Basic Requirements For Appraisal Reports (Updated for UAD 3.6)

By on July 31, 2026   /   AMCs, Appraisal fees, GSEs, UAD 3.6   /   Leave a comment
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Newz: 3 Basic Requirements for UAD 3.6 Appraisal Reports, Good Facebook Page – UAD 3.6 Software

July 31, 2026

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

  • LIA AD: Limiting Liability to Third Parties
  • The 3 Basic Requirements for Real Property Appraisal Reports (Updated for UAD 3.6) By Kevin Hecht
  • Bay Area’s wildest house lists at $899K and just hit the market for the first time
  • Am I Being Paranoid, or Is There Another Reason? By Richard Hagar, SRA – GSE data
  • MY AD: Residential appraisal forms from the 1960s to today
  • The Appraisal Fee Lawsuit AMCs Can’t Outrun
  • DATE CORRECTION ON CONFERENCES in last week’s email
  • Excellent Facebook Page for UAD 3.6 Software
  • MBA STATS: Mortgage applications decreased 6.4 percent from one week earlier

 

The 3 Basic Requirements for Real Property Appraisal Reports (Updated for UAD 3.6) By Kevin Hecht, SRA

Excerpts: As a real property appraiser, you rely on appraisal reports to communicate your opinion of value. One of the most important principles in USPAP is also one of the most misunderstood: forms are not reports.

Filling out a form properly and completely does not automatically mean your report is USPAP-compliant. The content of the appraisal report, not its form or format, determines compliance.

That distinction has never mattered more than it does right now.

The static forms appraisers have relied on for decades, including the 1004, 1073, 1025, and 2055, are being retired and replaced by a single, dynamic, data-driven reporting structure.

This shift does not change the three foundational requirements of USPAP Standards Rule 2-1. But it does change how you meet them. Understanding that distinction is critical to your compliance and your credibility in the new reporting environment.

TOPICS

What Are the Three Basic Requirements for an Appraisal Report?

Standards Rule 2-1(a): Clearly, Accurately, and Not Misleading

SR 2-1(a) builds on the ETHICS RULE requirement that your appraisal reports must not be misleading. You satisfy this requirement by making sure you “clearly and accurately set forth the appraisal.”

As the saying goes, you must tell the truth, the whole truth, and nothing but the truth.

Under the legacy form-based system, appraisers added context and explanation through a free-form General Addendum, which provided flexibility when a standard data field did not fully capture the nuances of a particular property or assignment.

Under UAD 3.6, that flexibility is now built directly into the report structure itself through section-specific commentary fields, which keeps all relevant analysis organized and immediately accessible to reviewers.

Standards Rule 2-1(b): Sufficient Information for Intended Users

What changes under UAD 3.6 is where and how you provide that sufficient information

Standards Rule 2-1(c): Disclosing Assumptions, Extraordinary Assumptions, Hypothetical Conditions, and Limiting Conditions

How UAD 3.6 Supports USPAP Compliance

Preparing for UAD 3.6: Practical Steps for Appraisers

To read more, Click Here

My comments: Comprehensive, well written and worth reading.

Read more!! →

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GSEs New Info on Completing UAD 3.6

By on July 3, 2026   /   Appraiser Survey, Freddie, GSEs, UAD 3.6   /   Leave a comment

Newz: GSEs New Info on Completing UAD 3.6,

2026 Appraiser Survey: State of the Profession

July 3, 2026

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

  • LIA AD: Buyer Wants Lower Price to Negotiate
  • 2026 Appraiser Survey: State of the Profession By Isaac Peck, Publisher, WorkingRe
  • Abandoned 1822 Federal-Style Estate That Was Relocated and Then Carefully Rebuilt Hits the Market for $1.6 Million
  • Can (Should) AI Replace Your Office Staff? By Dustin Harris
  • MY AD: UAD 3.6 and the “ Tablet “ Question
  • Fannie/Freddie Job Aids for Completing URARs Using UAD 3.6
  • FHA Updates for QC requirements for Appraisal Field Reviews
  • Mortgage applications increased 0.04 percent from one week earlier

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2026 Appraiser Survey: State of the Profession

By Isaac Peck, Publisher, WorkingRe

Excerpts: Nearly one-third of all practicing appraisers plan to leave the profession within three years. Add the next cohort and roughly half intend to exit within the next five years.

Those are the headline numbers from Working RE‘s 2026 State of the Profession Survey, completed by approximately 1,800 appraisers nationwide in early 2026.

Before the retirement cliff narrative takes hold, consider this: Working RE ran a nearly identical question in its 2016 Future of Appraising Survey. At that time, 33 percent of respondents planned to retire within five years, and more than half within 10 years. Today, a decade later, most of them are still appraising.

The pattern goes back further still. In a 2009 Working RE survey (18 years ago), conducted at the bottom of the financial crisis with over 6,200 respondents, over 53 percent of appraisers said they did not expect to be appraising full-time five years from then. While the profession did see some attrition over the next five years due to the incredibly slow market that followed the 2008 real estate crash, the fallout was nowhere close to 50 percent of the profession, or even 25 percent.

Appraisers consistently overpredict their own demise.

Different This Time?

Working RE spoke with Jim Park, President of the Collateral Risk Network (CRN) and the former Executive Director of the Appraisal Subcommittee, to get his read on the survey findings. Park says the 2026 numbers reflect a genuine inflection point, not a repeat of the false alarms that preceded them.

“This time it’s different,” Park says. “We’ve reached a point where a number of things are happening at the same time. The average age of an appraiser has to be in the range of 60 to 65. That’s retirement age. On top of that, depending on who you talk to, 10 to 25 percent of appraisers could cease doing mortgage work because of UAD 3.6 alone. How many will ultimately adapt to the new form? How many will come back after sitting it out? We’ll see. But I’m more concerned about the lack of new people getting into the business than I am about the people who might leave.”

UAD 3.6: The Readiness Gap

The November 2, 2026 mandatory compliance deadline for UAD 3.6 is roughly four months away. While Working RE‘s survey ended March 15 (three months prior to this publication), even if we account for a rapid ramp up, the data suggests that the profession is not ready.

The Takeaway

Taken together, the 2026 survey describes a profession that is older and more experienced than it has ever been. Appraisers remain skeptical of hybrid products, are divided on credentialing, and approaching one of the most significant form changes in decades largely untrained. The retirement numbers are alarming on their face but unconvincing as a cliff narrative. Working RE‘s own historical data makes that case directly.

What the 2026 data cannot tell us is whether UAD 3.6 will finally push appraisers into retirement in a way that past challenges failed to do.

To read more, Click Here

My comments: Very interesting. Worth reading. Many topics with graphs and other data. The only recent appraiser survey I have seen.

Read more!! →

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Neighborhood Analysis Matters for Appraisers

By on June 27, 2025   /   appraisal how to, GSEs, liability, New URAR   /   Leave a comment
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Newz: Neighborhood Analysis, Death of the Appraisal Clipboard

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

  • LIA AD: Can’t Certify the Work
  • Why Neighborhood Analysis Matters: Avoiding Costly Appraisal Mistakes By Timothy Andersen, MAI
  • See the Churches That Make Divine and Affordable Homes
  • Pulling comps in a softer market By Ryan Lundquist
  • The Future is Now: Fannie Mae and Freddie Mac Announce UAD 3.6 Implementation Timeline and Policy Changes
  • The Death of the Appraisal Clipboard By Tony Pistilli
  • Mortgage applications increased 1.1 percent from one week earlier
Appraisal Neighborhood Analysis

 

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Why Neighborhood Analysis Matters: Avoiding Costly Appraisal Mistakes

By Timothy Andersen, MAI

Excerpts:

Neighborhood analysis is a critical component of real estate appraisal, providing insights into factors that influence property values, risk analysis, and investment decisions. A comprehensive neighborhood analysis involves delineating precise boundaries, understanding property types and architectural styles within those boundaries, assessing land use changes, and evaluating current and future economic trends.

Topics:

  • Defining Neighborhood Boundaries
  • Assessing Neighborhood Characteristics
  • Monitoring Land Use and Development Trends
  • Evaluating Economic Trends

Implications for Appraisers

Neglecting a detailed neighborhood analysis as part of the appraisal can lead to inadequate appraisal reports, potentially resulting in critiques from reviewers or issues with compliance standards (i.e., a state appraisal authority). Appraisers are advised to conduct meticulous neighborhood analyses, ensuring their reports reflect current market conditions and property characteristics accurately.

To read more, Click Here

My comments: Well written and worth reading. Includes references. Defining the neighborhood is critical for all types of appraisals. This article focuses on residential, but the topics apply to commercial and other uses.

The neighborhood is where you first look for comps and do the analyses above. Going to a similar neighborhood for comps may be needed, but can be tricky.

Read more!! →

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Pending Sales for Appraisers

By on May 30, 2025   /   AMCs, appraisal business, appraisal how to, Economic analysis, GSEs, PAVE   /   Leave a comment
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Newz: PAVE Problems, Outdated Mortgage Regulations

May 30, 2025

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

  • LIA ad: Should I Complete this Assignment?
  • Pending Sales May Be Your Secret Weapon To Accurate Listings and Appraisals
  • $3.69 Million ‘Tron’-Inspired Mansion With ’80s Speakeasy and Ferrari-Themed Office
  • The Full Measure: May 2025 Housing Market Recap for Appraisers
  • TEAPOTS Exposed: The PAVE Initiative’s Illusion of Justice
  • Outdated Mortgage Regulations
  • Mortgage applications decreased 1.2 percent from one week earlier

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Pending Sales May Be Your Secret Weapon To Accurate Listings and Appraisals

Excerpts: Bottom line: Pending sales show you what’s happening now and where prices are headed. Skip them, and you’re stuck looking at yesterday instead of today.

Closed Sales Lag—Pendings Lead

The Built‑In Delay

  • A March 1 contract might not close until late April. By then:
  • Rates could move 50–75 basis points.
  • A new round of housing inventory could hit the market.
  • Economic news—jobs reports and inflation scares can spook buyers.

Appraiser’s View: How We Use Pending Sales (Even When We’re Handcuffed to Closings)

Time adjustments

Compare contract prices to 30‑60‑day‑old closings to justify ± market‑trend tweaks. If pendings are 3 % higher, you can show upward pressure — great ammo for your list price.

Feature bracketing

No pool comps closed? A pool home pending $25 k higher becomes my clue. Helps you price premium features correctly.

To read more, Click Here

My comments: Good discussion of many aspects of using pendings. Written for real estate agents, but many good tips for appraisers. I always look at pendings, including the ratio of pendings to listings. I got some good ideas from this blog post.  I have been appraising for 50 years. I like learning something new!

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$3.69 Million ‘Tron’-Inspired Mansion With ’80s Speakeasy and Ferrari-Themed Office

Excerpts: 3 bedrooms, 3.5 baths, 4,853 sq.ft., 8,509 sq.ft. lot

Futuristic, three-bedroom mansion that was inspired by the hit 2010 sci-fi movie “Tron: Legacy” has made a high-speed return to the market in Dallas, where it is listed for $3.69 million.

The decked-out dwelling, which also boasts an auto showroom in the living room and a Ferrari-themed home office, has been driven right to the top of the week’s most popular home’s list, after pulling in a huge amount of interest from buyers thanks to its very unique aesthetic.

Opulence abounds in every room of the property, which is spread across 4,853 square feet and includes a 1980s speakeasy with “turquoise tufted walls,” as well as a dramatic two-story living room with soaring ceilings.

To see the listing with 40 photos and a virtual tour, Click Here

My comments: See the wild interior photos with Ferraris and many unusual features!

Read more!! →

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Comparable Sales for Appraisals

By on May 23, 2025   /   AMCs, appraisal, appraisal how to, Fannie, GSEs, liability   /   Leave a comment

Newz: Curiosity and Appraisers, GSEs future, Sideline AMCs

May 23, 2025

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

  • LIA AD: Your Role as a Judge’s Appraiser
  • On Comparable Sales By Timothy Andersen, MAI
  • Futurist Architect’s Funky Spaceship-Inspired ‘Starcastle’ Hits the Market in Connecticut for $1.5 Million
  • Why Curiosity Matters in Appraisals
  • Mortgage Bankers Association head addresses ‘elephant in the room’
  • Bye Bye AMC: A Script to Sideline Appraisal Middlemen
  • Mortgage applications decreased 5.1 percent from one week earlier

Real Estate Agents and Comparable Sales – Tips for Appraisers

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On Comparable Sales

By Timothy Andersen, MAI

Excerpts: This short article raises issues related to what constitutes or defines a comparable sale. While it may seem arrogant to take on a topic of this import, it is necessary, since there is not currently a formal definition. There are descriptions of what a comparable sale is. But there is no formal, universally recognized definition¹. However, does there need to be? Do we have enough technical information to understand the concept of a comparable sale? This article suggests the descriptions are sufficient.

It is common for the GSEs to criticize appraisers’ poor choice of comps. Under some conditions, the GSEs’ have the justification to level these critiques. Yet, given the wealth of descriptions there are in the available literature about what constitutes a comparable sale, why do appraisers ignore those descriptions to their own peril?

To read more, Click Here

My comments: Good analysis by Tim, The USPAP Expert. GSEs vs. USPAP goes on and on. I hate it when GSEs tell me how to do my appraisals. I am so glad I quit working for them in 2005. Non-lender appraisals rarely have special requirements and reviews.

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Surplus vs. Excess Land for Appraisers

By on May 2, 2025   /   Economic analysis, GSEs, liability, Mortgage interest rates, New URAR   /   Leave a comment
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Newz: Surplus vs. Excess Land, Interest Rate Drop? GSE Oversight?

May 2, 2025

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

  • LIA ad: Am I Still on the ‘Do Not Use’ List?
  • Surplus Land vs. Excess Land: What Appraisers Needs to Know
  • 5 Mind-Boggling Optical Illusion Houses That Have To Be Seen To Be Believed
  • Fed officials offer differing signals on timing of potential interest rate cuts
  • Fed seen cutting policy rate by a full percentage point this year
  • The Balancing Act: How Appraisers Can Navigate Supply Shortages, Interest Rates, and Tariffs
  • A Cry from the Appraisal Trenches: The Fall of GSE Oversight
  • Mortgage applications decreased 4.2 percent from one week earlier

Surplus vs. Excess Land for Appraisals

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

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

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Surplus Land vs. Excess Land: What Appraisers Needs to Know

By Kevin Hecht

Excerpts: Land valuation is a fundamental aspect of real estate appraisal, influencing property transactions, development decisions, and investment strategies. A key part of the process involves distinguishing between the land that supports the property’s current use and any additional land that may—or may not—have independent value.

Commonly, a square footage adjustment is made based on lot size differences among comparable properties without one key distinction – whether the difference in land is surplus or excess land. This fails to consider whether the extra land has value independent of the subject property.

Surplus land and excess land are often confused. Surplus land is land which adds no value independently of the property being appraised. Excess land, on the other hand, has value because it can be divided and sold separately. These distinct differences must be accounted for in an appraisal.

Here we will discuss what constitute excess and surplus land, common methods used to identify each, and why it matters….

Methods for Identifying Surplus vs. Excess Land

Residential appraisers commonly make a dollar per square foot adjustment for differences in lot size among comparable properties without distinguishing whether the land is surplus or excess. The problem with this approach is that it fails to consider highest and best use where excess land—land that can be independently sold or valued—creates a premium.

This question cannot be answered without evaluating zoning and legal restrictions of the property.

For example, just because a property is large enough to support a second structure, zoning may prohibit multiple residences on a single lot or there may be legal restrictions in terms of land coverage and minimum square footage requirements. If this were the case, it would be considered surplus land.

When determining if land is excess land, appraisers must consider legal permissibility, physical possibility, financial feasibility, and profitability.

To read more, Click Here

My comments: Read this blog post. Residential appraisers can easily make a mistake on this topic and get into trouble.

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5 Mind-Boggling Optical Illusion Houses That Have To Be Seen To Be Believed

Excerpts: Photo above info:

2. 8198 Uphill Rd, Joshua Tree, CA

Price: $17,950,000

The Invisible House: This mirrored mansion is the brainchild of film producer Chris Hanley and Frank Gehry collaborator Tomas Osinski, who designed the home to seemingly vanish into its desert surroundings.

At first glance, you might not notice the 5,470-square-foot residence staring back at you. Nestled on 67.5 acres, the shimmering structure was created with the intent of connecting its residents with the desert through the mirrored glass exterior. The three-bedroom estate’s interior is just as astonishing featuring retractable glass walls; a 100-foot, heated indoor swimming pool; and a 224-square-foot, white wall designed for movie screenings.

Whether you are looking for a home that quite literally disappears into the Arizona desert or one that mirrors its landscape in the Hamptons, these works of jaw-dropping art not only offer a captivating design but a remarkable setting.

From California to New York, we found five optical illusion abodes that will leave you wondering if they are playing tricks on your eyes.

To read more, Click Here

My comments: Click on the addresses for the listing. I have written about some of these before. I am fascinated by these types of homes. Now you can see 5 of them in one link. My favorite is the home in the photo above.

Read more!! →

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Manufactured Home Appraisals

By on April 11, 2025   /   appraisal how to, GSEs, HOME INSURANCE, liability, New URAR   /   Leave a comment
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Newz: Appraisal Cartoon, Manufactured Homes,
Homes Lacking Insurance

NOTICE: Our Email was down from April 3 – April 9.

Our apologies for any bounced emails.

April 11, 2025

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

  • LIA ad Protecting My Appraisal Report
  • Appraising Manufactured Homes – What Fannie Says, Demographics
  • The Vermont Earth Home, the Dome Home, the Vermont Mud Hut…
  • Very funny appraisal cartoon – Magician Explains Time Adjustments!
  • How Many U.S. Homes Lack Insurance?
  • What Are the Appraiser Independence Requirements?
  • Mortgage applications increased 20.0 percent from one week earlier

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Appraising Manufactured Homes – What Fannie Says, Demographics

Excerpts: MH Advantage is an innovative homeownership option that pairs affordable financing with specially designated manufactured housing features typical of site-built homes.

Completing an MH Advantage appraisal requires the knowledge and experience to fully understand the unique construction process of this type of manufactured home. Appraisers must know the manufacturers’ and federal, state, and local requirements for both construction and installation.

The requirements for an MH Advantage appraisal are similar to the requirements for a standard manufactured home. Featured differences include:

Appraisers must include photos of the HUD Data Plate, HUD Certification Labels, and MH Advantage Sticker as well as the driveways, sidewalks, and detached structures located on the site.

To read more, Click Here

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Manufactured Homes: An Alternative Means of Housing Supply – Demographics

Excerpts: Manufactured homes play a measurable role in the U.S. housing market by providing an affordable supply option for millions of households. According to the American Housing Survey (AHS), there are 7.2 million occupied manufactured homes in the U.S., representing 5.4% of total occupied housing and a source of affordable housing, in particular, for rural and lower income households.

Given that most manufactured homes were produced in the 1990s, a significant portion of the existing manufactured home stock — approximately 72.2% — was built before 2000. Consequently, 7.7% of these homes are classified as inadequate compared to 5% of all homes nationwide. About 2% are considered severely inadequate and exhibit “major deficiencies, such as exposed wiring, lack of electricity, missing hot or cold running water, or the absence of heating or cooling systems”. However, with proper maintenance, manufactured homes can be as durable as site-built homes.

The East South Central division (Alabama, Kentucky, Mississippi and Tennessee) have the highest concentration of manufactured homes, representing 9.3% of total occupied housing. The Mountain region follows with 8.5%, while the South Atlantic region holds 7.7%.

To read more and see excellent illustrations, Click Here

My comments: If you live in an area with manufactured homes, these two articles can help.

In my urban area I have appraised a few homes built in cities where there were very few manufactured homes.  In some areas there are many more. My brother lived in a semi-rural area, north of San Francisco. A while ago there was a major fire destroying many homes. Owners who wanted a quick rebuild, chose manufactured homes. They were allowed on many of the parcels for many years.

Read more!! →

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Appraisers and Firearms

By on April 4, 2025   /   appraisal business, Appraisal Institute, Economic analysis, GSEs, humor, New URAR   /   Leave a comment
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Newz: Appraisers and Firearms,Future of Home Finance and GSEs, Q1 2025 Fannie Mae Appraiser Update – New URAR

April 4, 2025

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

  • LIA ad: A Family Feud and Intended Use
  • Experiences with Firearms as an Appraiser: When Tenants Behave Unexpectedly in “Their Area”
  • Billionaire Opendoor Founder’s Three-Winged ‘Propeller Home’ Hits the Market for $40 Million
  • Appraisal Institute Scandal – Widespread Fraud Uncovered
  • Housing Market Shows Early Signs of Spring By Kevin Hecht, SRA
  • Reshaping Home Finance: The Future of Fannie Mae, Freddie Mac, and U.S. Mortgage Policy By Rob Chrisman
  • Originator jobs; Stated income loans; DOGE shifts its attention; Fannie lawsuit; clear path for rates By Rob Chrisman
  • Q1 2025 Fannie Mae Appraiser Update! – New UAD Sample Reports and Ratings, Time Adjustments
  • Mortgage applications decreased 1.6 percent from one week earlier

 

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Experiences with Firearms as an Appraiser: When Tenants Behave Unexpectedly in “Their Area”

Excerpts: Appraisers often find themselves in a wide variety of settings and situations. I mean, we are entering people’s homes, somewhere that most people see as their comfort zones and a place they are not open to having a stranger poke around in. We as professionals understand this and usually try to make it as quick and painless as possible. There are those moments where it turns into a “memorable experience” and homeowners or tenants feel like they must make it known we are not welcome.

I personally am batting .1000 this year on multi-family properties, where tenants have felt it was necessary for me to get the message, by brandishing a firearm. I will share the following two situations, how I personally managed it, explain why I do not personally carry a concealed firearm, and ask you readers to tell me if this is common or for similar memorable experiences.

For more information and to read the appraiser comments, Click Here

My comments: My first appraisal-related job was with the Monterey (California) County Assessor’s office. It was transitioning to computerized valuation. I was a temporary “appraiser assistant” hired to go to properties to see if the county appraisal records needed updating.

In those days (mid-1970s), properties were reappraised regularly to increase the assessments and property taxes were increased.

I knocked on the door and was met with a man carrying a shotgun. He said: Go away assessor! I don’t remember the city, but it was not in a rural area. I left and told my supervisor to find someone else to do the inspection.

I have never owned a firearm and would never carry one. No one I knew owned a firearm except for my husband, who had firearm training when he was teaching horticulture at a state prison. I would not allow a firearm in our house but still keep a baseball bat by my front door “just in case”.

But, recreational firing at a target was on my “bucket list”. An appraiser friend took me to a local firing range. I tried handguns, rifles and shotguns. Some worked like machine guns with many bullets fired at one time. I really liked it the best. Next time I go to Las Vegas I will try out real machine guns. Trying to hit a target did not appeal to me. Ya never know until you try!

Of course, I have had many encounters with dogs. One was when I was appraising the house of an appraiser I knew. I was met with small dogs biting my ankles. When the owner put the dogs away I continued with the appraisal. Another time, in a rural area, 3 large Dobermans broke down the door of a mobile home and ran toward me. I managed to get in my car. I told the lender to get another appraiser.

When markets crashed I did a lot of foreclosure appraisals. I made a lot of noise opening the door and loudly saying I was an appraiser for the lender and needed to come inside. I never had a problem. But some appraisers requested that a police officer accompany them when the home looked “sketchy” to them from the outside.

Read more!! →

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Appraisal Time Adjustments

By on March 28, 2025   /   adjustments, FHA, GSEs, liability, time adjustments   /   Leave a comment
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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.

To read more, Click Here

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.

Read more!! →

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Appraisal WaIvers Can Be Risky

By on March 21, 2025   /   FHA, GSEs, liability, Mortgage interest rates, waivers   /   Leave a comment
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Newz: Waiver Risks, Appraisal Alleged Bias, FHA Rescinds Multiple Appraisal Related Policies

March 21, 2025

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

  • LIA ad: Appraisal Used in Divorce Case — Now What?
  • The Hidden Risks of Appraisal Waivers: What Homebuyers and Homeowners Need to Know
  • Palm Desert California Home With Its Own Shark Tank Hits the Market for $59 Million
  • Relocation Appraisals: The Power of Market Analysis
  • NFHA (National Fair Housing Alliance) Rescinds Multiple Appraisal Related Policies Funding Dries Up. Appraiser lawsuit.
  • Fannie, Freddie board shakeups bring conservatorship exit closer to reality
  • FHA Rescinds Multiple Appraisal Related Policies
  • Federal Reserve leaves rates unchanged. Two rate cuts may be coming this year.
  • MBA – Mortgage applications decreased 6.2 percent from one week earlier

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The Hidden Risks of Appraisal Waivers: What Homebuyers and Homeowners Need to Know

March 4, 2025 By Tom Horn

Excerpts: Imagine this: You’re buying a home, and your lender offers you an appraisal waiver. You’re told this will save time, reduce hassle, and even cut costs. It sounds like a great deal, right? But what if I told you that skipping the appraisal could lead to overpaying for your home, financial headaches down the road, and even market distortions that could affect entire neighborhoods?

6 Reason You May Not Want an Appraisal Waiver

1. You Might Overpay for the Property

2. Refinancing or Selling Could Become a Problem. Even if overpaying doesn’t seem like a big deal at the time of purchase, it can come back to haunt you when it’s time to refinance or sell.

3. Hidden Property Condition Issues Could Go Undetected

4. Appraisal Waivers Contribute to “Data Cancer” in the Housing Market. What is Data Cancer? “Data cancer” is a term used to describe the gradual corruption of real estate valuation data due to repeated reliance on flawed or incomplete information.

5. You Lose a Key Protection Against Market Volatility. A professional appraisal acts as a check and balance in the homebuying process. Without it, buyers are left vulnerable to shifting market conditions.

6. 6. Lenders Benefit More Than You Do. Appraisal waivers aren’t offered to help buyers—they’re offered to help lenders.

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My comments: Worth reading. The first article I have seen showing why appraisal waivers can be bad for borrowers. Appraisal waivers are increasing. Per the GSEs they save borrowers money on appraisal fees.

When the new URAR is required starting in late 2026, waivers will have much more data from appraisals to allow waiver use increase by the GSEs

Read more!! →

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