separately before reaching our final conclusions. This structured approach provides better support for our overall quality and condition rating. While the new URAR introduces important changes to both quality and condition ratings, this article will focus specifically on understanding the quality rating framework.
The 6 Distinct Levels of UAD Quality Assessments
The UAD quality rating system provides six distinct levels from Q1 to Q6, with specific criteria for interior and exterior components…
Exterior Quality: Just as with interior elements, exterior quality is rated based on specific components and materials, focusing on elements like fenestration, architectural details, roof design, and wall construction….
To read more, Click Here
My comments: Well written and comprehensive. Lender residential appraisers are used to UAD 2.5 with Q and C ratings. This new UAD 3.5 is much more extensive. A tablet and a good app for recording all the new information required is very important.
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The Harbor Model: Where Appraisers Take the Helm
The Harbor Model offers a bold blueprint for restoring transparency, authorship, and oversight in a valuation industry long dominated by silent data extraction.
For years, GSEs and private entities have extracted appraisal reports—copyrighted professional work—to train their own AVMs, only to use those models to replace appraisers outright. Harbor reverses that equation. Under Harbor, AVMs are reclassified as federally regulated valuation tools, ensuring enhanced appraisal oversight. Models like those used by Fannie Mae’s Collateral Underwriter are brought into public control, and transparency is enforced. The UAD dataset, inspection data, and AVM output now serve the public—not just the enterprise.
Harbor puts an end to the bidding wars. Under our model, fees are standardized, reviewed annually, and set to reflect the complexity of the assignment, not a blind auction. Every appraiser working under Harbor receives fair, posted compensation for their work. No bidding, no undercutting, no games. This creates a more stable profession, attracts new entrants to the field, and restores dignity to a role that has long been underappreciated and underpaid.
If you want to hear directly from them, there’s an interview available at the Harbor Oversight legislation page at https://harboroversight.org/legislation
To read more, Click Here
My comments: I included this article as it is an idea I never heard of. I don’t have any details or personal opinions on this but the appraiser comments are very useful. More information on the link above.
New proposed legislation in the Senate (Road to Housing, 2025) includes establishing a Public Appraisal Database in the Appraisal Modernization Act section. I will be writing about this Act in the September and October issue of Appraisal Today. I don’t have any details on the Public Database yet.
If you have any information, please hit the reply button and let me know.
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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.
Mortgage applications increased 3.1 percent from one week earlier,
WASHINGTON, D.C. (August 6, 2025) — Mortgage applications increased 3.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 1, 2025.
The Market Composite Index, a measure of mortgage loan application volume, increased 3.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3 percent compared with the previous week. The Refinance Index increased 5 percent from the previous week and was 18 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 18 percent higher than the same week one year ago.
“Mortgage rates moved lower last week, following declining Treasury yields as economic data releases signaled a weakening U.S. economy. As a result, the 30-year fixed rate decreased for the third straight week to 6.77 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Borrowers sought to take advantage of these lower rates, as both purchase and refinance applications increased over the week. Purchase activity continued to lead 2024’s pace, as increasing for-sale inventory of homes has been supporting homebuying, but on the other hand recent weakness in the economic environment has deterred some prospective homebuyers.”
Added Kan, “Refinance applications increased to their strongest pace in four weeks after being on a downward trend the prior three weeks. The refinance share increased to almost 42 percent, its highest level since April.”
The refinance share of mortgage activity increased to 41.5 percent of total applications from 40.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.5 percent of total applications.
The FHA share of total applications decreased to 18.5 percent from 18.8 percent the week prior. The VA share of total applications increased to 13.3 percent from 12.2 percent the week prior. The USDA share of total applications decreased to 0.5 percent from 0.6 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.77 percent from 6.83 percent, with points decreasing to 0.59 from 0.60 (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 $806,500) decreased to 6.65 percent from 6.74 percent, with points increasing to 0.59 from 0.51 (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 6.47 percent from 6.56 percent, with points decreasing to 0.81 from 0.83 (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 6.03 percent from 6.12 percent, with points increasing to 0.66 from 0.64 (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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