Finding Comps with Few Sales for Appraisers

By on March 7, 2025   /   adjustments, AMCs, appraisal business, Appraisal fees, Economic analysis, Trump Changes   /   Leave a comment
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Newz: Pulling Comps in 2025, Appraiser Union? AMCs Overcharging Consumers

March 7, 2025

  • What’s in This Newsletter (In Order, Scroll Down)
  • LIA ad: Problem with An Affidavit
  • The struggle of pulling comps in 2025 By Ryan Lundquist
  • Op-Ed: Why An Appraiser Union Would Never Work By Dustin Harris
  • The Full Measure: February 2025 Housing Market Snapshot for Appraisers By Kevin Hecht
  • The Trump Administration’s Regulatory Overhaul: The Impact on CFPB, FHA, and the Housing Industry By Rob Chrisman
  • Homebuilders Warn of Rising Building Costs as Trump’s Tariffs on Canada and Mexico Take Effect By NAR
  • AMCs Overcharging Consumers? Morgan & Morgan Investigates
  • Mortgage applications decreased 1.2 percent from one week earlier

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The struggle of pulling comps in 2025

By Ryan Lundquist

Excerpts:

1) SALES TELL US ABOUT THE PAST

Comps aren’t easy today. The problem is there aren’t that many sales, so it’s not so simple to figure out value. Lately, I’ve been getting a ton of questions about this, so I wanted to share some things I’m doing on my end….

2) TWO OPTIONS TODAY

We have two choices for comps. Go back further in time in the immediate neighborhood, or go out further to competitive areas. Why not do both?…

3) HOW FAR AWAY CAN YOU GO FOR COMPS?

It’s not how far you can go, but where you should go. Read that again. This is true in any market. And where would buyers go for comps? That’s also a viable question. No matter where you’re getting comps, be sure they are a good substitution…

To read lots more plus see graphs and read appraiser comments, Click Here

My comments: Read This Article! Few sales are common in many areas. I prefer going back in time. I have been doing time adjustments since 1975, when prices were going up 5% per month in a semi-rural Northern California county. The GSEs seem to be making it way more complicated. I do them on every appraisal. If not needed, I always comment that the market is stable. It is the only adjustment I make on my non-lender appraisals, except for features that are unusual.

I have no idea why the GSEs complain that many appraisers are not doing them when needed. Maybe the appraisers never learned how? Many dollar adjustments are needed on the grid and can be much more difficult than time adjustments.

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10 Appraisal Myths

By on November 29, 2024   /   AI, appraisal, appraisal business, Appraisal fees, appraisal management company, Economic analysis, future, Highest and Best Use, liability, retirement, ROVs   /   Leave a comment
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Newz: 10 Appraisal Myths, AMCs – Appraiser Ripoffs –  AMC Junk Fees

November 29, 2024

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

  • LIA – Intended Use and User
  • Don’t Fall for These 10 Real Estate Appraisal Myths
  • Extraordinary 4-Story Megamansion With Rooftop Putting Green and 2 Pools Lists for $78 Million
  • Now What? On a New Trump Administration
  • Outrage Over Connect by ValueLink’s New Monthly “Junk Fee”
  • Mortgage applications increased 6.3 percent from one week earlier

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10 Real Estate Appraisal Myths

By Tom Horne

Excerpts: In this week’s post, I dispel some common appraisal myths that have been around for years.

10 Appraisal Myths

Myth #1: All real estate appraisers are the same

Myth #2: Appraisals are the same as the Zillow Zestimate

Myth #3: The appraisal always comes in at the contract price

Myth #4: The appraiser is working for the buyer

Myth #5: Cost always equals value

Myth #6: Comps must be within one mile of the subject property

Myth #7: Agents and appraisers cannot talk

Myth #8: Appraisals and home inspections are the same

Myth #9: Assessed value will equal market value

Myth #10: The “new” appraisal methods are better than the old

To read more, Click Here

My comments: I’m sure you have heard some, or all, of these questions. I have heard them. Read the full post to see the answers you can use.

This blog post is written for newer real estate agents, but a good reminder of what many other people think. For example, when I say I am a real estate appraiser, many people ask if I have any listings. They think I am an agent and don’t know what appraisers do. Unfortunately, that is the main reason appraisers have difficulty when trying to communicate appraisal issues. Few listened to appraisers speaking out about fraud before the 2008 crash. What did we residential lender appraisers get to “fix” the problem? AMCs.

I don’t know why the appraisal associations have never done much to let people know about what appraisers do.

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Appraiser and Real Estate Agent Communication

By on September 6, 2024   /   AMCs, appraisal, Appraisal fees, Economic analysis, non-lender appraisals   /   Leave a comment
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Newz: Disturbing AMC Violations, Appraiser and Real Estate Agent Communication

September 6, 2024

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

  • Top 10 Things Appraisers Wish Real Estate Agents Understood
  • Divorce Appraisal Red Flags
  • Carmel’s Iconic and Artistic ‘Owl House’ $3,750,000
  • Housing Market Update: August 2024
  • Please! Not Another Highest and Best Use Question?!
  • Appraisal Regulation Compliance Council Exposes Disturbing AMC Violations
  • Mortgage applications increased 1.6 percent from one week earlier

Real Estate Agents and Comparable Sales – Tips for Appraisers

Appraisal Business Tips 

Humor for Appraisers

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Top 10 Things Appraisers Wish Real Estate Agents Understood

McKissock Survey

Excerpts: Survey question: “What’s one thing you wish real estate agents knew about the appraisal process?”

Based on the answers we received, appraisers wish that agents knew the following:

  • The appraisal process is complex and takes time
  • Appraisers do not assign value
  • Appraisers are unbiased and must follow guidelines
  • Appraisers need their input and cooperation
  • How to select appropriate sales comps
  • The importance of providing accurate and detailed info in their listings
  • How to determine correct GLA (gross living area)
  • How renovations and upgrades affect value
  • How to prepare for the appraisal appointment
  • FHA/VA/USDA guidelines

Sample appraiser answers:

“How complex it really is. We don’t just pull numbers out of the air—they are market supported adjustments backed by ‘many angles“

Some brokers regard the appraiser as an adversary, who potentially can ruin their deal and end up without commission. They should learn that the appraiser is neutral and cooperating can be a benefit.”’ of research.”

“Entering an occupied home without agent or home owner present is a liability issue for appraisers—[we] need someone present to observe what we do.”

To read more, Click Here

My comments: Read the blog post and maybe get some good ideas for answering agent questions!

Many years ago a top local agent asked me why I was driving around taking photos. I explained they were similar homes (comps) I may be using in an appraisal. I realized she did not know much about what appraisers do.

When I started my appraisal business in 1986 I did presentations at all the local real estate offices, usually during their marketing meetings. I explained what appraisers do and how agents and appraisers can work together. They liked the information.

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What is a Complex Residential Property?

By on June 21, 2024   /   AMCs, appraisal, Appraisal fees, liability   /   Leave a comment
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How to Identify a Complex Residential Property

By Dan Bradley

Excerpts: A complex one-to-four family residential property is defined as a property that meets at least one of the following criteria:

  •   The property to be appraised is atypical
  •   The form of ownership is atypical
  •   The market conditions are atypical

Some of the key physical features that can make an appraisal assignment complex include:

  •  Size (significantly larger or smaller than typical for market)
  •   Floor plan (there may be functional obsolescence)
  •   Unique custom features
  •   Quality of workmanship or construction (higher or lower than the norm)
  •   Architectural design
  •   Adequacy of HVAC, electrical systems, well and/or septic
  •   Additional living unit(s)
  •   Non-conforming zoning
  •   Mixed-use property (for example, it is used as both a business and residence)
  •   Waterfront properties

Keep in mind that what is considered a complex residential property in one market might not be considered complex in another market. For example:

  •  A mansion in Beverly Hills is not atypical; a mansion located somewhere in rural America might be
  •  A log cabin in the mountains of Virginia is common; a beach-front log cabin in VA, not so much
  •  Manufactured or mobile homes with additions are common in rural areas, but generally not in cities

To read more, Click Here

My comments: Read this short article and keep it available. Very good lists of the factors.

Why do you want to know about this topic? Business is slow now, which is a good time to try appraising unusual homes. But, a fast turn time is not a good idea unless you are very familiar with the subject’s complexities. Do you have another appraiser who can help you? Don’t risk your appraisal license by getting in “over your head”. I get regular calls from appraisers who said “yes” but did not have anyone to advise them.

Very few appraisers, if any, would have experience on all these types of properties. For example, I have appraised many life estates, but no homes with a leasehold (ground lease) in a market area where such interests are uncommon. I have only appraised homes where the subject and all the nearby homes are leaseholds. I get advice for appraising it.

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Appraisers Riding the Waves of Up and Down Mortgage Rates

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post overpriced homes, appraising 3,000 years ago, AMCs good bad ugly, unusual homes, mortgage origination stats, etc

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Appraising Factory-Built Houses

By on June 14, 2024   /   adjustments, Appraisal fees   /   Leave a comment
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Factory-Built Houses: Types, Benefits, and Tips for Appraisers

By Dan Bradley

Excerpts: Factory-built houses are an important, yet often overlooked, part of the American housing market. Approximately 10% to 12% of new housing starts in the United States are factory-built. There are several advantages to building a house in a factory. For example, certain houses can be constructed for 50% less than a similar-sized site-built home, making quality housing more affordable for thousands of Americans. As an appraiser, your knowledge of factory-built housing is key to a credible appraisal.

This article examines several different types of factory-built houses, their five main advantages, and tips for appraising them.

Factory-built house is a term that refers generally to a number of house types that are constructed or fabricated, at least in part, off site. The prefabricated components are transported to the site and finished or reassembled there. By contrast, site-built, or “stick-built,” homes are put together at the building site from thousands of individual pieces (e.g., studs, nails, sheets of drywall, shingles, wires, pipes, electrical outlet boxes).

For appraisers, understanding the specific type of factory-built house you’re dealing with is key. It tells you which building codes apply, gives you clues about the construction process, and impacts how you approach the valuation.

Factory-built homes include:

  •   Mobile homes
  •   Manufactured homes
  •   Modular homes
  •   Panelized homes
  •   Pre-cut or kit homes

To read more, Click Here

My comments: This is worth reading, especially if you appraise these types of homes. It provides very good, understandable explanations, including identifying the types. For example, GSEs will not purchase or securitize a mortgage on a mobile home manufactured before June 15, 1976. Likewise, HUD will not issue FHA mortgage insurance on a pre-1976 mobile home.

I work in an urban/suburban area, mostly built up, and have appraised very few of these homes. However, they are definitely more affordable housing, which is a very hot topic now.

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I Can’t Believe I Just Bought a $5M Mobile Home’: A Look Inside 5 of America’s Most Lavish Trailer Parks

Just for Fun!

Excerpts: Multimillion-dollar price tags usually come attached to massive mansions or luxury condos—but now, it’s becoming more common to find them in mobile home parks in enviable locations.

But these aren’t just any trailer parks, as they’re more commonly known. For one, they usually sit on prime real estate. And the neighbors? They’re traditionally billionaires or A-list celebrities.

Prices in some of these parks can generally range from $1.5 million to more than $6 million, but that hasn’t put off buyers with that type of cash to spare.

Arguably, the most famous trailer park in America is Paradise Cove in Malibu. Here, celebrities “slum it” in mobile homes to be close to some of the most expensive real estate in the world.

In 2019, fashion maven Betsey Johnson sold her small pink house here for $1.9 million; in 2018, former “Baywatch” babe Pamela Anderson unloaded her trailer for $1.75 million; and in 2016, songbird Stevie Nicks sold hers for $5.3 million.

To read more and see the photos, Click Here

My comment: I had to include this fun article related to the article above

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Appraisers Riding the Waves of Up and Down Mortgage Rates

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post seller concessions, all cash sales, liability, new fee survey, unusual homes, mortgage origination stats, etc

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Data Collectors: Appraisers vs. Uber Drivers

By on May 12, 2023   /   appraisal business, Appraisal fees, data, Fannie, future, humor, non-lender appraisals   /   Leave a comment
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Certified Appraisers vs. Unlicensed Data Collectors

By Jonathan Miller

(13-minute video) Here’s a great take on the difference between Certified Appraisers vs. Unlicensed Data Collectors by Leigh Brown, President of the NC Association of REALTORS. Fannie Mae has been working hard to get rid of appraisers for years. Their latest twist is to re-categorize many appraisers as “Unlicensed Data Collectors.”

Fannie Mae will end up creating more instability for the trillions in the bond market – investors will have to process millions of valuations with the physical attributes of the home collected by unlicensed, uninsured, and unprepared individuals getting paid $10-$25 per inspection.

This is to follow up on a meeting Appraisal Institute representatives held in Washington, D.C. with members of the Federal Housing Finance Agency Divisions of Housing Mission and Goals and Fair Lending March 8 to discuss the new Value Acceptance program released by Fannie Mae…

Of particular concern is the encouraged development of an alternative workforce of property data collectors that may negatively impact aspiring appraisers’ ability to enter the appraisal profession…

To read more and watch the video, click here

To sign up for his weekly Housing Notes, click here I have been a subscriber for many years.

My comments: Miller tends to be negative about the AI, but this excerpt from his weekly email is worth reading especially the video!

This is the future of GSE using appraisers. Inspection or desktops are fine, but fees may be low and many don’t want to do them. Full appraisals only on the “though appraisals” where Fannie’s AI does not work.

Many appraisers are retiring or quitting. If you make it through this downturn there will be few appraiser competitors left for the next big upturn in business.

Appraisal vs Zillow vs AVM which is best

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 humor, non-lender appraisals, mortgage  forecast, staying positive when you’re slow, unusual homes, mortgage origination stats, etc.

To read more, click below

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2021 Appraiser Fee Survey

By on August 13, 2021   /   appraisal classes, Appraisal fees, bias, Fannie, UAD   /   Leave a comment
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2021 Appraiser Fee Survey

By Isaac Peck
Excerpt: The 2021 Appraiser Fee Survey includes 365 Metropolitan Statistical Areas (MSA), as defined by the U. S. Census Bureau, with rural areas included by state. The survey includes eight different appraisal products, including reviews and FHA appraisals, and addresses turn times, to offer insight into that controversial topic by area.
To check out the very detailed report for your MSA, click here
My comments: Lots of info by MSA! I got this info Wednesday and did not have time to look at it in detail.
Raise Your Fees, especially if working for AMCs!! Before AMC broadcast bids looking for the lowest fee, appraisal fees did not change much when volume changed. Since 1986 direct lender fees went up gradually. In my area, fees were about $250 in 1986 for SFR. Now fees have gone up to about $450 – $550 for regular long-time lender clients (and local AMCs). National AMCs are not loyal. Direct lenders can be loyal.
Fascinating and very comprehensive results by state and MSAs. I hear a lot about lenders and borrowers complaining about high appraisal fees. But in my area fees are not that high per the survey. I hear regularly about desperate AMCs who will pay $1,000 or more for appraisals. Appraisers are deluged with AMC appraisal requests, which are often deleted unopened of course. I also hear that sometimes the fee to the appraiser is much lower than the AMC fee.

Appraisal Business Tips 

Humor for Appraisers

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To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, bias, fees, non-lender appraisals, UAD, Fannie Update, mortgage origination stats, etc.

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What is an Appraisal “Inspection”?

By on July 23, 2021   /   adjustments, appraisal business, Appraisal fees, bias, FHA   /   2 Comments
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Appraisal Inspection Vs. Home Inspection

Excerpts: Why are these roles often confused? What is an Appraisal “Inspection”?

The root of many misconceptions about the appraisal inspection is the word “inspection” itself. It is true that as part of the appraisal process, the appraiser might perform some sort of onsite quality, condition, and functional utility survey of the property to determine its relevant characteristics and if it meets certain standards. For example, to the general public, the FHA requirements that an appraiser must operate certain systems in the home (plumbing, electrical, HVAC) seems similar to what a licensed home inspector does.

The Oxford Online Dictionary defines inspection as: “Careful examination or scrutiny”

Merriam-Webster’s Online Dictionary defines inspection as:

“The act of looking at something closely in order to learn more about it, to find problems, etc.; the act of inspecting something”

It’s somewhat of a benign definition, is it not? There’s nothing really scary there, yet many appraisers attempt to avoid confusion, and (potentially) limit their liability, by avoiding use of the word “inspection” entirely. Many appraisers use euphemisms for this term in their appraisal reports, such as “property visit” or “viewing.”

Even FHA got into the euphemism game with the publication of Handbook 4000.1, which went into effect in 2015. The words “inspect” or “inspection” generally do not appear in reference to an appraiser’s obligations. Instead, the words “observe” and “observation” are used.

To read more, click here

My comments: USPAP has never required an inspection. USPAP defines “Personal Inspection” as the following: a physical observation performed to assist in identifying relevant property characteristics in a valuation service.”

The word “inspection” is used in various locations, such as Advisory opinion A02, including Minimal level of Inspection.

The fourth exposure draft for the 2023 version has Section 1: “Review of Requirements about Disclosing a Personal Inspection.” Final comments deadline is today, July 23, 2021.

Revised FHA Handbook 4000.1 effective 9/14/15. Are you ready for the changes? Get the facts!!

What are Pass through Bedrooms for Appraisals

Appraisal Business Tips 

Humor for Appraisers

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To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on bedroom closets, Updated FHA 4000.1, bias, unusual homes, mortgage origination stats, etc

 

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New sewer line increases value for appraisals?

By on January 22, 2021   /   adjustments, appraisal business, Appraisal fees, appraisal how to, Mortgage applications, unusual homes   /   Leave a comment
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My new sewer line adds huge value, right?

January 19, 2021, By Ryan Lundquist

Excerpt: A new sewer line. That’s what 2020 gave my family as a parting gift before the year closed. Yep, just before Christmas, we had to replace our entire line at a whopping $13,688. I know that sounds crazy expensive, but we had four separate bids and went with the most reasonable one. In part it was so pricey because we had one hundred feet of the line under eighty feet of concrete.

The good news is my house is worth $13,688 more now, right?

To read more plus lots of appraiser comments click here

What to Do When Your Appraisal Is Under Review(Opens in a new browser tab)

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at covidscienceblog.com

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To read more of this long blog post with many topics, click Read More Below!!

NOTE: Please scroll down to read the other topics in this long blog post on fees, house settling, unusual homes, mortgage origination stats, Covid tips for appraisers, etc.

 

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What is Included in Appraisal Square Footage?

By on October 23, 2020   /   appraisal business, Appraisal fees, square footage   /   Leave a comment
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Question: Can it count in the square footage?

Roof detail house

By Ryan Lundquist

Excerpts: Can you include it in the square footage? I get questions like this almost every week. Is it okay to count an accessory dwelling in the living area? What about a pool house? How about a man cave or she shed? Let’s talk about this.

The straight dope: It’s tempting to lump something else in the backyard into the square footage, but that’s not appropriate per ANSI measuring standards. Suppose you have to walk outside of the house into something else that is not directly accessible to the house. In that case, we’re really dealing with something that isn’t considered to be a part of the main house…

To read more, click here

My comments: Written for homeowners, but has some good remarks on square footage, such as “lumped square footage” in MLS. What is Included in Appraisal Square Footage can be tricky and controversial. It can also vary by geographic area.

How accurate is the reported square footage from the tax records in your primary service area?(Opens in a new browser tab)

Marketing and Management Tips for Appraisers

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