Newz: Time Adjustments, Fannie Condo “Blacklist”, Future of GSEs?
March 28, 2025
What’s in This Newsletter (In Order, Scroll Down)
- LIA ad: Navigating Value Revisions
- On Time Adjustments By Timothy Andersen, MAI
- 19.5 Million Arizona Airpark Mansion Boasts Private Jet Hangar, Indoor Shooting Range, and 11 Bathrooms — but Only 3 Bedrooms
- Pulte has no plans to lower conforming loan limits for Fannie and Freddie
- Fannie Mae’s Condo “Blacklist”
- FHA rescinds mortgage appraisal policies aimed at countering bias (update on last week’s newsletter topic)
- Fannie, Freddie face uncertain futures, potential jobs cuts
- Mortgage applications decreased 2.0 percent from one week earlier
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On Time Adjustments
Timothy Andersen, MAI, MSc., CDEI, MNAA
Excerpts: Typically, this time starts when the comparable goes under contract, then ends on the effective date of the appraisal. If the market has measurably changed over that period, that change means the appraiser should market-adjust the comps up- or downward, as the market demands¹.
This analysis reveals yet another dilemma. For example, to conclude prices went up twelve per cent (12%) per year is a simple average increase of one percent per month, or a daily factor of (0.12 ÷ 365 =) 0.000329. This simplistic analysis means that for a sale that went under contract at $400,000 42-days ago, the increase factor would be $400,000 X 0.000329, or an increase of $131.51 times 42-days or $5,523. This rationale is mathematically correct.
But our training must govern here and force us to ask the question, “Does this adjustment protocol reflect current market verities?” If not, then following this protocol is, in effect, to guess at a time adjustment. To guess at the time adjustment is to fail to reflect market trends truly and correctly. To fail to reflect them truly and correctly in the final value opinion is to mislead the client. See the dilemma?
Does USPAP² offer any advice on this issue? No. USPAP does not even use the word adjustment (or any of its derivatives) until AO-13.
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My comments: Good analysis of the current time adjustment issues. Using only an annual increase (Like most of us were trained to do) is not very accurate. Tim writes, teaches USPAP and advises appraisers on how to do better reports. He is a USPAP Expert. Tim is a regular contributor to the monthly Appraisal Today.