Tips on appraising new construction homes

6 Tips for Appraising New Construction Homes

Excerpts: New construction is treated a little differently by lenders, FHA, and the GSEs. When appraising new construction homes, you must take into consideration certain features and attributes that don’t necessarily apply to re-sales. It requires more work, so you want to be sure that you are charging for your effort. However, perhaps more than that, you want to be sure you’re following the proper protocol. Stick to these best practices to ensure you cover all your bases.

3. Talk to multiple local builders You can gain valuable information from builders—as long as you talk to them now to evaluate current costs and value. Some of the best construction cost data is compiled by you as you complete new construction appraisal assignments. When appraising new proposed construction, the prior data can be reviewed for those construction projects that are most similar to the subject property in quality, size, and features and be used as cost data to support cost estimates for the current appraisal. As the cost of construction materials generally continue to spiral upwards, it may be necessary to adjust for time, depending on how old the cost data is.

To read more tips, click here

My comments: Well written and worth reading. New home construction appraisals can be tricky. I quit doing them a while ago – too many various hassles, but many appraisers like doing them. There are few new homes built in my area, except stacked condos. Land is too expensive.

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NOTE: Please scroll down to read the other topics in this long blog post on VA appraisals, appraisal modernization, eliminate VA panel, unusual homes, mortgage origination stats, etc.


Who Moved My Appraisal Cheese?

By Mark Buhler

Excerpts: If you have ever read or heard about the book titled “Who Moved My Cheese,” you may know the story about the four characters in the book and what the cheese refers to. The cheese is a metaphor for what you want in life or business. The characters all love cheese but are caught in a maze. When the cheese disappears, the four characters are faced with adapting to change. Two of the characters in the book, Scurry and Sniff, are willing to do whatever it takes to find the cheese. The other two characters, Hem and Haw, commiserate and complain that the cheese is gone. The moral of the story is to be quick to adapt to change so that you can experience more success and joy in life.

As an appraiser, I cannot help but make the connection between the characters in the book and appraisers. Complainers like Hem and Haw are abundant in the appraisal world. They are the most vocal amongst us appraisers. Appraisers that are willing to swim upstream and are willing to adapt to change are the survivors of our industry. How many appraisers do you think started out as trainees in a big firm, or worked as a staff appraiser as a newbie, and went out on their own to create their own businesses? Most of the appraisers that identify with Scurry and Sniff, that’s who! This mindset can set an appraiser apart from the appraisers that identify more with Hem and Haw.

The book is a series of lessons that can help appraisers.

To read more, click here

My comments: This book is popular with appraisers, especially when business is slow. The market changing again with increasing interest rates, in the inevitable ups and downs of mortgage lending. Appraisers who adapt will do okay and, more important, be positive and satisfied with appraising. I have always been a glass half full person. For example, I see mistakes as an opportunity to learn how to do better next time. Read this article and the classic book. I have the book on my bookshelf.1960s


‘Prairie House’ in Oklahoma with Swirling Cedar Shingles

Excerpts: The 1960 ‘prairie house’ in Norman, Oklahoma is an important piece of American architecture history. The vision of architect Herb Greene, the abode references everything from primordial creatures to protective shelters and futurist objects, with its curved silhouettes and quirky, wood shingled surfaces.

A feeling of protection is expressed by the sense of an enveloping coat of a mother hen’s ‘hovering over,’ as well as by the cave like interior.

To read more, click here

My comment: Take a Break and Check out the very interesting photos and text!


Lenders See Considerable Value in Appraisal Modernization

By Lyle Radke, Senior Director, Single-Family Collateral Risk

And Justin Alexander

Short with good graphics and easy to read.

Excerpts: To better understand lenders’ views on appraisal modernization, including benefits, implementation challenges, and possible applications, Fannie Mae’s Economic & Strategic Research (ESR) Group surveyed senior mortgage executives in February 2022 using its quarterly Mortgage Lender Sentiment Survey®.

Our survey results reveal a near-consensus opinion that appraisal modernization will help lenders, appraisers, and risk investors assess and manage collateral risk more effectively, while also benefiting consumers via greater appraisal accuracy, lower costs, and increased velocity of loan decisioning. To achieve this vision, industry participants will need to work together to resolve implementation challenges through training and investment in the infrastructure needed to operationalize new solutions.

To read more, click here Short with good graphics and easy to read.

To read more Research details, click here

To see More infographics click here

My comments: Lenders have always wanted faster appraisals with fewer hassles to close their loans faster. Other factors such as consumer cost are much less important, as seen in the stats above.  Full appraisals take too long. Hopefully, there will be a new online “form” for all GSE appraisal reports in 2024. Trying to use the 2005 URAR form is sometimes like trying to put a square peg in a round hole!

The June issue of Appraisal Today (see below) is about what has changed since the 1980s and focuses on the past, present, and future of residential lender appraising.


June 2022 issue is the 30th Anniversary of This Newsletter

Lots of changes over the past 30 years!

What a wild ride it has been!!

Lots of changes over the years. Where are we going?

A look at the past, present, and future!


  • Residential appraisal forms from the 1960s to today
  • Revisiting the Green Hornet, the first appraisal form in the 1960s
  • Computers, Mobile Devices, and Digital Cameras
  • From EDI to UAD – appraisal data standards and data transmission
  • Mortgage lending from the 1870s to today
  • How the Internet changed appraising
  • Present and past appraisal forecasts


To purchase the paid Appraisal Today newsletter go to  or call 800-839-0227.

If you have any comments or info on any topics, please hit the reply button!! I’m always looking for something new ;>


Proposal to Eliminate the VA Fee Panel

Excerpt: On May 18, the Subcommittee on Economic Opportunity held a legislative hearing on the Discussion Draft of H.R. 7735, Improving Access to the VA Home Loan Act of 2022… It would require the VA to consider when an appraisal is unnecessary and when a desktop appraisal should be used and, a move from the VA Fee Panel to a lender select program. Mortgage Bankers Association advocated for the proposal while the Appraisal Institute opposed it.

To read more and watch (or scroll through) the recording of the hearing click here

My comments: One of the appraiser comments: “The VA process is without question the “GOLD STANDARD” of how appraisals should be completed from start to finish.”Don’t miss the 20+ appraiser comments plus the 2-hour video of the Subcommittee meeting. Because of the recent very strong purchase market, using VA for buyers has been more difficult in many areas as VA loans can take longer to close. As rates go up, VA will become more popular.

Of course, lenders want the VA to be the same as all the other mortgage options with waivers, desktops, etc. Then AMCs can take over VA appraisals and turn it into anti-appraiser scope creep, mass emailing of orders shopping for low fees, etc.

I wrote about doing VA appraisals in June 2014 in this newsletter, including how to get on the panel, pluses, and minuses, etc. VA is the best lender client. You are working for the veteran to be sure he or she does not overpay, finds out about problems, etc. You are not working for a lender who just wants to make the loan. Many appraisers told me they would never work for the VA for various reasons. Most really liked working for the VA. I wrote about these, and many other factors, this in my articles. The newsletter issue is posted on my paid subscriber-only web page – scroll down the page.


Rocky Mountain $3.5M Castle in Denver

6,448-square-foot stone castle with eight bedrooms and nine bathrooms. Built with local stone in 1886. “The exterior of the home is 22-inch-thick lava stone,” says Usaj. Local architect William Lang designed the home with a signature three-story. It was listed for $1,575,000 in 2019, Usaj says. The current owners bought it just before the COVID-19 pandemic and updated the kitchens and bathrooms plus critical infrastructure.

To read more and see lots of photos, click here


Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone 510-865-8041


HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to

Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample issue go to or send an email to . Or call 800-839-0227, MTW 7AM to noon, Pacific time.My comments:

Rates are going up. Make money while the market is still good!!


Mortgage applications decreased 1.2 percent from one week earlier

Mortgage applications decreased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 20, 2022.The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week and was 75 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 0 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 16 percent lower than the same week one year ago.“

The 30-year fixed rate declined for the second straight week to 5.46 percent but remains well above what borrowers were used to over the past two years. Most refinance borrowers continue to remain on the sidelines as a result, and refinance applications have fallen in nine of the past 10 weeks. Compared to January 2022, refinance activity is down 66 percent,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Higher mortgage rates are also impacting purchase market conditions, as the purchase index remained close to lows last seen in the spring of 2020 when a significant portion of activity was put on hold due to the onset of the pandemic. Currently, higher rates, low inventory, and high prices are keeping prospective buyers out of the market.

”The refinance share of mortgage activity decreased to 32.3 percent of total applications from 33.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 9.4 percent of total applications.

The FHA share of total applications increased to 11.3 percent from 11.1 percent the week prior. The VA share of total applications decreased to 10.4 percent from 10.5 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.46 percent from 5.49 percent, with points decreasing to 0.60 from 0.74 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $647,200) decreased to 5.02 percent from 5.03 percent, with points decreasing to 0.41 from 0.61 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 5.36 percent from 5.32 percent, with points increasing to 0.82 from 0.71 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.72 percent from 4.73 percent, with points decreasing to 0.70 from 0.82 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 4.49 percent from 4.42 percent, with points increasing to 0.76 from 0.73 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, and thrifts. Base period and value for all indexes is March 16, 1990=100


Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone 510-865-8041

So Many Appraisal Cost Approach Questions

So Many Appraisal Cost Approach Questions!
So Few Answers! Such Low Fees!

By Tim Andersen, MAI

Excerpt: It is clear most appraisers do not like to do the Cost approach. Generally, we are not too familiar with it. So, it is clear that most appraisers, because of this, do not appreciate the deep analytical power the Cost approach really has. So Many Appraisal Cost Approach Questions!

Therefore, I’m going to ask you 10 questions on the Cost approach (and stuff related to it). After you’ve finished reading them, you probably will still not like to tackle the Cost approach. Nevertheless, you just may have a better understanding of, and appreciation for, its powerful analytical capacities.

First Question: On the 1004 form is the indication that Fannie Mae does not require the Cost Approach to Value. Where does the form instruct the appraiser not to complete the analytics of the Cost approach?

To read the other questions and answers click here

My comment: Appraisers, including myself, seem to have a love/hate relationship with the Cost Approach. But, it can be useful. Tim’s much longer article “But Fannie Mae says I don’t have to do the Cost Approach!!” will be in the September issue of the paid Appraisal Today.

Appraisal Process Challenges(Opens in a new browser tab)

Which Appraisal Clients are used the most?(Opens in a new browser tab)

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Strange Appraisal Terms

Excerpts: Since space is the only place that is pandemic free, I thought it would be fun to try to apply space and science fiction terms to real estate. Let’s take a little break from the stressful atmosphere we are experiencing here on earth and have a little fun. Perhaps you can think of more.

Here are two:

Orbit– The path homeowners take whilst following the appraiser around the home, trying not to follow too closely by maintaining at least six feet of distance. (Probably taking pictures of the appraiser in the PPE)

Blackhole – The place where Zestimates go after being debunked by reality.

To read and see lots more Strange Appraisal Terms, click here.

My comment: I love Jamie Owens’ blog posts! Unbelievably creative!! Plus, outstanding/strange videos, animated gifs, etc. etc. I have been a big SciFi fan since high school and used space videos in my experimental music band for many years.

More Appraisal Humor

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7 Things to Watch in your Appraisal Market

Seven things to watch in real estate during a pandemic

April 14, 2020 By Ryan Lundquist


1) Listings: We often think about listings increasing as a way to see the market changing, but right now many markets across the country are seeing fewer new listings. So at times change is best seen with less of something rather than more. It’s not a surprise to see fewer new properties during a pandemic, right?…

7) Prices: In real estate we are so obsessed with prices, but that’s really the last place to look to see the market. What I mean is change happens first in the areas above before showing up in sales stats a couple months down the road. In short, for now the slower pandemic trend hasn’t infiltrated sales price figures as of yet in Sacramento. This doesn’t mean the market is stable in every price range and location. All I’m saying is regional and county stats don’t show price declines right now. Normally I pull monthly price data, but I’ve switched to weekly in order to see the trend sooner rather than later.

To see the other 4 factors plus lotsa graphs and many appraiser comments , click here

Appraisal Humor

Appraisal business tips

Pandemic and market for buyers and sellers: Appraisals(Opens in a new browser tab)

Very, very funny appraisal video!!(Opens in a new browser tab)

To read about lots more appraisal topics, continue reading below!

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Covid humor for appraisers

Fun video – Take a 3 minute break!

One Day More – A Quarantined Broadway LipSync

Fantastic!! Made me smile. Regular people.

Many thanks to John Regan, a long time subscriber and big opera fan!

To watch click here

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at

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Covid-19 and appraisals. March 20 2020

March 20, 2020

There are many, many issues which seems to be changing on a daily basis. I wrote this yesterday. There have already been changes I am sure. I am including links to relevant information below

The big refi boom is causing lots of desperate lenders and AMCs trying to find appraisers.

You don’t need more info on keeping safe as it is available all over. What I discuss today is shift from interior inspections to drivebys, forms, what lenders are saying, what real estate agents are doing, the market changes (maybe), liability, etc.

What are lenders and AMCs doing?

Some direct lenders, such as Citibank, are sending out emails about what they recommend. On the other side AMCs are acting like nothing has happened and sending out email blast low fee appraisal request. FYI, it is a lot easier for one lender to change. AMCs work for many lenders.

Info on what Citibank is recommending from VaCAP:

Many are fearful exterior only appraisals will be the end of the traditional appraisal as we know it. Right or wrong, exterior only appraisals are a possibility that may be acceptable in certain situations. VaCAP does not believe it will end traditional appraisals with interior inspections. The profession has been down this road before. It will not fly long term, especially if the market turns downward.

Some lenders are establishing COVID-19 protocols to follow and some have remained quiet on the subject. There are rumors that one lender has instructed appraisers not to inquire as the health of the occupants of the home due to privacy laws. Others like Citibank have developed their own protocol on how appraisers should handle COVID-19 concerns. There is great flexibility to the appraiser. See Citibank’s protocol below:

Worth reading. To read more, click here

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at

Appraiser Recovers From COVID-19

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What is “retirement” for appraisers?

Appraising in Retirement

by Isaac Peck

Excerpt: According to the Appraisal Institute’s latest Valuation Professional Factsheet (Dec. 2018), over 70 percent of all licensed or credentialed appraisers across the U.S. are over 50 years old, with over 20 percent being over 66 years old. As appraiser demographics continue to shift older and grayer, some within the industry have predicted sharp declines in the number of practicing appraisers as they begin to retire. However, as the numbers show, appraising appears to be an optimal career to continue part time, in retirement.

Melvyn Wolf, a Certified Residential appraiser, licensed in Illinois and Wisconsin, is one such appraiser. Born in 1942, Wolf is 77 years old and has been a real estate appraiser for 33 years. He says he will continue appraising as long as he is physically fit and in good health. Here’s his story.

To read more, click here


My comments: The July 2018 issue of Appraisal Today had my article: “Retirement for fee appraisers: when, why, and lots of options”. I discussed when to take social security, fixed costs, burnout, spouse retirement, etc. Also, for self employed people what does retirement mean? For appraisers, including myself, often you gradually cut back on appraisals. I am 76 and started Social Security at age 70. It is currently $3,470 per month and 85% taxable. It goes on top of my business income and puts me in a high marginal tax rate. I can’t cut back easily on my newsletter business, so I do fewer appraisals. What is “retirement” for appraisers?


What is “retirement” for appraisers??

An Appraiser’s Full Circle

By Mike Foil

Excerpt: A couple of years ago, I asked my brother who had just closed his business, “How do you know when you are done and it’s time to retire?” He answered, “When it is time, you will know.”

There are considerations: health, finances, what to do, and the passion you still have for appraising. I’m turning 70 in a few months and enjoy good health. We see a path financially without the need for appraisal fees; however, having just received payment for the last file in accounts receivable did put a stamp of finality on the decision. I have ‘projects’ to work on: thinning trees and brush on four acres I want to split into three building sites, writing a study on “The Salvation of the Soul,” and family time (wife, kids, and 16 grandkids). As for my passion for appraising, it is gone.

To read more, click here

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

Appraiser retirement plans?(Opens in a new browser tab)

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7 Ways to Not to Choose Appraisal Comps

By Tom Horn

Excerpt: Here are three of the topics:

1) I’m taking what I think the home is worth based on the owners estimate and looking for sales in this price range

4) Using higher sales from another neighborhood when there are good sales within my own subdivision

6) Using price per square foot

To find out what Tom says and the other 4 ways, click here

My comment: written for real estate agents, Tom Horn’s primary referral clients, but useful for appraisers. Maybe it will help you explain about comps to agents, or why you did not use the comps they provided. I always take whatever sales and listings the agents have. Sometimes the MLS has it miscoded somehow and I miss it. Or, there is a “pocket” listing that sold but was never listed on the MLS. Also, I never want to miss a sale very close to the subject, if only to mention it and explain why I did not use it!! 7 ways to choose comps gives you some ideas.

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Don’t pick appraisal comps the old way

Are you violating USPAP every day?

If you pick comps the old way, you may be violating USPAP every day!

Excerpts: (In the past) Data was hard to get. I was taught it was only necessary to use only three or four comps. And only a few comps were available. I did learn the importance of bracketing from my trainers (it was nowhere in my appraiser education). I was diligent, and of course, I picked my necessary and available comps carefully. Don’t pick appraisal comps the old way.

Then things changed. No one noticed. MLS came on line. Income properties came online. Public records came online.  All relevant sales became available. Instantly. Without thinking, I ignored the “as available” rule. But stuck to the ‘as necessary’ rule. And heck, everybody used just three comps. In fact, USPAP says I should do what my peers would do. And they all used just three or four.

So, what changed?

Today in most areas, all the sales are available. But are they necessary? Well no. All my peers use just three or four, so it is ok. But what if I want to do more than achieve credible results?

To read more, click here

My comment: I love George’s Most Excellent headlines plus his writings!! His blog posts are short, as they should be. But, sometimes we want to read more. The June issue of the paid Appraisal Today will have his 6-page article: “Old Versus New: Conflict or Opportunity?” about the past, current and future in appraisal analysis. Very interesting!!

Appraisal Business Tips 

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

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Traditionalist, advanced, vocational appraisers. What are you?

What kind of appraiser are you?

By George Dell
Excerpt: Let’s put aside the ‘art’ versus ‘science’ discussion, where the artists say: “No computer will ever replace the appraiser”, or “No amount of education will ever replace experience”. The other side seems a bit confused.  There are traditionalists.  And there are the “advanced” appraisers.  And there are the “vocational” appraisers, who don’t seem to care much about all of this.  They just want to push through as many reports as possible.  The skeptics tend to doubt some of the old theory, as well as some of the “new theory”. Traditionalist, advanced, vocational appraisers. What are you?

My comment: Worth reading. I am a “traditionalist/skeptic”. What are you?

Humor for Appraisers

Covid-19 Residential Appraisers Tips on Staying Safe

For Covid Updates, go to my Covid Science blog at

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

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