Appraisal Regulator Chaos

By on September 5, 2025   /   appraisal, Appraisal Foundation, appraisal how to, appraisal regulations, Appraisal Subcomitee, climate risk, Economic analysis, HOME INSURANCE, liability, real estate market, state appraiser regulators   /   Leave a comment
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Newz: Appraisal Regulator Chaos , Cat and Raccoon Damages, Wildfire Risks

September 5, 2025

What’s in This Newsletter (In Order, Scroll Down)
NOTE: Scroll down to see Appraisal Regulator Chaos

  • LIA AD: Legal Request for Old Appraisal
  • The Kitty Litter Duplex: An Appraisal I Wish to Not Remember
  • $300K Maryland Home Is Overrun by Feral Cats and Raccoons
  • The Full Measure August 2025: Navigating Rates, Inventory, and Affordability
  • Appraisal Regulatory Chaos
  • The Town With No Bank: How Rural America Lost Its Mortgage Lifeline By Dallas T. Kiedrowski, MNAA
  • New Cotality Wildfire Risk Report finds more than 2.6 million homes are exposed to moderate or greater wildfire risk
  • Mortgage applications decreased 1.2 percent from one week earlier
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The Kitty Litter Duplex: An Appraisal I Wish to Not Remember

Excerpts: How one property’s furballs left an unforgettable impression on an apartment and an appraiser

Introduction

In the world of real estate, surprises abound. Industry professionals, especially appraisers, all expect the unexpected, but even the most seasoned professionals can stumble across situations that test the limits of their experience, composure, and their judgement. There are stories of haunted houses, collapsing ceilings, and outlandish tenant actions and decorative choices (Live, Laugh, Love), but the tale of the cat-soiled duplex stands out for its sheer yuck-factor. This is the story of what should be a routine property appraisal, which became cemented in my experience stories, due to its unfathomability and coated in an unmistakable, noxious layer of feline mischief.

The Setting: An Unimposing Duplex with a Dirty Little Secret…

The Appraisal Appointment: An Unforgettable First Impression

…I could only see the flooring in the opening and a few other spots around the living room from about a foot outside the threshold, the rest of the floor was completely caked with cat poop. The walls, ceiling, and windows were all enveloped by heavy spider webs in a variety of states, while some were fresh looking, others clearly blackened from a long life filled with dust, dirt, fur, and of course fecal matter. Also, you could see multiple patches of orange mold scattered throughout the walls and ceiling. I quickly replied I would not be going in there, because it was a danger to my health and safety, which somehow surprised her….

Financial and Health Implications: When Cleanliness Becomes a Value Killer

Hygiene, general maintenance, and property values parallel each other. This may be why we have condition codes for our appraisals. Just saying…. I made sure to thoroughly explain the situation and how the value was determined in the report. I did not want this rolling back downhill and getting me. Luckily, a very gracious Fresno Construction, was able to give me a quote very quickly, which came just over $100,000 for an estimate to redo the unit in its entirety.

Conclusion

The Kitty Litter Unit stands as a testament to both the resilience of a property and the unpredictability investors face. Especially in this case, since it was for an estate of a deceased former owner.

To read more, Click Here

My comments: I appraised a house for a relocation company – one story with 3 bedrooms. There were cats on every surface above the floor, such as dressers, – all staring at me of course. In the rear of the home was a very large cat enclosure. They were rescue cats, temporarily at the home. I did not ask the owner where the cats would go when she relocated – back to the shelter or with go with her.  I will never forget about all those cat eyes staring at me!

I had another relocation appraisal where the male cat had sprayed urine along several walls in the living room. I told the relocation company to replace the drywall.

Of course, I could fill up a book with dog stories. Such as two Dobermans that broke down the door of a trailer to get to me. I somehow made it to my car and I will never forget it. Or the small dogs who bit my ankles as I was trying to get through the front door (home was owned by an appraiser I knew). For both appraisals, I told my lender client to get another appraiser.

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300K Maryland Home Is Overrun by Feral Cats and Raccoons

Excerpts: Studio, 960 sq.ft., 4.86 acre, built in 1906

The value is in the land. Do NOT enter the house under any conditions. It is occupied by feral cats and raccoons. How do they get along? I don’t know. Be careful going on the land. It is at your own risk. The house is a teardown and is falling down, although the roof appears newer. From what we know, there is an outhouse on the property, and the drinking water comes from the stream/spring. We don’t believe there is indoor plumbing.

But where else can you get almost five acres of gorgeous Baltimore County land near streams, the NCR trail, and just steps from Bee Tree Preserve? Bring your vision and your money. Seller makes no representations or warranties to anything regarding this property. Buyer must take on responsibility for all tests, easement research, etc. The Subaru is included.

To read more, Click Here

To read the listing, Click Here

My comments: I don’t even want to think about raccoons coming through a dog door and ransacking my kitchen. I have regular raccoon visits in my back yard at night. Once, a long time ago, I left a full trash bag in the rear yard. I never did that again. They keep coming back at night hoping for something to eat, most recently last week. My cat hisses at them to let me know they are there. I shined a flashlight and made a lot of noise. The raccoon left.

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The Full Measure August 2025: Navigating Rates, Inventory, and Affordability

By Kevin Hecht, Appraiser and Economist

Excerpts: As we move toward the end of summer, the housing market is caught between shifting monetary policy signals, a modest rise in inventory, and the stubborn weight of affordability challenges. For appraisers, this month’s backdrop offers both clarity and caution: there are more comparable sales to analyze, but the quality and timing of those comps matter more than ever.

Prices: The Deceleration Continues

While supply is rising, prices are no longer surging. Median home prices grew just 2% year-over-year in July, according to Realtor.com’s analysis of NAR data (Realtor.com, Aug. 22, 2025). On a seasonally adjusted basis, prices are showing slight month-to-month declines.

This reflects what I’ve called in past editions the “lag trap”: comps from three to six months ago may reflect a very different pricing environment. Case-Shiller data confirm that prices have declined for several consecutive months, illustrating how contract dates and closing dates often lag current market conditions.

Final Thoughts

The national data is useful for context, but as always, the real insight comes from understanding your local market. Ask yourself: how does my region fit into this broader story of easing rates, rising inventory, and affordability pressures? Are buyers showing up in greater numbers, or are they still hesitant despite more listings?

The role of the appraiser is more important than ever in this environment. Our job is not simply to reflect past sales, but to interpret where the market is today and where it may be heading tomorrow.

Stay sharp, stay informed, and remember: in a market this dynamic, being accurate matters far more than being fast.

To read more, Click Here

My comments: Worth reading the full article. What these topics mean for appraisers is very, very helpful. These are the only articles I have seen that say what the trends mean for appraisers.

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In the September, 2025 issue of Appraisal Today

  • The Future of Appraisal Regulation. The Current Regulatory System is Broken
  • Appraisal Regulator “Chaos” Risks Undermining Real Estate Markets
  • The Power to Define Appraisal Rules for U.S. Real Estate Belongs to TAF (The Appraisal Foundation)

Excerpts:

The Power To Define Appraisal Rules For U.S. Real Estate Belongs To TAF. It’s Desperate Not To Lose It.

The Appraisal Foundation (TAF), the governing body for appraisers across

the U.S., has overseen the way property values are determined for more than 30 years. But in recent years it has come under heightened scrutiny about its influence and effectiveness, both from within the ranks of the appraisal industry and among the federal officials who monitor it.

Since 2020, TAF has been the subject of a federal fair housing probe,

doubled its financial assets and sought to exert more control over – and extract more revenue from – appraisal certification material.

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September 2025 issue emailed on Friday, September 2, 2025 please email info@appraisaltoday.com, and we will send it to you. You can also hit the reply button. Be sure to include a comment requesting it.

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The Town With No Bank: How Rural America Lost Its Mortgage Lifeline

By Dallas T. Kiedrowski, MNAA

Excerpts:

For decades, we’ve been told that the problem is demand. That people don’t want to live in rural America anymore. That lending dried up because the buyers disappeared. That it’s just the market working as it should. But what if we’ve been telling the wrong story? Because when you look closely, when you actually follow the data, the decisions, and the people left behind, it turns out rural America didn’t walk away from mortgage credit. Mortgage credit walked away from rural America.

The Collapse of Local Lending

… For rural communities, the S&L crisis was a seismic shift. The number of S&Ls was cut nearly in half between 1987 and 1996 (from about 3,622 to 1,924 institutions). And it wasn’t just S&Ls. A wave of bank consolidations swept through in the aftermath. Larger banks absorbed or out-competed small-town banks, especially after laws in the 1990s removed barriers to interstate banking. The result? Two-thirds of all banking institutions have disappeared since the 1980s, plunging from almost 18,000 banks in 1984 to under 5,000 by 2021. This great shakeout left gaping holes in the financial map of rural America. Today, of the nation’s ~1,980 rural counties, 625 have no locally owned community bank at all, double the number in 1999.

In urban and suburban markets, GSE liquidity fueled massive waves of mortgage origination. It created an entire class of homebuyers, investors, and neighborhoods that didn’t exist before. But in rural America, something strange happened. The capital came. But the loans didn’t.

…Something was getting lost in translation for rural communities. The new mortgage market excelled at making 30-year fixed loans on standard houses in large markets, but it struggled with the realities of rural lending.

The Vanishing Rural Appraisers

At the same time, the appraisal workforce, once largely trained by those local S&L’s, began to disappear. In rural counties across the U.S., there were fewer mentors, fewer apprenticeships, and soon, fewer appraisers altogether. And what happens when you don’t have an appraiser? You don’t have an appraisal. And when you don’t have an appraisal, you don’t have a loan. Without local banks hiring and mentoring new appraisers, the pipeline dried up.

A Vicious Cycle: Less Infrastructure, Less Lending, Fewer Homes

Layer by layer, a structural picture emerges. The collapse of local banks and S&Ls removed the on-the ground infrastructure of lending; the appraisers, the loan officers, the branches, the local knowledge. In its place rose a distant, centralized system that has little incentive to adapt to idiosyncratic rural needs. As that system bypasses many rural borrowers (e.g. rejecting “non-conforming” properties or declining small loans), it further depresses the volume of mortgage lending in those areas.

To read more, Click Here

My comments: I was not aware of this lender problem until I read this article. Comprehensive analysis.

When I worked for an assessor’s office in the late 1970s I appraised many rural properties. No problems. When I started my business in 1986 I worked in the Bay Area and appraised relatively few rural properties.

I used to tell appraisers (before AMCs) that when working in a rural area you had little competition. But now, GSE appraisals are much more difficult in rural areas. Fees are too low.

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New Cotality Wildfire Risk Report finds more than 2.6 million homes are exposed to moderate or greater wildfire risk

Excerpts: Wildfires, once confined to a so-called “wildfire season” are now an ever-present threat, according to a new report published today by Cotality™,a leading global property data and analytics-driven solutions provider. The 2025 Cotality Wildfire Risk Report: Priced Out & Burned Out, finds that more than 2.6 million homes in the Western United States, representing a combined reconstruction cost value of $1.3 trillion, face moderate or greater risk of wildfires, with more than one million of those homes facing very high risk.

Spread across 14 states in the Western United States, nearly half of the homes are in California (1.3 million), with Colorado (319,000), Texas (243,000), Oregon (128,000) and Arizona (124,000) rounding out the top five states with the largest number of homes at risk. These states contain a high number of homes in the Wildland-Urban Interface (WUI) where there is elevated risk due to their proximity to forested or undeveloped areas.

The report also explores the complexities of wildfires by analyzing the Palisades and Eaton fires that occurred in January2025 and resulted in devastating conflagration events. Though both Los Angeles wildfires ignited as conventional wildfires, they transitioned into wildfire-induced conflagration once the fuel shifted from vegetation to the built environment of homes and businesses. The conflagration shift dramatically alters how fires spread and magnifies potential destruction that can occur. Since 2020, wildfire-induced conflagrations have destroyed more than 26,000 structures across the country.

To read more, Click Here

My comments: Insurance coverage is more and more difficult to obtain. In California, the state has special coverage through the FAIR plan, but it is very expensive with coverage limits.

Smoke risks can be substantial. Recently, the East Coast had very bad unhealthy heavy smoke from Canadian wildfires.

Mu city is not in a wildfire area but have been affected by heavy smoke from other areas. A few years ago, there were significant lightning fires about 20 miles away. The sky near me looked like a “Nuclear dawn” in the mornings. Very scary.

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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, Click Here.

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 go to www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.

My comments: Rates are going up and down. We are all waiting for rates to drop in 2025.

Mortgage applications decreased 1.2 percent from one week earlier

WASHINGTON, D.C. (September 3, 2025) — 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 August 29, 2025.

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 3 percent compared with the previous week. The Refinance Index increased 1 percent from the previous week and was 20 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 17 percent higher than the same week one year ago.

“Mortgage rates declined last week, with the 30-year fixed rate decreasing to its lowest level since April to 6.64 percent. However, that was not enough to spark more application activity,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Refinance applications saw a small increase from the previous week, driven by FHA and VA refinance applications, but conventional refinances declined. The FHA rate is averaging about 30 basis points lower than the conventional rate in 2025, which has made those loans relatively more appealing to eligible borrowers. Purchase activity pulled back, after a four-week run of increases, as slower homebuying activity led to declines in applications across the various loan types.”

The refinance share of mortgage activity increased to 46.9 percent of total applications from 45.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.8 percent of total applications.

The FHA share of total applications increased to 19.9 percent from 19.1 percent the week prior. The VA share of total applications increased to 13.8 percent from 13.3 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 ($806,500 or less) decreased to 6.64 percent from 6.69 percent, with points decreasing to 0.59 from 0.60 (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 $806,500) decreased to 6.58 percent from 6.67 percent, with points decreasing to 0.39 from 0.44 (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 decreased to 6.31 percent from 6.35 percent, with points decreasing to 0.74 from 0.80 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.84 percent from 6.03 percent, with points increasing to 0.84 from 0.77 (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 decreased to 5.90 percent from 5.94 percent, with points decreasing to 0.34 from 0.68 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The survey covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels. The survey has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, thrifts, and credit unions. Base period and value for all indexes is March 16, 1990=100.

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Ann O’Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone: 510-865-8041

Email:  ann@appraisaltoday.com

Online: www.appraisaltoday.com

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Appraisal Adjustments

By on August 29, 2025   /   adjustments, appraisal how to, FHA, liability, New URAR, UAD, UAD 3.6, USPAP   /   Leave a comment
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Newz: Appraisal Adjustments, How Freddie and Fannie Inflated Home Prices, FHA to Adopt UAD 3.6

August 29, 2025

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

  • LIA AD Navigating Value Revisions in Appraisals
  • Appraisal Adjustments: Types, Methods, and Cheat Sheet Appraisal By Kevin Hecht
  • Inside Artificial Heart Inventor’s $4.8 Million Midcentury Modern Salt Lake City Utah Home
  • Inflated Prices, Taxed to Death, by Jeremy Bagott
  • Can the direction a home faces affect its value? By Ryan Lundquist
  • The Competence to Perform an Assignment, by Timothy C. Andersen, MAI
  • FHA to adopt UAD 3.6
  • MBA: Mortgage applications decreased 0.5 percent from one week earlier

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Time Adjustment Changes for Appraisers

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Appraisal Adjustments: Types, Methods, and Cheat Sheet Appraisal By Kevin Hecht

Excerpts:

Types of Appraisal Adjustments

Appraisal adjustments can take several forms, depending on the property characteristics being compared. Each type of adjustment addresses a different element that may influence value. Below are descriptions of common adjustment categories and their uses, followed by a “cheat sheet” chart with examples.

  • Qualitative Adjustments
  • Quantitative Adjustments
  • Transactional Adjustments
  • Market Conditions Adjustments
  • Property Adjustments
  • Locational Adjustments

Common Methods for Making Appraisal Adjustments

A long list, from matched paired sales to Cost Analysis

Appraiser Survey: What’s Your Go-To Method for Adjustments?

Paired sales/matched pair analysis (Most popular answer!)

“I typically cover rural areas where sales are scarce and there is not enough data for meaningful statistical analysis to be performed. Due to this, paired sales analysis is the most reasonable and defensible analysis position available.”

“I use linear regression to understand market changes and to calculate any necessary market change adjustments.”

“Depends on what item is being adjusted. If it is site or GLA, it is usually a percentage of the per acre or per square foot sales price. Other items are usually paired sales analysis or consideration for depreciated cost.”

To read more, Click Here

My comments: Comprehensive lists and interesting appraiser comments. I quit doing grid dollar adjustments many years ago. A person from our state regulator, speaking at a local appraisal meeting, said they would require support for all adjustments. I started by doing Plus and Minus grid adjustments and then went to “total property comparison” with a value. I do a qualitative analysis comparing the comps.

The only supported dollar adjustments I make are for market conditions and high dollar features such as a fantastic view of the Golden Gate Bridge from very high up a hill.

Inside Artificial Heart Inventor’s $4.8 Million Midcentury Modern Salt Lake City Utah Home

Excerpts: 4 bedrooms, 4.5 baths, 5,447 sq.ft., 0.55 acre lot, built in 1957

The mastermind behind the one-of-a-kind estate was none other than Swiss architect Eduard Dreier, who brought Bauhaus principles to the modernist movements of Utah and Nevada.

Lovingly restored and awarded the Utah Heritage Award for Restoration and Renovation, this 5, 447 sq ft architectural gem blends timeless Dreier elements-exposed steel beams, walls of glass and cantilevered roof line, granite rock walls-with warm modern luxury. The 1,110 sq ft glass-and-steel attached guest house, designed by Dreier protge Brent Groesbeck in 2016, floats above the main home, expanding living where entertaining is elevated to an art form.

To read more, Click Here

To see the listing with 43 photos and a video tour, Click Here

Read more!! →

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AI and Appraisals – the Future

By on August 1, 2025   /   AI, appraisal how to, liability, non lender appraisals, real estate market   /   1 Comment
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Newz: Future of AI in Appraisals,
Comps in Today’s Market

August 1, 2025

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

  • LIA ad: Code violations and expertise
  • The Future of AI in Real Estate Valuations: Understanding Tomorrow’s Appraisal Standards By Leland Trice
  • New York City’s Famous ‘Bubble House’ Hits the Market for the First Time in 50 Years With an Asking Price of $5.8 Million
  • The problem with comps in today’s housing market By Ryan Lundquist
  • Divorce Appraisal: A Guide for Real Estate Appraisers By Kevin Hecht
  • For sale signs multiply: Inventory hits 5-year high, price cuts surge What’s happening with markets all over the country?
  • Mortgage applications increased 0.8 percent from one week earlier

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The Future of AI in Real Estate Valuations: Understanding Tomorrow’s Appraisal Standards

By Leland Trice

Excerpts: The real estate valuation industry stands at a pivotal moment. After decades of relying on manual processes that are inefficient, error-prone, and costly, we’re witnessing a fundamental shift toward AI and technology enabled solutions that don’t replace human expertise but amplify them.

The future of real estate valuations will likely involve increasing integration of human expertise with artificial intelligence capabilities. This evolution isn’t about replacing professional judgment with automated systems it’s about creating hybrid approaches that leverage the strengths of both human analysis and machine processing.

Opteon’s new AI-powered quality control tool, built in collaboration with technology partner Jaro, illustrates this broader evolution across our industry.

It’s important to clarify a common misconception: AI-powered tools like Intara, don’t replace appraisers or QC functions. Instead, they enable Appraisers to focus on what they do best, expert analysis and decision-making, while automating repetitive, administrative and time-consuming tasks that add little analytical value.

The “magic” of AI is its ability to look holistically at a file. We have moved past the days of checklist data review and can now examine unstructured data and images simultaneously and in conjunction with discrete data points.

A critical factor in successful AI implementation is the flexibility to meet varying requirements. Intara demonstrates this principle by embedding lender-specific criteria into quality control processes, automatically identifying discrepancies, and ensuring consistency before reports reach final review.

To read more, Click Here

My comments: This article sometimes reads as a “marketing promotion”. But, worth reading to see how one company uses AI for appraisals and how it is used.

This article goes way beyond Chat GPT. It shows how custom AI applications can work for appraisals. The author, Leland Trice, is Managing Director at Opteon USA.

New York City’s Famous ‘Bubble House’ Hits the Market for the First Time in 50 Years With an Asking Price of $5.8 Million

Excerpts: 4 bedrooms, 5 baths, 4,763 sq.t. Townhouse

The distinctive bubbly residence has become a somewhat divisive hot spot in its Lenox Hill neighborhood, where it was built in 1969, with architect Maurice Medcalfe transforming a traditional brownstone into the eye-popping modernist masterpiece.

Medcalfe’s unique window design was intended to be “a sculptural interpretation of the classic bay window,” according to reports.

There is plenty to play with in the four-story interior, which boasts 4,736 square feet of space and includes four bedrooms, an office, and five bathrooms that are “all in need of renovation,” according to the listing.

To read the listing with 13 photos Click Here

Read more!! →

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Top 3 Appraiser Mistakes

By on July 25, 2025   /   ADUs, appraisal how to, bias, liability   /   Leave a comment
Tags: , , ,

Newz: Top 3 Appraiser Mistakes, Bias Lawsuit Dismissed, ADUs

July 25, 2025

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

  • LIA ad: Why Do Claims Get Settled?
  • Top 3 Mistakes Appraisers Make in Their Appraisal Reports By Bryan Reynolds
  • Founding Father John Hancock’s Boston Home Is on the Market for First Time in Half a Century — More Than 250 Years After It Was Built
  • Appraiser Vindicated: Lanham Discrimination Lawsuit Dismissed in Maryland
  • A Complete Guide to Geocodes
  • Bipartisan legislation would make it easier to finance accessory dwelling units
  • Mortgage applications increased 0.8 percent from one week earlier

Appraiser Mistakes

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Top 3 Mistakes Appraisers Make in Their Appraisal Reports

By Bryan Reynolds

Excerpts: After doing more than 2,000 appraisal reviews over the years, Bryan and his team have seen these same errors crop up again and again. Know them and avoid them.

I was an investigator for the state of Tennessee for many years. These days, I primarily help appraisers who find themselves in trouble. Sometimes we’re successful in resolving the issue entirely, or at least reducing the impact. Other times, it becomes a learning moment — we recognize mistakes, take responsibility, and strive to do better.

Mistake #1: Omitting a key statement about an extraordinary assumption or hypothetical condition

Appraisers can gain some leeway with the right scope of work, and by properly using extraordinary assumptions and hypothetical conditions. But you must meet minimum reporting requirements.

Mistake #2: Not summarizing the results of your analysis of the subject property’s prior sales

Saying “the subject sold last year for $150,000” is not analysis. That’s just a statement of fact. What USPAP requires is a summary of your analysis. You’ve got to explain what that sale means in the context of your current appraisal, not just list the data point.

Mistake #3: Including comps that aren’t really comparable

The 1004 form, or the Uniform Residential Appraisal Report form, is what most appraisers use. This is a form many of you are very familiar with. At the top of page two, it says:

“There are ___ comparable properties currently offered for sale in the subject’s neighborhood, ranging from ___ to ___.”

“There are ___ comparable sales in the subject’s neighborhood within the past 12 months, ranging from ___ to ___.”

Now, if you truly are in an area where all the listings and sales in a neighborhood are in a competitive state for the same properties, then I guess you’d fill that in accordingly. But how often does that happen? I mean, are the two-bedroom homes competing for the same buyers as the four-bedroom homes?

To read more, Click Here

My comments: Definitely worth reading! I would have never thought these 3 were the most common mistakes.

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Founding Father John Hancock’s Boston Home Is on the Market for First Time in Half a Century — More Than 250 Years After It Was Built

Excerpts: Used as offices now, 7,622 sq.ft., 2,178 sq.ft. lot, Originally built in 1660s

The iconic dwelling, which is known as the Ebenezer Hancock House in honor of John’s younger brother who used it while serving as the deputy paymaster of the Continental Army, is thought to have been built in 1767.

According to the listing, which is held by Dave Killen of LandVest, the building is the “last extant property associated with the founding father in Boston” and stands as a living time capsule, having been meticulously maintained by its current owners over the last five decades.

An asking price for the property has not been released, but the structure was most recently valued at $1.65 million by city officials. Given its historical significance, the building could well sell for much more.

The original structure dates to the 1660’s, when the site was owned and occupied by William Courser, Boston’s first Town Crier. In 1737, the property was owned by James Davenport, the brother-in-law of Benjamin Franklin.

To read more and see many interesting photos, Click Here

My comments: Our country’s 250th anniversary is coming. This is a look into when we started.

Read more!! →

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Exposure Time vs. Marketing Time for Appraisals

By on July 18, 2025   /   appraisal business, appraisal how to, bad appraisers, bias   /   Leave a comment
Tags: , , ,

Newz: HUD and OMB PAVE Rollback, Appraiser Appraisal Capacity, Fraud Alert

July 18, 2025

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

  • LIA ad: Can’t Certify the Work
  • Exposure Time vs. Marketing Time: Why the Clock Matters in Appraisals By Jamie Owen
  • Historic Beachfront Water Tower That Has Been Transformed Into a Sky-High Home in California for $5.5 Million
  • Freddie Mac. Appraiser Capacity
  • HUD and OMB Begin Rollback of PAVE Task Force
  • Fraud Alert: Some Non-QM Lenders Excluding Loans Involving Certain Appraisers, Borrowers
  • Mortgage applications decreased 10.0 percent from one week earlier

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Exposure Time vs. Marketing Time: Why the Clock Matters in Appraisals

By Jamie Owen

Excerpts: Exposure Time: The Clock That Ticks Backward

Imagine standing in the kitchen of a colonial in Gordon Square that just sold last week. The buyers are thrilled, the sellers are relieved, and the agent is probably already on to the following listing. But in that moment, the appraiser has to ask: how long would this house have needed to be on the market to attract a willing buyer and sell at that exact price?

That’s exposure time—the hypothetical time the property was exposed to the open market before the sale, assuming it sold for fair market value.

Appraisers include this estimate to show that the sale wasn’t rushed, distressed, or out of step with the broader market. It’s a way of saying: “This was a typical deal in a typical market, and the sale price reflects that.”

Marketing Time: The Clock That Ticks Forward

Let’s shift the scene. You’re standing in the living room of a Cleveland Heights Tudor, preparing an appraisal for a homeowner who’s thinking about listing soon. They want to know not just what it’s worth today, but how long it might take to se

My comments: Worth reading. Excellent understandable article and graphic above. Good Case Study (A Hypothetical Example). Written for home owners, real estate agents, etc. but a good review for appraisers. This topic can be confusing for appraisers.

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Historic Beachfront Water Tower That Has Been Transformed Into a Sky-High Home in California for $5.5 Million

Excerpts: The historic Seal Beach Water Tower dates to 1892, when it was built to hold water for passing steam engines, a role that it held for nearly 100 years.

In 1985, it was converted into a 2,828-square-foot, single-family residence that quickly became one of the most talked-about dwellings in Seal Beach. The interest appears to be alive and well 40 years later, with the home quickly shooting to the top of the week’s most popular homes list.

History buffs will love the four-bedroom home’s period details, including a vintage tool display “unearthed during the 1940s tribute” and a bedroom “themed after the only known pirate to haunt these shores.”

Other eye-catching updates include a foyer water feature; an elevator and circular staircase for easy access; a compass rose design found in the hardwood floors; a third-floor modern kitchen; a model train “weaving through the rafters”; a fifth-level, open-air rotunda; and a stained-glass cupola.

To read the listing and see 74 photos, Click Here

My comments: Very interesting! Check out the photos. I love the elevator: a long way to the top…

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Highest and Best Use For Appraisers

By on July 11, 2025   /   AMCs, appraisal how to, Appraisal Subcomitee   /   Leave a comment
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Newz: Hidden AMC fees, Appraisal Subcommitee Cutbacks, Highest and Best Use

July 11, 2025

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

    • LIA AD: Borrower Wants Answers Appraiser Can’t Give
    • What is Highest and Best Use in Appraisal? Appraisal
    • By Kevin Hecht
    • Purple Rain! Vibrant Violet Villa That Would Make Prince Proud for $3,499,000
    • Could a Class Action Lawsuit Finally Unbundle Hidden AMC Fees? by Isaac Peck, Publisher WorkingRe
    • The AMC Industry Won’t Be Toppled by Code
    • Appraisal Oversight (ASC) Subcommittee Faces Cuts Amid Leadership Turmoil
    • Mortgage applications increased 9.4 percent from one week earlier

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What is Highest and Best Use in Appraisal?

By Kevin Hecht

Excerpts: When determining property value, one of the most critical concepts in real estate appraisal is highest and best use (HBU). Professional standards require appraisers to develop an opinion of HBU when necessary for credible assignment results. HBU refers to how a property should be used to generate maximum value under specific constraints, not necessarily how it’s currently being used.

Definition of Highest and Best Use

In professional appraisal practice, Highest and Best Use is defined as “the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value” (Appraisal Institute, The Dictionary of Real Estate Appraisal, 2022). This definition emphasizes that HBU must be reasonably probable, not merely possible or speculative.

Appraisers must analyze the property as vacant land, and as improved, considering what is legally permissible, physically possible, financially feasible, and maximally productive in the current market.

Why Highest and Best Use in Appraisal Matters

Highest and Best Use gives stakeholders insight into a property’s worth at its full potential. It guides market value determinations that reflect the property’s full potential and informs development and investment decisions based on feasibility and profitability. Additionally, HBU supports lending and underwriting decisions, especially for construction loans or redevelopment projects, guiding land use planning and zoning analysis in transitioning neighborhoods.

To read more, Click Here

My comments: Well written and understandable. I was trained at an assessor’s office to first determine highest and best use for each property I appraised. For homes, issues I have had were a small house on a large lot where nearby lots were being converted to apartments. More common for homes is a possible lot split. HBU is a regular factor for appraising commercial properties in my city. The main part of the city was almost fully developed by the early 1940s. Often the HBU was not the current use.

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Neighborhood Analysis Matters for Appraisers

By on June 27, 2025   /   appraisal how to, GSEs, liability, New URAR   /   Leave a comment
Tags: , , ,

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.

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What’s a comparable property for appraisals?

By on June 13, 2025   /   appraisal, bias, Fannie, liability, real estate market   /   Leave a comment
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Newz: Q2 Fannie Appraiser Update, Appraiser Wins Discrimination Lawsuit

June, 13, 2025

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

  • LIA ad: Am I Still on the ‘Do Not Use’ List?
  • What’s a comparable property? Or a “comp,” as we say more informally? By Bryan Reynolds
  • Rotterdam’s Yellow Cube Homes
  • Q2 2025 Fannie Mae Appraiser Update – UAD 3.6
  • A Back to the Future Housing Market By Ryan Lundquist
  • Case Dismissed: Ohio Appraiser Wins Discrimination Lawsuit by Isaac Peck
  • Mortgage applications increased 12.5 percent from one week earlier

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Real Estate Agents and Comparable Sales – Tips for Appraisers

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What’s a comparable property? Or a “comp,” as we say more informally?

By Bryan Reynolds

Excerpts: Let me give you an example of an appraisal report I saw recently, which is why I’m asking this question: There are 65 comparable properties currently offered for sale in the subject’s neighborhood, ranging from a price of $330,000 to $5,400,000. The report also states that there are 44 comparable sales in the subject’s neighborhood within the past 12 months, ranging from $152,000 to $2.2 million. That’s a big range. Are you comfortable putting that in your report?

What does the term “comparables” even mean? Let’s go to the authoritative sources. Here’s one: The Dictionary of Real Estate Appraisal, published by the Appraisal Institute. It defines comparables as “a shortened term for similar property sales, rentals, or operating expenses used in the comparison in the valuation process and best usage. The thing being compared should be specified.” In other words, are you looking at comparable sales, comparable rentals, or comparable listings?

Lastly, I’m going to pull up the Encyclopedia of Real Estate Appraising. It’s a great big book, and it has a whole section on this. I highlighted one part of it because I like it: “What is a comparable property? It is one that would be a reasonable alternative for most prospective buyers who would be interested in the subject property.”

What is a comparable property? It is one that would be a reasonable alternative for most prospective buyers who would be interested in the subject property.” —Encyclopedia of Real Estate Appraising

That’s very simple, and it invokes some good, common sense

To read more, Click Here

My comments: Lots of opinions on this topic!

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29008552 – innovative yellow cubic houses built in rotterdam

Rotterdam’s Yellow Cube Homes

Excerpts: Both a popular tourist attraction and a strange architectural experiment, the cluster of 39 homes stands out amongst the city’s mostly modern architecture. However, that is what makes these “cube-perched-on-a-point” homes all the more interesting.

he elevated cubes are essentially houses supported on hexagonal piers; this design frees up the ground space for public use. Each cube measures 72 feet in height with each side measuring 25.5 feet. While the pillars and floor are made from reinforced concrete, structural wooden skeletons from the base for constructing the cubes were mounted on the floors’ edges. Interestingly, cement panels with rockwool insulation in the middle resulted in cutting down on almost all exterior sounds.

Inside, the complicated form meant that the interior walls were angled at 54.7 degrees with the floor. The consequences of this construction detail is that 25% of the almost 1,100-square-feet of living space is unusable because of the angular walls. The interior is divided into three floors that are connected by a narrow wooden staircase. The ground level houses in the living room and an open kitchen with plenty of windows. The second floor has two bedrooms, a bathroom, and a small living area. Finally, the third floor is a three-sided pyramid that can be used as a bedroom or an office.

To read more and see interior photos and floor plans, Click Here

My comments: Fascinating, with very good photos.

Read more!! →

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Parcel, Deed and Tax Data Differences for Appraisals

By on June 6, 2025   /   appraisal how to, liability, New URAR, non lender appraisals   /   Leave a comment
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Newz: Parcel, Deed and Tax Data Differences, New URAR, Probate/Estate Appraisals

June 6, 2025

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

  • LIA AD Problem with An Affidavit
  • The Difference Between Parcel Data, Deed Data, and Tax Data
  • Nautilus House in Naucalpan, Mexico
  • Brains, Bytes, and Bracketing: Why Appraisers Need Both Carbon and Silicon in Their Toolkit By Ernie Durbin
  • What’s new in the New URAR?
  • How Probate Appraisals Really Work By Tom Horn
  • An Appraiser’s Musings on Adaptive Reuse By Hal Humphreys
  • Mortgage applications decreased 3.9 percent from one week earlier

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The Difference Between Parcel Data, Deed Data, and Tax Data

Excerpts: Parcel, deed, and tax assessor data — what’s the difference between them, and which type of data do you need?

What Is Parcel Data?

Parcels, or property boundaries, can be defined as a shape or polygon and displayed on a map. These mapped areas comprise parcel data, and they might also show points of latitude and longitude, streets, or zip codes. Parcel data also includes ownership details, acreage, and the boundaries for the parcels.

What Is Deed Data?

Deed data include the information contained within a property deed. Unlike parcel data, deed data is not map-based although the data points can be overlaid on a map. A property deed is a legal document that transfers ownership of real estate and is required for real estate transactions, legal proceedings, and tracking property ownership history.

What Is Tax Data?

Tax data are collected by the county tax assessor. Tax data include property identification, addresses, current and past property ownership, legal descriptions, property features, property values, and taxes.

As you can see, these three real estate data types have some level of overlap. However, boundary data are required for mapping purposes and deed and tax data are critical for businesses providing legal, mortgage, and titling services.

To read more, Click Here

My comments: Read more details. Very good information. This article was written by ATTOM data, who provides all the types of data above. You can read the Mortgage sections of the article to see how it affects mortgages and appraisers.

When I started my first appraisal job at an assessor’s office in 1975, I was very lucky. I appraised the land for every parcel, improved or not. I had great training on the topics above.

I went to the county records to find, read and understand deeds.

I learned how to read assessor’s parcel maps, as that is how I found the properties I appraised. I attended a 3 day class by a property surveyor to understand how they determined property maps.

When I started my appraisal business in 1975 the chief appraiser one of the local lenders I worked for required that the appraisers read title report including the deeds for every property. You initialed the report.

I doubt if many appraisers got the training that I received. I was very, very lucky.

The deeds also include easements and other restrictions. When I am not sure the parcel map has correct dimensions or there may be easements, I obtain a copy of the deed’s legal description and run down the property lines (length, angle, etc.

In my city, there are many Victorians side by side on narrow lots with garages in the rear that use the driveway between the homes for access. A client wanted to get her parking rights between her house and the neighbor. Her neighbor did not have a car now so she could use the full driveway. I told her the neighbor could sell or rent her home and her driveway parking might be gone. There was a recorded driveway easement. I told her to get a survey. She purchased a car that fit into her half of the driveway.

Another time my client and a neighbor were not in agreement on the location of a fence. I told them I assume fences are not on the property boundary, unless I have a survey. They got one and resolved their dispute.

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Nautilus House in Naucalpan, Mexico

Excerpts: Architect’s statement: At the end of the turn-around is the piece of land, with upward topography, where the Nautilus was built. It is limited by three of its adjoining properties because each of them has high buildings. The fourth adjoining property if to the west and has wide views of a green area with mountains in the horizon.

The construction area was defined since the first studies at the back of the piece of land, leaving the pedestrian and car access at the front as well as only one façade, the so called fifth façade in architectonic language.

The social life of this dwelling place flows inside the Nautilus without any divisions. Going up the spiral stairs, continuing through the hall, going through the television room sheltered in the Nautilus belly flows the space up the spiral stairs to the study room, where you can view the mountain’s landscape.

Behind the Nautilus is wrapped the intimate and service area: bedrooms, walking closets, bathrooms and the kitchen.

To read more plus see fascinating phots, Click Here

My comment: This is one of my favorite “unique” homes.

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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