Newz: Appraisers using ChatGPT,
Appraiser Salaries, PAREA Problems
May 16, 2025
What’s in This Newsletter (In Order, Scroll Down)
- LIA ad: Appraisal Used in Divorce Case – Now What
- The Power of AI Is Not Absolute Using Chat GTP for Appraisers
- Retired Maine Railroad Caboose
- [Updated 2025] What’s the Average Real Estate Appraiser Salary?
- Indemnification Clauses: What Appraisers Should Know
- Treasury yields surge, but Fed rate cut odds decline after U.S.-China tariff pause. Mortgage rates may be poised to rise following de-escalation of tariff tensions
- The PAREA Program: Costly Promises, Empty Support
- Mortgage applications increased 1.1 percent from one week earlier
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The Power of AI Is Not Absolute
Appraisers Using ChatGPT
Excerpts: With the great power of artificial intelligence comes the responsibility to fact-check.
Artificial intelligence (AI), particularly ChatGPT, has captured the attention of professionals across various industries, including residential appraisal. With ChatGPT now reaching more than 100 million weekly users, according to OpenAI CEO Sam Altman, it’s clear that AI is poised to become a mainstay in our digital toolkit.
ChatGPT is an AI chatbot, powered by a large language model (LLM), which can comb through a vast amount of information and generate text in response to a question or prompt. This ability led me to explore its potential in “seeing” and evaluating property photos, which ultimately inspired me to create the RoboRater tool.
There were some early hiccups — and a learning curve — when I began prompting the AI tool to apply Uniform Appraisal Dataset (UAD) quality and condition ratings to what it “saw” in property photos. And then, in November 2023, Open AI introduced a feature allowing pro users to develop a custom generative pre-trained transformer (GPT), which led to a breakthrough. It enabled me, with no coding background, to tailor a specific version of ChatGPT that excels at assessing kitchen quality and condition ratings from photos, complete with insightful supporting commentary.
ChatGPT as a Writing and Public Relations (PR) Assistant
ChatGPT can also be an invaluable writing assistant and PR specialist, especially in sensitive communication scenarios like Reconsiderations of Value (ROV). It can skillfully rephrase blunt feedback into professional, constructive commentary.
Other topics:
Enhancing Clarity in Technical Reporting
Optimizing Appraisal Business Operations
Navigating the Limitations
To read more, Click Here
My comments: This is the most practical article I have read for appraisers using ChatGPT with good appraiser examples. I am going to start using it soon! Tim Andersen, the USPAP expert, recently wrote an article for Appraisal Today using ChatGTP.
AI does not always work out well.
For example. State Bar of California admits it used AI to develop exam questions.
Nearly two months after hundreds of prospective California lawyers complained that their bar exams were plagued with technical problems and irregularities, the state’s legal licensing body has caused fresh outrage by admitting that some multiple-choice questions were developed with the aid of artificial intelligence.
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Retired Maine Railroad Caboose That Has Been Turned Into a Quaint Cottage
Excepts: The camp in question is actually built around a retired Maine Central Railroad car that has been transformed into a quaint and cozy, cabin-style abode situated on a 1-acre lot in Madrid Township. The one-of-a-king listing has sped its way to the top spot on this week’s most popular homes list.
Whether you are looking for a unique hideaway to call your own or you’re an investor on the hunt for a rare rental property, this one-bedroom residence will have you on the right track with its very affordable $129,000 price tag.
Offered fully furnished, the tiny 360-square-foot home is loaded with “plenty of railway memorabilia,” including original observation seats found in two loft areas and railroad crossing signs at the entrance to the property.
To see the listing with 60 photos, Click Here
My comments: I have always been fascinated by cabooses – both on a train and moved on land. Maybe someday I will travel on a train in one or go to one and see the interior of caboose on land.
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[Updated 2025] What’s the Average Real Estate Appraiser Salary?
Excerpts: Survey data from the 2025 Appraisal Salary Guide shows that an appraiser’s annual income varies according to factors such as license level, education level, specialization, and more.
On average, appraisers earn $106,188 a year. However, as you can see from the chart below, the average annual appraiser salary varies significantly across license levels:
Trainee appraisers earn an average annual income of about $61K
Licensed residential appraisers earn approximately $67K
Certified residential appraisers earn more than $91K
Certified general appraisers make approximately $131K
Other Factors that Affect Salary
Data from the 2025 Appraisal Salary Guide shows that the average real estate appraiser salary rises not only with license level, but also education level and specialization.
Note that many real estate appraisers (70% of our survey respondents) work for themselves and are not salaried employees. If you operate as an independent appraiser or run your own appraisal business, your income will vary somewhat from year to year. However, our survey results show that self-employed appraisers earn more than those who work for appraisal companies, government agencies, appraisal management companies (AMCs), or a lender.
To read more, Click Here
My comments: Most residential appraisers are fee appraisers. This data and analysis shows you salaries. Compare it with your annual fee income and what you can do to increase your income.
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New URAR: Good news for appraisers who are not sure if AMCs will not pay low fees, too much to learn, using tablets, etc.
I’m working on my third article on the new URAR for the June issue: What is New in the New URAR. I go through a sample report line by line and list the changes on each page. I really like it.
The New URAR is a dramatic upgrade from the typewriter forms we have been using since the 1960s. For example, putting comments where they are needed. No more 20-40 page addendums that only the appraiser reads and maybe a few others read.
- May issue: Review of new class
- April issue: New URAR What It Means for Appraisers
New URAR use for VA, FHA, and USDA mortgages may be delayed
The New URAR is set up for VA, FHA and USDA but it is very unlikely that they will be able to get their systems set up by November 2, 2026 as they have limited resources. Source: Jeff Bradford, Bradford Technologies appraisal software, speaking at a recent annual local residential conference in Fairfield CA (Close to Sacramento).
Also, many departments in the federal government are being downsized making it less likely they will be able to set it up for their systems..
What if you’re not sure or don’t want to do New URAR reports on November 2, 2026 when it is required for GSE mortgages?
You will not be able to do any GSE appraisals but can do VA, FHA, and USDA appraisals using the current forms. You will have some appraisal work.
You will have time to get more information to help you decide on the New URAR. You will know what AMCs are paying for them as compared with FHA and VA form appraisals.
There will be issues, as it is a major change for appraisers. You will know about some issues before the November 2, 2026 deadline, to help you decide if you want to use the New URAR.
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Indemnification Clauses: What Appraisers Should Know
by Isaac Peck, Senior Broker at OREP.org
Excerpts: It’s a tale as old as time. When adding an appraiser to their appraisal panel, a lender or appraisal management company (AMC) will present to the new appraiser a 5-15 page-long “Appraisal Services Agreement” or “Appraiser Engagement Agreement” for signature. Inside these service agreements is an often-discussed and disputed clause: the indemnification clause.
Indemnification clauses were popularized in the years following the 2007/2008 real estate crash, as AMCs took over market share after the passage of HVCC and the Dodd-Frank Act.
Today, the vast majority of lenders and AMCs ask appraisers to sign an agreement that contains an indemnification clause. I just reviewed a service agreement from Wells Fargo where the indemnification provisions spanned nearly a full page!
If You Hire a Subcontractor
I tell this story to appraisers and AMCs alike when they ask me about indemnification clauses. Common law indemnification theory dictates that the party responsible for the mistake should pay for it. From a practical standpoint (especially when it comes to insurance), indemnification clauses make all the difference.
To read more, Click Here
My comments: Worth reading for info indemnification agreements that we don’t like to think about or read.
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Treasury yields surge, but Fed rate cut odds decline after U.S.-China tariff pause
Mortgage rates may be poised to rise following de-escalation of tariff tensions
May 12, 2025
Excerpts: The announcement of a 90-day pause in the U.S.-China trade war, and that both countries agreed to drastically reduce tariffs on each other’s imports during that time, sent stocks and Treasury yields soaring Monday. Futures traders also sharply cut the odds of a Federal Reserve interest rate cut in July, pushing the likely timeline of a Fed rate cut to the fall.
All of which may be good news for 401(k) balances but may spell disappointment for prospective homebuyers, with mortgage rates likely to rise in the short term.
News that the U.S. and China had retreated from their respective tariff rates of 145% and 125% first trickled out Sunday, with the White House’s official X account posting a quote from Treasury Secretary Scott Bessent, which stated that the two countries had made “substantial progress” in trade talks during a high-level meeting between trade representatives in Switzerland over the weekend.
To read more, Click Here
My comments: The US has lowered its 145% tariffs on most Chinese imports to 30%, and China has reduced its 125% tariffs to 10%. Of course, no one knows how long they will last. Tariff volatility is the most significant factor as it means uncertainty for all of us.
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The PAREA Program: Costly Promises, Empty Support
by AppraisersBlogs
Excerpts: The PAREA program markets itself as a shiny, mentor-free express lane to becoming a real estate appraiser, but its steep price tag and lofty promises often lead to a dead end. For many, it’s less a pathway to success and more a costly detour.
Eriv V, one frustrated hopeful, recently shared a raw, unfiltered account of his disillusionment with PAREA, exposing a system that falls short on support and delivers more headaches than help. Below, his candid review is quoted word for word, offering a stark warning for those eyeing a career in appraisal.
From the start, the program presented itself as a guided pathway through the appraisal process. However, what I encountered was mostly self-taught learning, dense materials, and very little interactive instruction. When I repeatedly asked for help, I was told that due to time constraints, one-on-one support wasn’t possible—which is exactly what I needed in order to learn the software, understand how to complete the appraisal forms correctly, and build confidence in the process.
There was no consistent mentorship, no step-by-step walk-throughs of how to complete assignments, and no real-time guidance.
To read more, Click Here
My comments: I became an appraiser because I wanted to work in the field and not only in an office. I trained two residential appraisers before licensing and went with them on every appraisal they did for the first year. Why did I train 2 appraisers? I was giving back to appraising.
PAREA seemed like a good idea, but I am not surprised there was not enough support to answer questions for this appraiser.
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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 1.1 percent from one week earlier
WASHINGTON, D.C. (May 14, 2025) — Mortgage applications increased 1.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 9, 2025.
The Market Composite Index, a measure of mortgage loan application volume, increased 1.1 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 0.4 percent from the previous week and was 44 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 2 percent compared with the previous week and was 18 percent higher than the same week one year ago.
“Last week saw steadier mortgage rates, as the FOMC meeting played as predicted, and market movements led to a small two-basis point increase in the 30-year conforming rate to 6.86 percent,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Refinance volume was little changed for the week, with a small increase in government refinances, and a decrease in conventional refinances. The news for the week was the growth in purchase applications, up 2.3 percent and almost 18 percent higher than last year’s pace. Despite the economic uncertainty, the increase in home inventory means there are additional properties to buy, unlike the last two years, and this supply is supporting more transactions.”
Added Fratantoni, “There was a notable gain in government purchase applications, up almost 5 percent for the week and 40 percent on an annual basis.”
The refinance share of mortgage activity decreased to 36.4 percent of total applications from 37.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 7.4 percent of total applications.
The FHA share of total applications increased to 17.4 percent from 16.4 percent the week prior. The VA share of total applications increased to 13.4 percent from 13.3 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.86 percent from 6.84 percent, with points remaining unchanged at 0.68 (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) decreased to 6.85 percent from 6.86 percent, with points increasing to 0.49 from 0.46 (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 6.59 percent from 6.56 percent, with points increasing to 0.89 from 0.87 (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 decreased to 6.12 percent from 6.17 percent, with points decreasing to 0.59 from 0.65 (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 6.09 percent from 5.97 percent, with points increasing to 0.74 from 0.31 (including the origination fee) for 80 percent LTV loans. The effective rate increased 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.
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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