Finding Comps with Few Sales for Appraisers

By on March 7, 2025   /   adjustments, AMCs, appraisal business, Appraisal fees, Economic analysis, Trump Changes   /   Leave a comment
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Newz: Pulling Comps in 2025, Appraiser Union? AMCs Overcharging Consumers

March 7, 2025

  • What’s in This Newsletter (In Order, Scroll Down)
  • LIA ad: Problem with An Affidavit
  • The struggle of pulling comps in 2025 By Ryan Lundquist
  • Op-Ed: Why An Appraiser Union Would Never Work By Dustin Harris
  • The Full Measure: February 2025 Housing Market Snapshot for Appraisers By Kevin Hecht
  • The Trump Administration’s Regulatory Overhaul: The Impact on CFPB, FHA, and the Housing Industry By Rob Chrisman
  • Homebuilders Warn of Rising Building Costs as Trump’s Tariffs on Canada and Mexico Take Effect By NAR
  • AMCs Overcharging Consumers? Morgan & Morgan Investigates
  • Mortgage applications decreased 1.2 percent from one week earlier

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The struggle of pulling comps in 2025

By Ryan Lundquist

Excerpts:

1) SALES TELL US ABOUT THE PAST

Comps aren’t easy today. The problem is there aren’t that many sales, so it’s not so simple to figure out value. Lately, I’ve been getting a ton of questions about this, so I wanted to share some things I’m doing on my end….

2) TWO OPTIONS TODAY

We have two choices for comps. Go back further in time in the immediate neighborhood, or go out further to competitive areas. Why not do both?…

3) HOW FAR AWAY CAN YOU GO FOR COMPS?

It’s not how far you can go, but where you should go. Read that again. This is true in any market. And where would buyers go for comps? That’s also a viable question. No matter where you’re getting comps, be sure they are a good substitution…

To read lots more plus see graphs and read appraiser comments, Click Here

My comments: Read This Article! Few sales are common in many areas. I prefer going back in time. I have been doing time adjustments since 1975, when prices were going up 5% per month in a semi-rural Northern California county. The GSEs seem to be making it way more complicated. I do them on every appraisal. If not needed, I always comment that the market is stable. It is the only adjustment I make on my non-lender appraisals, except for features that are unusual.

I have no idea why the GSEs complain that many appraisers are not doing them when needed. Maybe the appraisers never learned how? Many dollar adjustments are needed on the grid and can be much more difficult than time adjustments.

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Appraisers: Advice On Staying Current

By on February 28, 2025   /   AMCs, appraisal, appraisal how to   /   Leave a comment
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Newz: AMCs Fee Skimming Lawsuit, Appraising a Hobbit Hole

February 28, 2025

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

  • LIA ad: Disclosing Identity of Complaining Party
  • On Staying Current By Timothy Andersen, MAI
  • Futuristic $177 Million Bel-Air Megamansion With Its Own Private Jazz Club Hits All the Right Notes
  • Appraising a Hobbit Hole: The Property Value of Bag End
  • AMCs Deceptive Fee Skimming Exposed in Lawsuit
  • The 10 Most Expensive Home Listings and Home Sales in the U.S.
  • February 21, 2025
  • Mortgage applications decreased 1.2 percent from one week earlier

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On Staying Current

By Timothy Andersen, MAI

Excerpts: In this monograph, we discuss the absolute necessity of developing more than one skill set as part of becoming a competent and professional real estate appraiser.

Real estate appraising is a complex practice that requires a diverse range of skills and knowledge, from understanding current market conditions to understanding and interpreting complex legal and financial documents. If you want to be your own boss, it also requires business acumen.

At its core, real estate appraising involves the due diligence necessary to form a credible opinion of the market value of a particular property. This requires a deep understanding of the appraiser’s local real estate market, as well as of the physical, legal, and economic factors that influence property values in it. However, becoming a successful real estate appraiser requires more than mere market knowledge.

It also requires a range of other skills, including the ability to conduct thorough research, analyze mountains of data, communicate persuasively and effectively with and to other professionals, and manage complex projects. These are all aspects of being an appraiser they do not teach us in appraisal school.

Most importantly, successful appraisers must adapt to changing market conditions and trends. Currently there are so many of these ongoing, especially as the GSEs are about to inaugurate UAD-2 to replace their archaic appraisal reporting forms. This means continually learning and developing new skills to stay ahead of the curve.

To read more, Click Here

My comments: Good analysis of appraising. I have been appraising for 50 years and I still love it. I am easily bored, but every property is different and market conditions change regularly where I work. I am always learning something new.

If this seems overwhelming to you or other post-licensing appraisers, it is not your fault. Unfortunately, after licensing started many trainees hired other trainees. Almost all had poor training and classes. I was unable to refer wannabes to professional associations as they only wanted classes for members, not for new appraiser. Changing what you learned when you started is very difficult to do. I was very fortunate as I started before licensing and had very active local chapters of AIREA and SREA predecessors of the Appraisal Institute. The appraisers I met had lots of experience. They helped me whenever I had any questions. I learned how to lender appraisals plus many types of non-lender appraisals correctly from them.

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The Sales Comparison Approach in Appraisals

By on January 24, 2025   /   AMCs, appraisal how to, state appraiser regulators, Trump Changes   /   Leave a comment
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Newz: Shadowy AMC Fees, State Board Complaints, Borrower Questions

January 24, 2025

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

  • LIA AD: Borrower Wants Answers Appraiser Can’t Give
  • The Sales Comparison Approach: A Cornerstone of Real Estate Appraisal
  • Waterfront Home in Boca Raton, FL $25,000,000
  • Metrics – What Poetry and Data Analysis Have in Common
  • The Shadowy AMC Fees Draining Billions from Homebuyers
  • Why Report a State Board Investigation or Complaint?
  • Trump signs executive order to reduce housing costs, but will it work?
  • Mortgage applications increased 0.1 percent from one week earlier

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The Sales Comparison Approach: A Cornerstone of Real Estate Appraisal

By Kevin Hecht

Excerpts: For experienced real estate appraisers, the sales comparison approach is more than just a method — it is a reflection of their expertise and competency in the marketplace. By mastering this approach and staying informed about industry standards and technological advancements, appraisers can ensure that their work meets the highest standards of professionalism and accuracy.

Challenges and Best Practices

While the sales comparison approach is a powerful tool, it is not without challenges. Appraisers may encounter situations where there is a lack of recent sales data or where the subject property is unique. In such cases, appraisers must exercise judgment and creativity to develop credible results.

Some common challenges include:

Inadequate Market Data: In markets with limited sales activity, finding comparable properties can be difficult. Appraisers may need to expand their search geographically or consider older sales, making appropriate adjustments for time.

Dissimilar Comparables: When the subject property has unique features, it may be challenging to find truly comparable sales. Appraisers must carefully analyze and adjust for these differences.

Unsupported Adjustments: Adjustments must be based on market evidence. Unsupported or arbitrary adjustments can undermine the credibility of the appraisal.

To overcome these challenges, appraisers should:

  • Conduct thorough market research to identify the best available comparables.
  • Use both quantitative and qualitative analysis to support adjustments.
  • Document their reasoning and methodology clearly in the appraisal report.

To read more, Click Here

My comments: Good reminders of the Sales Comparison Approach.

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Waterfront Home in Boca Raton, FL $25,000,000

Excerpts: 12 bedrooms, 11 baths, 12,709 sq.ft., 0.53 Acres, Built in 2016

Direct Intracoastal Point Lot with 256 ft of Waterfrontage and .53 Acres. Built of John Ross/ ROSSCO Const, the beauty of the lot is that it is sited on an expansive Nautical turn of the Intracoastal so it captures the gorgeous long North views.

There are 2 staircases, one with Marble & tile work by a Canadian Artist and banister designed by a metal artist and the owner, the other is a tree staircase The best part is you do not have to climb down the stairs as there is a hand crafted wooden Dragon Slide from the second floor to the foyer. The central slide seen from the front door is artizanally made from oak by local artist. The observation deck (covered) offers stunning views of the Intracoastal, and it includes another outside shower, and solar panels.

In the middle there is a 20 sitting Norse carved table with Helga and Magnus dragons protecting it. There are tile murals, stained glass windows and ceiling paintings all over the house, also thematic. The kitchen is dedicated to the Elements of Air and a story of its power is depicted on its ceiling.

To see the listing and 209 Photos, Click Here

My comments: Thanks to Joe Lynch for this listing with very colorful exterior and interiors!

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Q4 2024 Fannie Appraiser Update

By on December 27, 2024   /   AMCs, appraisal, appraisal waivers, Fannie, george dell, Mortgage interest rates, waivers   /   Leave a comment
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Newz: Q4 Fannie Appraiser Update, 2025 Mortgage Rates Forecasts Are Now Wrong

December 27, 2025

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

  • LIA ad: Disclosing Identity of Complaining Party
  • Q4 2024 Fannie Mae Appraiser Update
  • Dramatic Concrete-and-Glass Santa Monica CA Masterpiece Designed by Famed Architect Ray Kappe Lists for $4 Million
  • Is Ethics a Spiritual Principle By George Dell, SRA, MAI, ASA, CRE
  • All those 2025 mortgage rates forecasts are now wrong
  • The New Con: Hybrids, Waivers & AMCs Threaten Public Trust
  • MBA: No data released until January 2, 2025

CHANGE THE YEAR ON YOUR TEMPLATES NOW TO 2025!
DON’T WAIT UNTIL AFTER 1/1/25!

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Mortgage forecast – loans predicted to drop 30% in 2014

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Appraiser Humor

By on December 20, 2024   /   AMCs, data, humor, liability   /   Leave a comment
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Newz: Appraiser Humor, Data Cancer In Comps,
AMC Panel “Requirements”

December 20, 2025

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

  • LIA ad: AMC Panel “Requirements”
  • 12 Days of Appraiser Christmas
  • Santa’s House returns to Zillow with new ‘Let Santa Know You Moved’ feature
  • The Town Where Santa’s Sleigh Is a Surf Boat in Mooloolaba Australia
  • You Are Not a Business Owner!

  • Data Cancer In Your Comps

  • Mortgage applications decreased 0.7 percent from one week earlier

 

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12 Days of Appraiser Christmas

NOTE on video: Click on image and it opens in Youtube.

Very funny!! 3.5 minute video

Here are two of the days: 8 mega mansions, 5 REOs

Many thanks to Gary F. Kristensen, SRA, ASA, AGA at A Quality Appraisals in Portland, Oregon.

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Market Trends and Market Conditions Adjustments Appraisals

By on December 6, 2024   /   adjustments, AMCs, appraisal how to, state appraiser regulators, waivers   /   Leave a comment
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Newz: GSE New Market Conditions Policy, State Board Complaints, Waivers

December 6, 2024

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

  • LIA ad – Navigating Value Revisions in Appraisals
  • Market Trends and Market Conditions Adjustments.
  • A Ferrari Inspired Masterpiece With 20K square Feet of Luxury Resort Amenities Listed at 55 Million in Delray Beach FL
  • November 2024 Real Estate Market Update By Kevin Hecht
  • 5 Tips to Handle Appraisal Board Complaints
  • Correcting the Record: Accurate Group’s Commitment to Compliance and Industry Excellence
  • FHFA’s Massive Expansion of Appraisal Waivers: What It Really Means
  • Mortgage applications increased 2.8 percent from one week earlier

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Market Trends and Market Conditions Adjustments

Working through the new Market Conditions policy and advisory from Fannie Mae

By Ken Dicks

Excerpts: Did Fannie Mae just throw a wrench into how residential appraisal reports for mortgage transactions are completed with their recent announcement on Market Conditions?

As an appraiser, it is highly likely at some point you will see the following or a similar request soon after your appraisal is submitted to your client, or even months after your appraisal is accepted by your client: Please provide support for your market conditions adjustment conclusions.

Appraisal Quality Control and Appraisal Quality Assurance create a revision request minefield filled with Lender and Investor tailored appraisal reporting requirements and preferences. Review of the appraisal reports is required by the lender or whoever the lender chooses to delegate this requirement to (i.e. Appraisal Desk, AMC, etc.).

As a practicing appraiser, the announcement and accompanying exhibit prompted a series of questions in my mind.

  • Does Fannie Mae want to see this specific graph in all appraisals?
  • What does USPAP say?
  • What level of data and analysis does an appraiser need to present when providing support for market conditions adjustments?

The following is where I have arrived at developing answers:…

To read more, Click Here

My comments: Worth reading the full article, plus the appraiser comments.

I am so glad I have not done any GSE appraisals since 2008! I don’t care what the GSEs say. I comply with USPAP. Of course, I always make market adjustments on my residential appraisals or explain why no adjustments was needed. It is the only dollar adjustment I make on non-lender forms unless the subject has an unusual feature requiring research and analysis.

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10 Appraisal Myths

By on November 29, 2024   /   AI, appraisal, appraisal business, Appraisal fees, appraisal management company, Economic analysis, future, Highest and Best Use, liability, retirement, ROVs   /   Leave a comment
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Newz: 10 Appraisal Myths, AMCs – Appraiser Ripoffs –  AMC Junk Fees

November 29, 2024

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

  • LIA – Intended Use and User
  • Don’t Fall for These 10 Real Estate Appraisal Myths
  • Extraordinary 4-Story Megamansion With Rooftop Putting Green and 2 Pools Lists for $78 Million
  • Now What? On a New Trump Administration
  • Outrage Over Connect by ValueLink’s New Monthly “Junk Fee”
  • Mortgage applications increased 6.3 percent from one week earlier

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10 Real Estate Appraisal Myths

By Tom Horne

Excerpts: In this week’s post, I dispel some common appraisal myths that have been around for years.

10 Appraisal Myths

Myth #1: All real estate appraisers are the same

Myth #2: Appraisals are the same as the Zillow Zestimate

Myth #3: The appraisal always comes in at the contract price

Myth #4: The appraiser is working for the buyer

Myth #5: Cost always equals value

Myth #6: Comps must be within one mile of the subject property

Myth #7: Agents and appraisers cannot talk

Myth #8: Appraisals and home inspections are the same

Myth #9: Assessed value will equal market value

Myth #10: The “new” appraisal methods are better than the old

To read more, Click Here

My comments: I’m sure you have heard some, or all, of these questions. I have heard them. Read the full post to see the answers you can use.

This blog post is written for newer real estate agents, but a good reminder of what many other people think. For example, when I say I am a real estate appraiser, many people ask if I have any listings. They think I am an agent and don’t know what appraisers do. Unfortunately, that is the main reason appraisers have difficulty when trying to communicate appraisal issues. Few listened to appraisers speaking out about fraud before the 2008 crash. What did we residential lender appraisers get to “fix” the problem? AMCs.

I don’t know why the appraisal associations have never done much to let people know about what appraisers do.

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Appraisers – Protect against Being Sued

By on October 25, 2024   /   AMCs, bias, humor, liability   /   Leave a comment
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Newz: Protect Against Being Sued, DOJ Sues Rocket Mortgage, Solidifi AMC and Appraiser, Scary Places

October 25, 2024

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

  • Dealing with Unhappy Buyers as an Appraiser (LIA ad)
  • Protect Against Any Grounds for Suing an Appraiser with Defensible Reports
  • A Billionaire Built a Cliffside Version of Versailles. Now It’s Asking $108 Million
  • DOJ Sues Rocket Mortgage, Solidifi AMC and appraiser – Bias
  • Halloween: Paranormal/Haunted places where I live and How to find what is near you. You may be surprised!
  • Very funny Halloween appraiser cartoon
  • Ghosts Are Scary, but 95% of Americans Are More Afraid of Home Repairs (2024 Data)
  • How to Avoid Unexpectedly Buying a Haunted House—Because It Could Happen to You
  • 32 of the most haunted places in America
  • White House Ghost Stories
  • Mortgage applications decreased 6.7 percent from one week earlier
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  • Appraisal Business Tips 
    Humor for Appraisers

    Statute of Limitations for Suing an Appraiser

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Protect Against Any Grounds for Suing an Appraiser with Defensible Reports

Excerpts: … appraisers can be sued for several reasons, including negligence, errors and oversight, failure to notice underlying issues, or even fraud. While lawsuits against appraisers can be serious, they are rare when compared to the number of complaints to the state appraisal boards, which are much more commonplace and can also have serious consequences.

Therefore, the best defense for a real estate appraiser against a lawsuit or an appraisal board complaint is an accurate, defensible appraisal report.

Topics include:

1. Why is it important to create a highly defensible appraisal report? Mel Black: Real estate appraisers need to be prepared when the bright spotlight comes shining down on their work. They need to be prepared for issues that arise in a board complaint or civil lawsuit…

2. To ensure their report is defensible, what should real estate appraisers focus on at the beginning of an assignment? MB: There are a number of things to consider at the beginning of an assignment. As an appraiser, you want to look at assignment selection. You want to look at your competency to handle the assignment. You want to make sure you are able to define the problem and create an appropriate scope of work.

3. Once you’ve accepted the assignment, what are some things to focus on when developing the appraisal?

4. While you’re developing the appraisal, how do you find the best comparable sales information to include to ensure it’s highly defensible?

5. How can you prepare your workfile or appraisal report for a question about adjustments for the differences between the comparable and the subject property?

To read lots more about all 8 suggestions, Click Here

My comments: Information in the blog post is from Mel Black, a Certified Residential Appraiser, licensed real estate broker, and a practicing attorney who provides regular counsel on compliance matters and other industry-related law for appraisers and brokerage services, about creating defensible appraisal reports and why they are necessary in fighting legal battles or against appraisal board complaints.

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FHA Appraisal ROV Q&As

By on October 18, 2024   /   ADUs, AMCs, Fannie, FHA, liability, Mortgage interest rates, ROVs, UAD   /   Leave a comment
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Newz: FHA ROVs, Avoiding Court, ADUs and Sq.Ft.

October 18, 2024

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

  • Avoiding Court: A Common Sentiment Among Appraisers By Claudia Gaglione, Esq.,
  • FHA Q&A on ROV Policy
  • One of America’s Biggest Homes Hits the Market for $195 Million
  • UAD/URAR Threat, Opportunity, Confusion, Part 2 By George Dell, MAI, SRA
  • Why didn’t the appraiser add the ADU in the square footage? By Ryan Lundquist
  • Choosing the Right Appraisal Management Companies (AMCs): A Guide for Appraisers
  • Mortgage applications decreased 17.0 percent from one week earlier
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    Appraisal Business Tips 
    Humor for Appraisers

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Q’s and A’s Now Available from Appraisal Review and ROV Industry Briefing Webinar

FHA INFO 2024-70

October 10, 2024

FHA Posts Appraisal Review and Reconsideration of Value Policy

Questions and Answers from Industry Briefing Webinar

Today, the Federal Housing Administration (FHA) posted a questions and answers document that addresses inquiries received from stakeholders regarding FHA’s Mortgagee Letter (ML) 2024-07, Appraisal Review and Reconsideration of Value (ROV), announced in FHA INFO 2024-24 on May 1, 2024.

To prepare mortgagees and other stakeholders for the implementation of the ROV policy, FHA hosted a live webinar on August 8, 2024. During this webinar, FHA subject matter experts briefed participants on the ROV policy and processes and addressed questions submitted prior to and during the webinar. Due to time constraints, not all questions were answered during the webinar; therefore, today’s FHA INFO includes a summary of the questions addressed during the webinar as well as those that were not.

Mortgagees are reminded that while the provisions outlined in ML 2024-07 may be implemented immediately, they must be implemented for FHA case numbers assigned on or after October 31, 2024, as announced in ML 2024-16. Additionally, the technology updates announced in FHA INFO 2024-43, will also be available in FHA Connection (FHAC) beginning October 31, 2024.

The questions and answers and recording of the ROV webinar are available for viewing on HUD’s Single Family Housing Archived Webinars web page.

To read the full Q&As (PDF), Click Here

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Appraiser and Real Estate Agent Communication

By on September 6, 2024   /   AMCs, appraisal, Appraisal fees, Economic analysis, non-lender appraisals   /   Leave a comment
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Newz: Disturbing AMC Violations, Appraiser and Real Estate Agent Communication

September 6, 2024

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

  • Top 10 Things Appraisers Wish Real Estate Agents Understood
  • Divorce Appraisal Red Flags
  • Carmel’s Iconic and Artistic ‘Owl House’ $3,750,000
  • Housing Market Update: August 2024
  • Please! Not Another Highest and Best Use Question?!
  • Appraisal Regulation Compliance Council Exposes Disturbing AMC Violations
  • Mortgage applications increased 1.6 percent from one week earlier

Real Estate Agents and Comparable Sales – Tips for Appraisers

Appraisal Business Tips 

Humor for Appraisers

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Top 10 Things Appraisers Wish Real Estate Agents Understood

McKissock Survey

Excerpts: Survey question: “What’s one thing you wish real estate agents knew about the appraisal process?”

Based on the answers we received, appraisers wish that agents knew the following:

  • The appraisal process is complex and takes time
  • Appraisers do not assign value
  • Appraisers are unbiased and must follow guidelines
  • Appraisers need their input and cooperation
  • How to select appropriate sales comps
  • The importance of providing accurate and detailed info in their listings
  • How to determine correct GLA (gross living area)
  • How renovations and upgrades affect value
  • How to prepare for the appraisal appointment
  • FHA/VA/USDA guidelines

Sample appraiser answers:

“How complex it really is. We don’t just pull numbers out of the air—they are market supported adjustments backed by ‘many angles“

Some brokers regard the appraiser as an adversary, who potentially can ruin their deal and end up without commission. They should learn that the appraiser is neutral and cooperating can be a benefit.”’ of research.”

“Entering an occupied home without agent or home owner present is a liability issue for appraisers—[we] need someone present to observe what we do.”

To read more, Click Here

My comments: Read the blog post and maybe get some good ideas for answering agent questions!

Many years ago a top local agent asked me why I was driving around taking photos. I explained they were similar homes (comps) I may be using in an appraisal. I realized she did not know much about what appraisers do.

When I started my appraisal business in 1986 I did presentations at all the local real estate offices, usually during their marketing meetings. I explained what appraisers do and how agents and appraisers can work together. They liked the information.

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