Market Trends and Market Conditions Adjustments Appraisals

By on December 6, 2024   /   adjustments, AMCs, appraisal how to, state appraiser regulators, waivers   /   Leave a comment
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Newz: GSE New Market Conditions Policy, State Board Complaints, Waivers

December 6, 2024

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

  • LIA ad – Navigating Value Revisions in Appraisals
  • Market Trends and Market Conditions Adjustments.
  • A Ferrari Inspired Masterpiece With 20K square Feet of Luxury Resort Amenities Listed at 55 Million in Delray Beach FL
  • November 2024 Real Estate Market Update By Kevin Hecht
  • 5 Tips to Handle Appraisal Board Complaints
  • Correcting the Record: Accurate Group’s Commitment to Compliance and Industry Excellence
  • FHFA’s Massive Expansion of Appraisal Waivers: What It Really Means
  • Mortgage applications increased 2.8 percent from one week earlier

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Market Trends and Market Conditions Adjustments

Working through the new Market Conditions policy and advisory from Fannie Mae

By Ken Dicks

Excerpts: Did Fannie Mae just throw a wrench into how residential appraisal reports for mortgage transactions are completed with their recent announcement on Market Conditions?

As an appraiser, it is highly likely at some point you will see the following or a similar request soon after your appraisal is submitted to your client, or even months after your appraisal is accepted by your client: Please provide support for your market conditions adjustment conclusions.

Appraisal Quality Control and Appraisal Quality Assurance create a revision request minefield filled with Lender and Investor tailored appraisal reporting requirements and preferences. Review of the appraisal reports is required by the lender or whoever the lender chooses to delegate this requirement to (i.e. Appraisal Desk, AMC, etc.).

As a practicing appraiser, the announcement and accompanying exhibit prompted a series of questions in my mind.

  • Does Fannie Mae want to see this specific graph in all appraisals?
  • What does USPAP say?
  • What level of data and analysis does an appraiser need to present when providing support for market conditions adjustments?

The following is where I have arrived at developing answers:…

To read more, Click Here

My comments: Worth reading the full article, plus the appraiser comments.

I am so glad I have not done any GSE appraisals since 2008! I don’t care what the GSEs say. I comply with USPAP. Of course, I always make market adjustments on my residential appraisals or explain why no adjustments was needed. It is the only dollar adjustment I make on non-lender forms unless the subject has an unusual feature requiring research and analysis.

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A Ferrari Inspired Masterpiece With 20K square Feet of Resort Amenities Listed at $55 Million in Delray Beach FL

Excerpts: 7 bedrooms, 11 baths, 20,723 sq.ft., 2.51 Acre lot, Built in 2024

Casa Maranello, an extraordinary residential masterpiece and one of the most distinguished estates in the United States. This ultra-luxury Italian contemporary residence is situated in the exclusive Stone Creek Ranch of Delray Beach, Florida, and is a true paradise for Ferrari enthusiasts.

This trophy estate epitomizes ultra-luxury with a timeless contemporary design and unmatched sophistication. Crafted with the finest materials, equipped with lavish amenities, and infused with the passion of a Ferrari collector, this estate is a seamless blend of elegance and innovation.

For the Ferrari aficionado, the estate’s 12-car gallery garage is a dream realized, showcasing automotive masterpieces with style and reflecting the Ferrari-inspired legacy that sets this home apart.

To read more, Click Here

To see the listing with 122 photos, Click Here

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November 2024 Real Estate Market Update

By Kevin Hecht

Excerpts: In the wild world of real estate, the market sometimes feels like a snow globe—just when you think things have settled, someone gives it a good shake. This November, the housing economy is anything but calm. Mortgage rates are playing an unpredictable game of limbo, builders are cautiously optimistic yet slowing down, and inventory shortages are keeping buyers on edge.

For appraisers, the challenge isn’t just interpreting the numbers—it’s navigating the emotions, expectations, and economic ripples that come with them.

If the housing market were a soap opera, the Fed’s rate cuts would be the season’s biggest plot twist. This November, the Federal Reserve continued its easing cycle with a 25-basis-point rate cut, bringing the Federal Funds Rate to 4.5%-4.75% (realtor.com). While buyers and sellers hoped this move would send mortgage rates tumbling, the reality has been more complex. Long-term rates like mortgages don’t always follow the Fed’s lead, and this time is no exception.

1. Mortgage Rates: The Drama Continues

Appraisers, take note: With buyers hesitant to lock in loans at these rates, the volume of purchase-related appraisals may remain subdued for now. That said, be prepared for a potential rise in refinance appraisals as rates inch downward.

2. Existing Home Sales: A Flicker of Life

3. New Home Sales and Construction: Slowing Down But Not Out

4. The Housing Shortage: A Persistent Challenge

5. Looking Ahead: The Fed’s Next Moves

Final Thoughts: Appraising in an Ever-Changing Market

November has shown us that the housing market is as complex and unpredictable as ever. For appraisers, the challenge lies not just in interpreting market data but in connecting it to the real-world decisions of buyers, sellers, and lenders.

Whether it’s navigating the impact of rising rates, adjusting to regional variations in sales activity, or understanding the nuances of housing supply shortages, your role as an appraiser has never been more critical.

To read more, Click Here

My comments: I read many articles about these topics, but this is the only one focusing on what it means for appraisers.  Read the topic details and, more important, what they mean for appraisers.

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New in the December 2024 issue of Appraisal Today

Pay by December 31 at midnight and get a Tax Writeoff

for Your 2024 Taxes!

  • 2024 Year end tax planning for appraisers. You can still save on your 2024 taxes!
  • The Elasticity of Demand and Market Data Adjustments, By Steve Smith, MAI
  • Marketing with holiday gifts and cards. – An Easy and Excellent Marketing
  • Appraisal: Profession, Industry or Trade? By Martin Wager, ASA, IFA, MNAA

What’s in the articles?

  • Lots of advice on tax planning. One good tip will pay for the newsletter.
  • Demand and Adjustments – interesting comments from a long time expert appraiser.
  • Gifts and cards – the easiest marketing I have ever done. I have been doing it for over 30 years.
  • What is appraisal? A very controversial topic. Discussions started in 1932.

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5 Tips to Handle Appraisal Board Complaints

By Kevin Hecht

Excerpts: Every appraiser dreads opening their mail to find that an appraisal board complaint has been filed against them. Yet, it happens more often than you might think. Appraisal board complaints often arise when the receiving party doesn’t like the outcome of the report. Allegations may include bias, failure to disclose a material fact affecting price, or inappropriate use of comparable properties. Whatever the nature of the complaint, it’s critical to handle it professionally and efficiently.

This is not the time to put your head in the sand. Disciplinary actions can affect your license, your livelihood, and even your ability to work in other states. Instead, follow these five actionable tips to address the matter head-on and resolve it as quickly as possible.

Tip 1: Understand the Nature of the Complaint

Tip 2: Engage Professional Assistance

Tip 3: Gather Evidence and Documentation

Tip 4: Communicate Clearly and Proactively

Tip 5: Learn from the Experience

Final Thoughts on Appraisal Board Complaints

Whether you engage an attorney, an appraisal consultant, or both, assembling the right team of professionals is critical to navigating an appraisal board complaint. By understanding the complaint, gathering evidence, and communicating clearly, you can handle the process confidently and protect your career.

To read more, Click Here

My comments: When I receive calls from appraisers with difficult issues. I sometimes recommend declining the assignment, before or after accepting it. I always say “Do you want to risk your appraisal license for this appraisal.”

When I get that “funny feeling” about what the client wants, I decline the assignment. I learned this the hard way decades ago – by not declining and it turned into a mess.

The article did not mention contacting your E&O company. I always recommend doing this. They may have attorney recommendations for handling your case. Also, Tim Andersen, MAI consults with appraisers who have state board complaints or want to avoid complaints.

For more info on Tim, Click Here

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Correcting the Record: Accurate Group’s Commitment to Compliance and Industry Excellence

By: Accurate Group, LLC

Excerpts: We were understandably offended by the article published last week on AppraisersBlogs and eAppraise.com, titled “Accurate Group’s Appraiser Selection Practices Expose Troubling Industry Tactics”. The article constructs a false and unfair picture of Accurate Group’s appraisal assignment practices and integrity. As one of the nation’s leading appraisal management companies (AMCs), we take great pride in our commitment to compliance and the delivery of high-quality services.

The accusations made in the article are not just incorrect—they are deeply misleading and damaging, not only to Accurate Group but to hundreds of professionals who work diligently to uphold our high standards.

We want to emphasize three key points upfront: Accurate Group does not interfere with appraiser independence, we do not request appraisers to appraise properties at stated values, and we do not prioritize low fees over quality appraisers.

To read Accurate Group, LLC’s full response, Click Here

My comments: I wrote about this topic in last Friday’s email newsletter. The original appraisersblogs post was deleted this week.

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FHFA’s Massive Expansion of Appraisal Waivers: What It Really Means

by Isaac Peck, Publisher WorkingRE

Excerpts: On October 28, 2024, the FHFA proudly announced at the MBA Annual Convention in Colorado that it was significantly expanding the eligibility criteria for both appraisal waivers and waivers + property data collections deployed by Fannie Mae and Freddie Mac (the Government-Sponsored Enterprises, or GSEs)—in lieu of traditional appraisals.

Risks to the System

Mark Calabria, former Director of the FHFA and currently a senior advisor at the Cato Institute, finds this move by current FHFA leadership irresponsible. It’s not that he is opposed to all waivers; as FHFA Director during the COVID-19 pandemic, he approved expanding them for public health reasons, a decision not everyone agreed with, but which he takes ownership of now. “I will take ownership of what we did during the pandemic. In 2020, there were significant concerns about appraisers going into homes and the expansion of waivers was meant for public health purposes. The waivers were meant to be temporary and we made sure there were mechanisms in place to study the performance of loans that were granted waivers,” Calabria says.

But things are different now. There is no public health emergency, and the guardrails that accompanied the COVID-19 waivers are being abandoned, according to Calabria. He believes this is because GSEs see the appraisal process as adversarial to home sales rather than a vital part of the process.

Gaming the System

Ed Pinto, Senior Fellow and Codirector of the American Enterprise Institute (AEI), agrees with Calabria that expanding the use of waivers is risky. While Pinto says it will be hard to predict exactly how many additional waivers will result from this expansion, it is easy to see how the FHFA’s move allows players in the real estate market to game the system, which he argues will ultimately hurt the buyers, sellers, and appraisers.

How It Works

It may come as no great shock that Lyle Radke offers a different viewpoint to Pinto’s and Calabria’s assessments. As principal of collateral risk at Fannie Mae, Radke says this change in policy around waivers and LTV is not as substantial as many stakeholders are making it out to be.

To read more, Click Here

My comments: Very comprehensive article of the issues. AEI has been regularly reporting on waivers data and analysis for a long time. For more info, Google AEI waivers.

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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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Appraisal Cost Approach and Highest and Best Use

By on November 16, 2024   /   AI, appraisal, appraisal how to, cost approach, Economic analysis, forecast, future, Highest and Best Use, liability, USPAP, zillow   /   Leave a comment
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Newz: Now What For Appraisers After Election? Generative AI and adjustments?

November 15, 2024

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

  • (LIA ad) Intended Use and User
  • 10 Questions on the Cost Approach and Highest and Best Use
  • A Real-Life ‘Yellowstone’: Historic 52,000-AcreArizona Ranch Hits the Market for $42 Million—Complete With a Private Airstrip and Off-Grid Cabin
  • Now What? On a New Trump Administration
  • Can Generative AI solve the adjustment support paradigm
  • How Deep Fakes Have Burrowed Into Home Finance
  • Murder in the flying saucer: inside The Chemosphere in Los Angeles, CA
  • Mortgage applications increased 0.5 percent from one week earlier
  • So Many Appraisal Cost Approach Questions
  • Appraisal Business Tips 
    Humor for Appraisers


    Click here to subscribe to our FREE weekly appraiser email newsletter and get the latest appraisal news!

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10 Questions on the Cost Approach and Highest and Best Use

By Timothy Andersen

Excerpts: It is clear most appraisers do not like to perform the analytics inherent in the Cost Approach. This may be because most appraisers simply do not appreciate its power. Consider these 10 Cost Approach questions.

10 QUESTIONS TO CONSIDER

Take a look at these 10 questions on the Cost approach (and various items related to it). After you are finished, you will still not like to do it. But you may appreciate its analytical and interpretative powers even more.

1. On the 1004 form is the indication that Fannie Mae does not require the Cost Approach to Value. However, where does the form instruct the appraiser not to complete the analytics of the Cost approach? (Spoiler Alert: It does not.)

2.   Instructions on the form state the appraiser is to “…[p]rovide adequate information to the lender/client to replicate the [herein] cost figures and calculations.” However, where does the typical appraiser provide such replicable information?

3. In addition, the reporting form requires the appraiser to “…[s]upport the opinion of site value [with a] summary of comparable land sales or other methods for estimating site value.” Nevertheless, where does the typical appraiser provide such summary information?…

So, it is clear from these Fannie Mae instructions that the appraisal of a SFR includes an analysis and valuation of the subject site separate from the valuation of the site as improved. Does this mean to conclude a site value as if the subject site were vacant and available to be put to its highest and best use? (Spoiler Alert: Yes, it does.)

To read all 10 Q&As, Click Here

My comments: Of course, for custom home construction the Cost Approach is required to determine the feasibility of construction before building the home. I got some good ideas on using the Cost Approach from this article.

Read more!! →

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Waterfront Property Appraisals

By on September 27, 2024   /   appraisal how to, appraisal modernization, Economic analysis, liability, Mortgage interest rates   /   Leave a comment
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Newz: Rate Drops and Appraisers, UAD Overhaul, Avoiding Court

September, 30 2024

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

  • Avoiding Court: A Common Sentiment Among Appraisers (LIA ad below)

  • Making Waves: Appraising Waterfront Property

  • $850K Nantucket ‘Shack’ That Looks Set To Plunge Into the Sea

  • New UAD Overhaul: What Appraisers Can Expect in 2025 & Beyond

  • Sticky Prices

  • The Fed is finally lowering interest rates. What does it mean for appraisers?

  • Experts Predict Where Mortgage Rates Are Headed in 2025 as the Fed Cuts Rates

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Making Waves: Appraising Waterfront Property

Excerpts: Appraising waterfront properties involves a comprehensive evaluation of various factors that go beyond typical residential appraisals. By considering the unique aspects of water frontage, local regulations, environmental factors, and property-specific amenities, you can provide credible and comprehensive valuations that reflect the worth of these highly sought-after properties.

Understanding the depth, quality of the water, and type of shoreline is crucial, as these elements directly influence the property’s usability, aesthetics, and long-term stability. The importance of these factors cannot be overstated, and they deserve careful consideration in every waterfront property appraisal.

1. Water Frontage and Access

One of the most critical elements in appraising waterfront properties is the type and extent of water frontage. The value can vary significantly depending on whether the property is adjacent to a lake, river, ocean, or pond.

5. Depth of the Water

The depth of a water body significantly affects its usability, particularly for recreational activities like boating, fishing, and swimming. Shallow water might limit boating and can lead to stagnant water, which may contribute to unpleasant odors and an increase in insects like mosquitoes.

Conversely, deeper water is often clearer, supports a healthier ecosystem, and is more desirable for recreational use, thereby enhancing property value.

To read the details on all 8 factors, Click Here

My comments: Excellent article. Worth reading. The best I have read on this topic. Even if you never appraise a waterfront home, most people have been to a lake or other type of waterfront property on vacation. I live on an island in San Francisco Bay with water on all sides plus a small area on a nearby peninsula with 3 sides waterfront. I moved here in 1980 and appraised hundreds of waterfront properties including condos plus semi-detached and detached homes.

I lived for 25 years in three waterfront homes with boat docks in my city and am very familiar with with the issues above. I have appraised waterfront homes with 7 of the 8 factors in the blog post, except utilities as all were public utilities with no problems).

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Value of a Pool

By on July 5, 2024   /   adjustments, appraisal, appraisal business, appraisal how to, forecast, real estate market, zillow   /   Leave a comment
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What is a pool worth? It depends.

By Ryan Lundquist June 26, 2024

Excerpts: With and Without Pools (Big Difference)

There’s a huge difference in the stats when we compare homes with and without pools. The properties with pools are larger in square footage and lot size, higher in price, and they’ve taken slightly less time to sell too.

In short, the higher the price, the greater chance there is a pool. This likely has to do with the cost of building a pool, cost of maintaining a pool, and even larger parcels at higher ranges – not to mention buyers at higher price points expecting a pool more often.

The rhythm of pool sales basically follows the pattern we see in the entire market. More sales as the year unfolds, and they typically peak around June. Some smaller areas could be slightly different.

Seriously though, What is a pool worth?

It depends. Different price points and locations come with different expectations. There isn’t a one-size-fits-all answer for the value of a pool. In other words, we can’t just apply one figure to a property because that number isn’t going to make sense everywhere. This is where we have to study the comps. With that said, my observation is pool adjustments have generally gone up since the pandemic as buyers are more in tune with the importance of a backyard. Have you seen that also?

To read more, Click Here

My comments: Check out Ryan’s tables to see his data analysis, which is not difficult to set up.

When I first started appraising in suburban Bay Area cities in the mid-1980s, homes with pools sold for more in some neighborhoods with higher-priced homes. MLS always said a pool was there, which is a good way to check it out. At that time, MLS data analysis was much more limited than it is today. I saw this in a particular neighborhood with very hot summers. This is still the same now.

In contrast, where I live, about 15 miles west, on an island on San Francisco Bay, pools have never been a plus or a minus. Weather is “Mediterranean” weather without hot summers. Often sellers said they would remove the pool, but the buyers never requested it.

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NOTE: Please scroll down to read the other topics in this long blog post on HOA Horror Stories, Zillow and Redfin lawsuits Videos and Privacy, Residential to commercial transition, real estate market, unusual homes, mortgage origination stats, etc

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Paperless Appraisal Office?

By on May 31, 2024   /   appraisal how to, bias, HOME INSURANCE, liability   /   Leave a comment
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10 Steps to a Paperless Office

By Mike Fletcher

Excerpts: If you’ve talked to appraisers who have gone digital, you know they love not having boxes of old reports and workfiles cluttering their offices, homes, and garages and not spending money on paper, toner, and other equipment. Even better, appraisers who run a paperless office often enjoy increased productivity and efficiency.

If you’re ready to enjoy the benefits of getting rid of paper, I’m sharing 10 steps to switch to a completely paperless office. While you may need to tailor this blueprint to your preferred methods and workflows, this will help you get started.

Summary

Switching to digital files and a paperless office saves you time and offers better protection for your files. Making the shift to get rid of printed documents and handwritten notes isn’t easy at first, but by going one step at a time and relying on your appraisal software’s tools, you’ll be paperless in no time.

Topics with detailed and practical advice:

1. Why do you want a paperless office?

2. Commit to change – Be aware of wanting to stay in the familiar

3. Identify your paper and how to go paperless

4. Obtain needed equipment for your paperless office

5. Determine your storage needs in a paperless office

6. Establish a new workflow in your paperless office

7. Going paperless starts small

8. Add another paperless item

9. Get trained

10. Seek out your peers

To read more, Click Here

My comments: What appraiser does not want to go paperless? No one. Read this article with lots of good advice!

Business is slow for many appraisers. Going paperless is an excellent option to consider.

This is by far the best article I have read on going paperless. It is written for appraisers, is understandable, and is not too long. The author is a veteran residential appraiser and self-proclaimed “Data Nerd.” He is currently a Senior Data Steward at Corelogic.

I have a home garage and business office full of appraisal files, plus my business records for taxes. I keep hoping someone will come in and steal all the paper and the filing cabinets

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NOTE: Please scroll down to read the other topics in this long blog post on HUD bias Complaints, E&O insurance, home fire insurance, unusual homes, mortgage origination stats, etc

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Basement Issues and Values

By on May 3, 2024   /   adjustments, appraisal how to, non-lender appraisals, real estate market   /   Leave a comment
Tags: , , ,

Understanding Basement Contributory Value

By Jo Traut

Excerpts: Determining how a basement contributes to a residential property’s value requires an appraiser to determine what type of basement the home has, its level of finishing, and take into account common concerns, like evidence of mold or signs of structural concern.

By following best practices, including separating the basement from the above-grade finished area, understanding the intended use of the space, and completing comprehensive research, you can evaluate the basement’s contributory value more accurately.

Topics

  • Know your basic basement types
  • How is the basement finished? Determining levels
  • Best practices when appraising a basement
  • Know the intended use and client requirements
  • Common problems in basements
  • Environmental hazards: One of the most significant issues appraisers run into is mold.

To read more, Click Here

My comments: This is one of the best discussions of basements I have read. It is worth reading. In my area, there are few fully underground basements, as we have a mild climate. Most homes were built prior to 1930, and there are many types of “basements.” They are not easy to determine added value, if any. I research, check with agents, check permit histories, try to get comps with the same type of basement, etc. The type and level of finish are critical.

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NOTE: Please scroll down to read the other topics in this long blog post on non-lender appraisals and diversification of your appraisal business, home insurance problems affecting values, unusual homes, mortgage origination stats, etc.

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How To Appraise Rural Properties

By on March 15, 2024   /   appraisal business, appraisal how to, modernization, Uncategorized, USPAP   /   Leave a comment
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How To Appraise Rural Properties

Excerpts: Appraising residential properties in rural areas can be both challenging and rewarding. Unlike the standardized expectations of urban and suburban properties, rural properties often present unique characteristics that require a nuanced approach to valuation. Whether you’re a seasoned appraiser or new to the field, having a better understanding of rural properties is essential for providing credible appraisals. In this guide, we’ll explore what defines a rural property, the challenges appraisers face, reasons for conducting rural appraisals, strategies for finding comparables, and tips for writing a compliant appraisal report.

  • Defining rural properties – USDA and GSEs
  • Challenges of appraising rural properties
  • Appraising rural properties presents unique challenges due to their diverse characteristics and market dynamics.

Topics include:

  • Diverse property types and uses
  • Unique property characteristics
  • Limited market activity and more
  • Writing your rural property appraisal report – good ideas

To read more, click here

My comments: Worth reading, if only to find out about rural appraising. Well written. There are relatively few residential lender appraisals available now. This is an excellent diversification opportunity, with little competition from other appraisers or the GSEs use of other ways to get a value without human appraisers.

What if there are few rural areas near you?

You can expand your area to include rural appraisals to get more business.

When I worked for a northern California assessor’s office with rural areas I learned a lot about almond growing (the main crop) and other ag topics. It is not hard to learn the valuation factors. I had niece who had several horses for many years where she lived. There are equestrian facilities within 5 miles from my house in Oakland hills and in farther out Bay Area cities with larger lots. You may have some similar rural experience now!

The American Society of Farm Managers and Rural Appraisers www.asfmra.org has a specialty in Rural Appraising, but it requires a Certified General. There may be seminars available. Another reason for upgrading!

Urban, Suburban, Rural in Appraisals

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NOTE: Please scroll down to read the other topics in this long blog post on USPAP and Personal Inspection, GSE Appraisal Modernization, Transaction costs and values including real estate commissions, unusual homes, mortgage origination stats, etc.

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2024 USPAP For Appraisers

By on October 6, 2023   /   adjustments, appraisal how to, Economic analysis, Fannie, hybrid appraisals, non-lender appraisals, real estate market, USPAP   /   Leave a comment
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2024 USPAP

Source: Appraisal Foundation

The 2024 Uniform Standards of Professional Appraisal Practice is now available for purchase in physical and digital formats.

This year, for the first time, you can purchase just the book of USPAP standards for $35. This covers all Definitions, Rules, and Standards.

We also have a new product launching this year. All Advisory Opinions, Frequently Asked Questions and the recently launched Reference Manual will now be part of a standalone publication called the 2024 USPAP Guidance and Reference Manual.

This change reflects the maturation of USPAP, resulting in longer effective dates. The ASB will continue to review USPAP for changes when necessary but will shift much of its focus to providing more guidance to the marketplace. Appraisers can now buy one set of USPAP standards and keep that publication on their bookshelf for as long as that edition is effective and purchase just the Guidance and Reference Manual as needed for coursework and updates.

If you like having the USPAP standards and guidance material linked, we still have you covered. You can also purchase a linked digital version of the eUSPAP and Guidance and Reference Manual and get seamless access across both documents.

To read the full letter, click here

My comments: USPAP 2024 is effective January 1, 2024. I’ve been waiting for a very long time for longer than 2 years between effective dates. Also, there is no ending date for the 2024 version.

When USPAP started, it was very exciting as appraisers had to decide what needed to be changed or added. Lots of people wanted to be on the ASB. Over time, I quit following the updates as there were few significant changes.

2024-2025 USPAP 7-Hour Update Course is being approved or is approved, in the states. I assume a new class will be required every two years in the future. Gotta keep that money coming into the Appraisal Foundation, I guess…

I really hated the classes when there was not much to say except a rehash of the past. I taught USPAP before the ASB told you what to teach. It was my favorite class as we could focus on issues in our current market. Of course, now there is appraiser discrimination, the current hot topic. Personally, I think there is very, very little intentional discrimination by appraisers, compared with the intentional discrimination by lenders (and others). “Red Lining” still exists, some are in the same locations.

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NOTE: Please scroll down to read the other topics in this long blog post on  non-lender appraisals, economics analysis, Fannie getting rid of appraisers?, unusual homes, mortgage origination

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NAR Member Survey on Appraisal Data Collectors

By on September 22, 2023   /   appraisal business, appraisal how to, non-lender appraisals, real estate market, retirement, state appraiser regulators   /   Leave a comment
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NAR  Member Survey on Data Collectors

Excerpts: In May 2023, NAR surveyed its members pertaining to data collectors in the appraisal process. Here are a few of the many survey results.

Survey respondents

Sales agents accounted for the largest proportion, with 45% of participants holding this license. Brokers followed with 24%, and appraisal-certified professionals comprised 14% of the respondents. Broker-Associates and Appraisal Licensees accounted for 13% and two percent, respectively, while the remaining two percent reported holding other types of real estate licenses.

According to the survey responses, the majority of participants (76%) perceive the quality of property data collected by data collectors to be lower than that collected by appraisers themselves. Conversely, 23% of respondents believe that the quality of data collected by data collectors is comparable to that of appraisers.

The survey findings indicate that 30% of respondents reported that a data collector had given them the impression that they were the appraiser or had a role other than merely collecting property data.

Fifty-one percent of respondents expressed safety concerns with the data collection process.

To read more, click here

My comments: Now we know what NAR members think about it. Not very positive. I was surprised at how negative they were. Read the full report. Very interesting. I am working on an article on Hybrid Appraisals for the November issue of Appraisal Today. To me, the big issue is who is doing the inspections. Only appraisers do the appraisals. I see very different levels of inspectors.

Before Covid, I talked with various AMC upper-level managers who were testing it. What they were doing about inspectors had a wide range. They included appraisers, real estate agents, and someone with a week, a month, or online video training. They should definitely not be paid the same. An AMC can offer different levels to their clients, depending on how much reliability their lender customers want or need.

On a more positive side, I have done thousands of drive by appraisals since 1986. I drove by the house and looked at what was nearby, etc. For example, I’m appraising a Victorian built before 1910. There is no way to know what the inside looks like or the foundation (many are brick). Using MLS photos is a joke, as real estate agents don’t take photos of defects. A buyer gets a seller’s disclosure statement for that information. I would be more comfortable if someone used an app that was set up to take specific photos, do floor plan, etc. At least I would have some independent photos.

Data Collectors: Appraisers vs. Uber Drivers

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  Fannie and state regulators, appraiser inspection training, real estate market, unusual homes, mortgage origination

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NAR Appraiser Survey July, 2023

By on September 15, 2023   /   adjustments, ADUs, AMCs, appraisal how to, Fannie, non-lender appraisals   /   Leave a comment
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NAR Appraiser Survey July, 2023

In July 2023, NAR Research conducted a survey of all 9,800 appraiser members and 50,000 randomly-selected residential-focused non-appraiser members.

The survey results had a comparison of 2022 and 2023, which was very interesting.

  • Appraiser Topics
  • Greatest challenges in business
  • Lesser challenges with business
  • Valuations
  • Comfort with valuation tools
  • Radius in which appraisals are conducted
  • Radius by area type (rural, small town, urban, resort, suburban)
  • How often asked to conduct appraisals outside geographic area/Property type of expertise

Sample: Greatest challenges in business

(AMCs) in general among their greatest challenges. This year, this option was broken into three separate AMC-related issues. Forty-four percent cite at least one of these, with 28 percent specifically citing AMC requests for revisions.

This year, however, the single greatest challenge, cited by almost half (47 percent), is “fee pressures,” which, based on comments, is also related in many cases to pressure from AMCs. This is up sharply from 27 percent last year.

One-quarter (26 percent) cite technology fees (not an option in 2022). Appraisers are less likely this year to cite expanding regulations/interpretations of regulations, lender requirements, pressure from real estate agents/brokers, and liability concerns.

The 21 percent who cite other challenges are most likely to cite lack of business/slow market, rising interest rates, low fees, and to reiterate pressure from AMCs.

A very good graphic is included for each section.

To read the report, click here

My comments: Read the appraiser sections in the long report. Fortunately, appraiser results are in the first section. I read the full survey. Most of the questions were for all NAR members, both appraisers and non-appraiser members. Some may be of interest to you. Much of the appraiser results were what we already sort of suspected, but it is good to see actual survey results.

NAR Appraisal Survey 2022

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  GSE Appraisal Independence Update, Private money lender appraials, ADUs, adjustments, unusual homes, mortgage origination

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