25 Common Errors in Appraisal Reports
- Not stating the report option utilized.
- Not providing enough analysis for the intended user or reader to understand the report properly.
- Inconsistencies between the description of the subject property in the improvements section and the photographs, sketch, sales comparison grid, and other areas in the report.
- Inappropriate use of boilerplate commentary in the appraisal report to describe the neighborhood or to explain the reconciliation of the sales comparison approach.
- Failure to summarize the support and rationale that supports the highest and best use opinion.
- Not complying with the most current USPAP.
- Failure to explain the exclusion of the cost and or income approaches.
What is “retirement” for appraisers?Appraisal Business Tips
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What’s The Size of Your Driveway?

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How to Respond to a Reconsideration of Value (ROV) Request
2-16-17 Newz .Land surveys in 1784 .Common appraisal errors
The First Appraisal – About 3,200 Years Ago
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Is There a Market Correction on Its Way?
by Steven W. Vehmeier
Excerpt: When will the market correction arrive?
I have no idea, but there will be warning signs, and that’s what this blog article is about. Fluctuations in market activity are common, but unseasonal and ongoing changes of any of the signs listed below can often be red flags. Additional indicators can be some of the factors that led up to the last market bust; there are plenty of articles online with which to familiarize yourself.
What will be the early signs?
Some early warning signs of housing market correction are:
A) Listing inventory in MLS starts to climb steadily. Increasing inventory is generally a sign that buyers have stopped buying (due to prices being too high or a lack of consumer confidence), or there are just fewer ready, willing, and able buyers in the marketplace.
B) Days on Market for listings increase. This event is usually linked to item (A) above.
C) Listing prices begin to stabilize, and reductions in listing prices become more common, which is a sign the market is becoming saturated…
So many appraisers missed the early signs in the last boom’s bust that resulted in claims (valid or not) of over-valuations followed by lawsuits, E&O insurance claims, and regulatory disciplinary actions. Maybe this time, we should pay closer attention to the indicators…
To read lots more tips, click here
My comments: Most Excellent list of what to look for. Very comprehensive. I have been appraising during many up and down cycles in Northern California, starting in the late 1970s at 2%+ per month, followed by a crash in 1980 when interest rates went up to 15%+. Those were the days when lenders told appraisers not to make time adjustments!! Even though we don’t like the 1004mc, it forced lenders and appraisers to look at price changes.
No one knows when the increasing market peaks, but there are signs of a decline, listed in the blog post above. I sold my house in March 2008 and did not anticipate the market crash a few months later. I was very lucky. There had been some modest price declines for about 6 months previously.
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What’s Location Got to Do with It?
By Steven W. Vehmeier
Excerpts: We’ve all heard the old mantra that real estate is all about “location, location, location.” A perfect example of the importance of location in appraising can be found in The Villages in central Florida.
The development called “The Villages” has seventy-eight communities, each called a “village,” ranging in size from 100 to around 1,500 homes in each. In total, there are somewhere around 140,000 residents, and the home prices in these individual villages range from the low one-hundred thousand up to a couple million. In some cases, villages located near and/or adjacent to each other can vary significantly in price….
An appraiser not familiar with The Villages could easily over-or under-value a property by mixing villages. For example, let’s say the subject is a 3-bedroom, 2-bath, 2,000 square foot home with a two-car garage on a typical sized lot. It would not be hard to find hundreds of homes with similar physical characteristics nearby; however, some might be located in the “wrong” village…
Can we apply this “village” concept to other areas? Are there typically many villages or neighborhoods in and around most major cities? Do the same principles apply in comparable selection and resultant values? Of course, they do!
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My comments: Very interesting “case study.” Tim Andersen soon will have two articles on neighborhoods and what USPAP says in Appraisal Today monthly newsletters.
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Top Ways to Defend Your Work When the Appraised Value Comes in Under Sales Price
Watch out for drainage problems when doing your appraisals!!
When I first heard about the collapse of the Florida condo tower, I immediately thought about a drainage problem. Previous engineering reports revealed the problems – pool leaks, water not draining properly, etc. The condo building was constructed before building codes were changed to help avoid their problem. No one knows why the building started collapsing. Drainage Problems Can Damage Foundations
Limestone is under all of Florida. In parts of South Florida, the porous limestone is not good for foundations as there is less soil covering the limestone. I have seen many videos of saltwater intrusion flooding streets. The water came up through the limestone, caused by sea-level rise.
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I always check for any drainage problems at homes. They are relatively easy to spot and can cause significant damage. I appraise many hillside homes, which can easily have problems. I look at where the gutter water drains and how it is moved away from the foundation. Sloping floors are another indication of possible foundation problems.
When I go into an unfinished basement, I look for water problems. One good indication is that everything is raised from the floor. Also, water stains on the lower part of the concrete. The water is coming through the foundation. A sump pump can help.
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Properties I have appraised with obvious drainage problems:
– 2 story home on a hillside. Saw radiating cracks inside on both floors in the same corner. At the corner outside of the home was a small round drainage catchment about 1 ft. in diameter, without a way to drain it away from the house. The water came through the rear of the foundation because there was no drainage system.
– Home on a hillside that was moving down the hill. Standing water under the house. Unlevel floors. Big foundation cracks. Known area of problems. Relocation appraisal with two appraisers. The other appraiser did not mention anything.
Note: A good fix for hillside homes is a “french drain” in the ground that takes the water to the sides of the home, with plastic pipe to keep the water from the sides of the foundation.
– Duplex I own on a mostly level site. Tenants mentioned water coming inside the garage on one side. They had moved everything near that side of the garage off the floor. Both units were on level ground with raised foundations. The front garage was on a slight downslope. I replaced the gutters and drains so the water drained away from the foundation. I regularly check for any problems during the winter rains. No foundation damage, fortunately.
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To read an excellent article on how and why concrete fails, Click here.
Modern concrete lifespan is roughly 50-100 years. The Florida condo building is 40 years old. “Concrete is poured around steel rebar, which gives it tensile strength. But tiny cracks — found in all concrete — cause water to start rusting the steel, which then expands, cracking the concrete.”
“Photos of the Surfside basement taken before the collapse show steel rebar breaking all the way through the concrete to the point at which it is fully exposed to the salty and humid Florida air.”
We definitely have a significant infrastructure problem. Replacing concrete is very expensive: building foundations, bridges, freeways, etc.
I have watched several documentaries about what happens if there are no humans to maintain buildings, roads, bridges, etc. The roofs fail first, and water comes inside. Concrete and steel are damaged by water. Roads break down. Bridges collapse. When doing appraisals, I always tell the owners to be sure their roof does not leak. When they see stains in the ceilings, the roof has already started leaking.
The Infamous History of Zoning in the Housing Industry (Video)
Excerpts: History of zoning in the housing industry and how past practices shape the problems we are currently experienced today.
What was the purpose of zoning in the very beginning? How exactly were these practices harmful to people of color? What are some of the problems we see today because of this? These questions and much more will be answered.
To watch the video, click here
My comment: A controversial topic. Today this often involves “downzoning,” allowing for properties to have more than one unit or more density – apartments, condos and townhomes.
Experts Say Zoning Changes Are Most Effective Path to Boost Housing Supply for a More-Balanced Market
Excerpt: A Zillow survey of economists and other real estate experts finds high costs are expected to slow construction and may lower homeownership among today’s 30-somethings. Relaxing zoning rules is what the panel says would be most productive to increase new housing supply.
Other ways include:
- Ease the land subdivision process for landowners
- Relax local review regulations for projects of a certain size
- Accelerate adoption of new construction technologies (e.g., modular building, 3D printing of certain components)
To read more, including details and the full list of survey suggestions, click here
Zoning in the Appraisal Process
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Has Appraising Failed the Public Good?
by Steven R. Smith, MSREA, MAI, SRA
Excerpts: The term Public Good is in the opening paragraph of the Uniform Standards of Professional Appraisal Practice (USPAP). An appraiser friend once wrote that our regulations and guidelines are intentionally ambiguous—and that may be. But what is crystal clear to me is that the industry has put the interests of its clients before the public good.
The Public Trust statement and the Ethics Rule have been largely ignored over the years with loan production put first…
What can an individual appraiser do to support the public good, even before they start an assignment? For me, the answer always has been to appraise the client and the appraisal assignment. There are some clients and assignments that simply should be avoided because of the wants, needs and desires of the client, with respect to the assignment results.
To read more, click here
My comments: I have known Steve Smith for a long time. To read more comments from Steve and other savvy appraisers, join the National Appraisers Forum, an email discussion group. I have been a member since it started. It is my “go-to” resource for appraisal topics. Moderated. Very different from Facebook and other appraiser online discussion groups where filling out forms and dealing with AMCs are discussed.
The future of residential appraising
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