GSEs Archives

Defending Adjustments for Appraisers

By Ann O'Rourke on September 4, 2026 / adjustments, AI, AMCs, appraisal business, GSEs, UAD 3.6 / Leave a comment

Tags: adjustments, AI, AMC, appraisal, appraisal business, GSEs, UAD 3.6

Newz: GSEs Request Feedback on UAD 3.6, Defending Adjustments

September 4 , 2026

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

LIA AD: Too Late for a Reconsideration of Value
How to Defend Adjustments in Appraisal Reports
$112 Million Laguna Beach Mansion With a Private Library and a Rotating Bed in Primary Suite Could Become Priciest Home Ever Sold in Orange County
GSEs Request Appraiser Feedback on UAD 3.6
MY AD: How AI Can Help Residential Appraisers and Why Appraisers Will Always be Needed By By David Galatto
First the Borrower Fee. Now the Appraiser Compensation in Court By Kenneth J. Mullinix
The part of the process appraisers never see, and the reason your file keeps coming back
UAD 3.6 UPDATE – Inspection Checklist, New Survey: UAD 3.6 mandate is Nov. 2nd. Are you ready for it?,
MBA STATS: Mortgage applications increased 0.8 percent from one week earlier

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How to Defend Adjustments in Appraisal Reports

When someone questions an adjustment, many appraisers respond, “It’s based on market data” or “my experience in the market.” These statements might be true, but they don’t support the adjustment. They just state where it came from.

Appraisal reports are similar to scientific papers. A scientist can’t write “Based on my experiments, the hypothesis is correct” and expect peer review to accept it. Scientists need to share their methodology, summarize their analysis, and support their conclusions.

The same applies to appraisal adjustments. Saying you used market data is like saying you conducted an experiment. It’s just the starting point. Your report needs to summarize how you analyzed the data and how it supports that specific adjustment.

Without this documentation, you haven’t provided credible analysis. You’ve stated an unsupported opinion, regardless of your experience.

You need a clear path from market evidence to the number on your grid. Defending appraisal adjustments isn’t one perfect technique. It’s about using multiple, credible methods, explaining your logic, and sequencing your work so it aligns with how the market behaves and with USPAP.

Below is a practical, step-by-step approach you can put to work right away.

Start with the Right Sequence

Before you calculate any adjustment, get the order right. In practice, you should follow this sequence:

Apply transactional adjustments:
Real property rights conveyed
Financing terms
Conditions of sale
Expenditures made after purchase
Market conditions (time)
Apply property adjustments:
Location
Physical characteristics (e.g., finished square footage, bathrooms, garages, condition, quality)

Transactional adjustments affect the overall transaction price, and each adjustment creates a new base for the next one. They answer the question, “What would this comparable have sold for under typical terms on my effective date?”

These adjustments normalize the sales by removing distortions from unusual financing, non-market conditions, or time differences.

Equalize Market Conditions Before You Compare

Surplus vs. Excess Land for Appraisers

By Ann O'Rourke on May 2, 2025 / Economic analysis, GSEs, liability, Mortgage interest rates, New URAR / Leave a comment

Tags: appraisal how to, Economic analysis, GSEs, liability, mortgage interest rates

Newz: Surplus vs. Excess Land, Interest Rate Drop? GSE Oversight?

May 2, 2025

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

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

Surplus vs. Excess Land for Appraisals

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

By Kevin Hecht

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

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

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

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

Methods for Identifying Surplus vs. Excess Land

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

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

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

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

To read more, Click Here

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

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

Excerpts: Photo above info:

2. 8198 Uphill Rd, Joshua Tree, CA

Price: $17,950,000

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

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

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

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