Time Adjustment Changes for Appraisers

By on April 25, 2025   /   appraisal business, Appraisal Subcomitee, ASC, New URAR, time adjustments   /   Leave a comment
Tags: , , , ,

Newz: Time Adjustments, 2025 ASC Appraiser Data Analysis, Fannie Fraud

April 25, 2025

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

  • LIA ad – Weather Impact
  • I Went Down to the Crossroads – Time Adjustments By Tim Andersen, MAI
  • Occidental Treehouse Named California’s Most Wish-Listed Airbnb
  • Analysis of 2025 ASC Appraisal License Data By Chase Pursley
  • Fannie Mae Fraud and Abuse Exposed By Jeremy Bagott, MAI
  • Appraiser Growth and Profitability: Key Things to Focus On By Isaac Peck, Publisher
  • Mortgage applications decreased 12.7 percent from one week earlier

————————————————————————————————

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

—————————————————————————————-

I Went Down to the Crossroads

Time Adjustments

By Tim Andersen, MAI

Excerpts: Is real estate appraisal, with the issue of more detailed time adjustments, at another cross roads now? In the past, appraisers simply smoothed changes in sales prices over time by measuring prices as of January 1st, then again as of December 31st. If they went up an average of six percent (6%) annually, then the appraiser made a one-half percent adjustment each month.

This protocol inflates prices at six percent (6%) per year, true. But it does not reflect the fact that for the first three quarters of the year prices may have increased at twelve percent (12%) per year, then in the last quarter went flat with a zero percent (0%) price change.

In this example, consider that a comparable sale going under contract at the beginning of the fourth quarter of the year would merit no time adjustment whatsoever. Nevertheless, the appraiser using the smoothing technique will adjust that sale upward at one-half percent per month over a time span when the market is actually flat. That appraiser is merely filling forms, not appraising. How so?

To read more, Click Here

My comments: Very good article on the “new” time adjustment techniques. Interesting music analysis and how it applies to appraising.

—————————————————————————————-

Occidental Treehouse Named California’s Most Wish-Listed Airbnb

Excerpts: Nestled among towering redwoods in western Sonoma County, the Spectacular Spyglass Treehouse in Occidental has earned the title of California’s most wish-listed Airbnb, part of the vacation rental platform’s roundup of top-trending stays in each U.S. state.

Perched high in the forest canopy, the Spyglass Treehouse — designed and built by Artistree Home — offers guests the rare chance to sleep among the redwoods without sacrificing luxury.

The one-bedroom retreat features a king-size bed, high-speed Wi-Fi, floor-to-ceiling windows with panoramic forest views, a cedar hot tub and an indoor infrared sauna.

To read more, Click Here

My comments: A cabin near the redwoods was one of the first places I lived after moving to San Francisco from Oklahoma in 1968. I became fascinated with redwoods. Very close to my cabin was a small redwood grove. I used to go there and lie down to watch the trees. Later I traveled and saw redwoods that were much larger. I am now living about 5 miles from redwood groves to visit

Read more!! →

Back to Top

Appraisal Time Adjustments

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

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

———————————————————————————————

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

——————————————————————————–

—————————————————–

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!! →

Back to Top

Appraisal ADU Price Per Sq.Ft.?

By on February 14, 2025   /   ADUs, climate change, liability, Mortgage interest rates, time adjustments   /   Leave a comment
Tags: , , ,

Newz: ADU Price per Sq.ft.? Time Adjustments Insanity

February 14, 2025

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

  • LIA AD: Divorce – no interior access allowed
  • Should accessory dwellings be valued at the same price per square foot? By Ryan Lundquist
  • $4 Million Midcentury Modern ‘Casita’ Complete With a Wacky Circular Kitchen in Rancho Mirage, CA
  • Time Insanity, Part 7 of a 12 part series: GSE Guidelines Time Adjustments
  • The irony of replacing appraisers with technology By Tony Pistilli
  • Home Values To Plunge in ‘Climate Abandonment’ Zones Total loss of property value projected to reach $1.47 trillion
  • Mortgage applications increased 2.3 percent from one week earlier

——————————————————————————-

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

——————————————————-

Should accessory dwellings be valued at the same price per square foot?

By Ryan Lundquist, February 4, 2025

Excerpts: Should accessory dwelling units be valued at the same price per square foot as the main house? This question came up recently, and many people believe the price per sq ft of the house should simply extend to the ADU. This post isn’t targeted at any one person, but I have a different perspective that I’d like to share.

Comps

When we look at comps with an ADU, do we see a value that resembles anywhere close to what the ADU equation above suggests? In other words, if the house was worth $800,000 and we added a 750 sq ft ADU, would that really add $200,000 in value? Or would a 400 sq ft ADU on a $450,000 house really add $163,640 in value?

What do the comps say? That’s the question we ask about solar panels, a kitchen remodel, a new driveway, or a house with an ADU. I find looking to the comps can sound like a very frustrating solution, but the focus is really simple. What are buyers willing to pay? That’s always the question.

Closing thoughts

I realize there are situations where the appraised value of an ADU legitimately comes in too low, and there is no excusing that. So, just as I recommend caution in using an arbitrary math formula, appraisers need to be careful to not just pick a number that doesn’t make any sense when we think about data and the income being produced by the ADU.

All I’m saying is the ideal is to scour comps, do our best to discover value, and support the value in whatever credible way we can. And my concern is if listings are priced without consideration of comps or data, it could result in properties not selling and/or appraisal issues in the future. Know what I’m saying?

To read more, including over 40 comments, Click Here

My comments: Read the article. Good examples, tables and graphs, but too long to put in this newsletter.

Read more!! →

Back to Top

Construction Code Violations and Expertise Appraisals

By on January 3, 2025   /   appraisal business, appraisal how to, climate risk, humor, Mortgage interest rates, time adjustments   /   Leave a comment
Tags: , , , , , , ,

Newz: Appraiser Humor, Mortgage Rate Changes, New GSE Time Analysis

January 3, 2025

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

  • LIA – Code Violations and Expertise
  • Mortgage Rate History Since 1971 What about 2025?
  • Hurricane-Proof $600K Dome Home on Florida’s Space Coast
  • Lyle Radke of Fannie Mae with George Dell, SRA, MAI, ASA, CRE to discuss upcoming changes by the GSEs on Time Analysis
  • Backers of most U.S. mortgages (GSEs) have done little about climate risks
  • Top Ten Reasons Why It Is Great to be an Appraiser – Humor
  • Mortgage applications decreased 21.9 percent from two weeks earlier

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

—————————————————————–

————————————————————–

Mortgage Rate History Since 1971 What about 2025?

Excerpts: For many homebuyers, the last few years have felt like a perfect storm of challenges—soaring home prices and climbing mortgage rates colliding to limit affordability. It’s left many wondering if 2025 will finally calm the waters. Will rates dip low enough to bring some relief, or is another wave of increases on the horizon? While there’s no magic compass to navigate these market shifts, a look back at mortgage rate history can offer clues—and maybe even some hope for those waiting to make their move.

Despite the Federal Reserve’s 25-basis-point rate cut in November, mortgage rates have remained in the high 6% range, offering limited relief to borrowers. However, optimism persists in the market as many believe rates could continue to ease in the months ahead, potentially sparking renewed interest among buyers and homeowners.

While the history of mortgage rates provides valuable context, it’s important to recognize that average mortgage rates are just a benchmark. Borrowers with healthy credit profiles and strong finances often get mortgage rates well below the industry norm.

Current rates are more than double their all-time low of 2.65% (reached in January 2021). But if we take a step back and look at the history of mortgage rates, they’re still close to the historic average since 1971 of 7.73%

To read more and see the graphs and many links to more info, Click Here

Read more!! →

Back to Top

New URAR For Appraisals

By on November 8, 2024   /   appraisal, appraisal modernization, Economic analysis, GSEs, lender appraisals, liability, New URAR, time adjustments   /   Leave a comment
Tags: , , , ,

Newz: New URAR, GSEs Update Appraisal Market Areas Requirements, Lender Redlining

November 8, 2024

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

  • Claudia Says: Navigating Value Revisions in Appraisals

  • The New URAR: Embracing New Beginnings

  • $19.8 Million Cape Cod Estate Next to Kennedy Family’s Famed Hyannis Port Compound Hits the Market

  • CFPB and Justice Department Take Action Against Fairway for Redlining Black Neighborhoods in Birmingham, Alabama

  • October 2024 Real Estate Market Update: A Balancing Act of Hope and Hurdles

  • What can we expect for the future of the appraisal and the country?

  • GSEs Update Appraisal Market Area Requirements

  • Mortgage applications decreased 10.8 percent from one week earlier

—————————————————————————————-

The New URAR: Embracing New Beginnings

By Jo Traut

Excerpts:

What’s New with the New URAR?

Think of the new URAR like upgrading from a basic flip phone to a modern smartphone. The old flip phone did its job—making calls and sending texts—but the new smartphone offers so much more. It’s customizable, adaptable to various apps and functions, and streamlines your daily tasks.

Similarly, the new URAR goes beyond a static, one-size-fits-all approach. It’s dynamic and data-driven, tailored to different property types and appraisal assignments, ultimately allowing us as appraisers to provide clearer and more comprehensive reports .

Why the Change?

The existing URAR has been dependable, much like an old-school flip phone. But as technology advances and standards evolve, the mortgage industry requires a more versatile tool. This redesign addresses current inefficiencies, meeting the rising demand for improved reports, as well as enhancing the experience for both appraisers and report readers.

To read more, Click Here

My comments: Read this blog post! Definitely the best practical appraisal advice I have read on new URAR. Includes links to relevant technical details.

No more 30-40 page appraisal SFR reports that is not what GSEs (and most appraisers) wanted. No more outdate “forms” reports that do not change fast enough to accommodate GSE (and USPAP) changes.

Both URAR and UAD acronyms are used in articles and references I have read. I like that the GSEs kept the same name for the reports (formerly “forms”)

URAR – Uniform Residential Appraisal Report

UAD – Uniform Appraisal Dataset

I will be writing more about the new URAR upcoming changes in future issues of this weekly newsletter and my monthly newsletter.

—————————————————–

———————————————————————————–

—————————————————————————————-

$19.8 Million Cape Cod Estate Next to Kennedy Family’s Famed Hyannis Port Compound Hits the Market

Excerpts: 7 bedrooms, 7.5 baths, 9,629 sq.ft. 3 Acre lot, Built in 1914

Adjacent to the famed Kennedy Compound in the exclusive Hyannis Port enclave, the eight-bedroom mansion, known as Port View, has just become available “for the first time in a quarter century,” according to the listing.

The seaside, 9,629-square-foot residence sits right next to the home where President John F. Kennedy and wife Jacqueline Kennedy Onassis famously spent their summers sailing the waters of Nantucket Sound.

Some of the most impressive features found throughout the 26-room estate’s open floor plan include high ceilings, ornate architectural details, an imperial staircase, and six fireplaces.

“The whole interior views to the water,” she said. “It’s like being on a ship with front row ocean views. You are just drawn to it.”

Built in 1914, the Cape Cod mansion has been thoughtfully modernized over the years to retain its historic integrity.

Period details include exposed-beam ceilings and preserved mahogany inlay floors. French doors from the main living and dining areas give way to an enormous patio with waterfront views.

To read more, Click Here

To see the listing, with 28 photos, Click Here

————————————————————————————————————-

CFPB and Justice Department Take Action Against Fairway for Redlining Black Neighborhoods in Birmingham, Alabama

Top mortgage lender to pay a $1.9 million penalty and provide $7 million in loan subsidies

Oct. 15, 2024

Excerpts: Today, the Consumer Financial Protection Bureau (CFPB) and the Justice Department (DOJ) took action to end Fairway Independent Mortgage Corporation’s illegal mortgage lending discrimination against majority-Black neighborhoods in the greater Birmingham, Alabama area. The CFPB and DOJ allege that Fairway illegally redlined Black neighborhoods, including through its marketing and sales actions.

Fairway’s actions discouraged people from applying for mortgage loans in the Birmingham metropolitan area’s Black neighborhoods. If entered by the court, the settlement announced today would require Fairway to pay a $1.9 million civil penalty to the CFPB’s victims relief fund. Fairway would also be required to provide $7 million for a loan subsidy program to offer affordable home purchase, refinance, and home improvement loans in majority-Black neighborhoods.

To read more, Click Here

My comments: How much money did Fairway make vs. what an appraiser makes for an appraisal. More lenders in the news vs. “biased” appraisers!

Read more!! →

Back to Top

Appraisals and Water Frontage

By on June 24, 2022   /   adjustments, desktop appraisals, hybrid appraisals, state appraiser regulators, time adjustments, USPAP   /   Leave a comment
Tags: , , , ,

Appraisals and Water Frontage

Steven W. Vehmeier

Excerpts:

What about an off-site water view?

In a large townhouse-style condominium complex, there were only eight units that had water views. The view was of a section of the Intracoastal Waterway. It was from the second floor only, and over a six-foot high concrete block wall and across an open field. The builder charged more for those units because of the partial view.

My research discovered that the open field had just been purchased by a group that was building a four-level high-and-dry boat storage building. That bit of news made quite a few folks very unhappy and had a distinct impact on the value of those units. The moral of this story is that when you see open land between your subject property and the water, review ownership and the local building and zoning department’s comprehensive land use plan.

Water rights play a major role

With many water fronting properties, the topics of “riparian and/or littoral rights” (and the “prior appropriation doctrine” in the western states) come into play, along with several other issues. Those topics are fodder for other lengthy blog posts all by themselves. Appraisers should familiarize themselves with their state laws regarding water frontage and related rights, as they can vary from state to state.

Among the rights that come with real property ownership is the right to exclude others. When oceans, lakes, bayous, estuaries, rivers, streams, and ponds are involved, this right is a large part of what property purchasers are paying for.

To read more, click here

My comments: Worth reading, especially the last section “Final thoughts on the topic.”

I have lived in my island city for 42 years and had two waterfront homes, with docks, during the first 30 years. Both had many water related issues. One was on a tidal canal and built around 1943. Over time many homes along the waterfront, including mine, had non-permitted structures built over the water. The canal was owned by the state with an unclear easement for building beyond the rear lot line. The property owners asked me to do appraisals on the homes, including the rear structures but did not like my very high fee. It was so complicated the state and the city gave up trying to straighten it out.

The other home, built in 1946, faced a small bay off an outlet to a large part of San Francisco Bay. The large rear part of the lot was owned by the state and the city, which was leased to the homeowner. When the state said they were considering giving public waterfront access along the rear of all the homes unless we paid an annual lease fee, based on the extra lot square footage, we agreed to pay it.

I always wondered what other appraisers thought about these issues. They may not have even recognized or asked about them. Appraisers called very rarely.

I will never forget one of my first house appraisals here. The owner said it had a Bay view but did not mention you had to stand on the toilet to see through the window. After that, I told them the view had to be from a chair that you sat in!

Appraisal Business Tips 

Humor for Appraisers

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

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 Changing real estate market, rate increases, desktop appraisals, USPAP and state boards, unusual homes, mortgage origination stats, etc.

Read more!! →

Back to Top

Market Decline Coming for Appraisals?

By on September 10, 2021   /   appraisal, Appraisal Subcommittee, humor, liability, real estate market, time adjustments, USPAP   /   Leave a comment
Tags: , , , ,

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.

Appraisal Business Tips 

Humor for Appraisers

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

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 liability, Market declining?, Humor, unusual homes, USPAP, mortgage origination stats, etc.

Read more!! →

Back to Top

Location, Location, Location In Appraisals

By on September 3, 2021   /   adjustments, appraisal, appraisal how to, bias, real estate market, time adjustments   /   Leave a comment
Tags: , , , , , ,

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!

To read more, click here

My comments: Very interesting “case study.” Tim Andersen soon will have two articles on neighborhoods and what USPAP says in Appraisal Today monthly newsletters.

Appraisal Business Tips 

Humor for Appraisers

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

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 bedrooms, bias, time adjustments, unusual homes, mortgage origination stats, etc.

Read more!! →

Back to Top