What are the best AMCs for Appraisers?

By on May 9, 2025   /   AMCs, appraisal business, Appraisal Institute, Fannie, liability   /   Leave a comment
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Newz: AMCs,  Appraisal Institute Is Accused of Cover-ups, Appraisal’s Perfect Storm

May 9, 2025

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

  • LIA AD: Can’t Complete Appraisal with Access Denied
  • Choosing the Right Appraisal Management Companies (AMCs): A Guide for Appraisers
  • Staggering $900K Glass Lake House in Oklahoma Surfs to the Top of the Most Popular Homes List
  • Wildly Inappropriate Behavior’: Appraisal Institute Is Accused of Cover-ups
  • 5-minute YouTube video, posted yesterday by Cindy Chance, former AI CEO regarding her lawsuit that was filed May 8
  • Appraisal Institute’s Harassment, Tests, and Dance with AMCs
  • #MeToo And Testing Fraud Applies To Appraisal Industry’s Largest Trade Group
  • Pulte defends his authority as board chairman of Fannie, Freddie
  • Upheaval at mortgage regulators leaves questions for lenders
  • The Appraisal Profession’s Perfect Storm: A Veteran’s Take on a Dying Craft
  • Mortgage applications increased 11.0 percent from one week earlier
  • Appraisal Business Tips 
  • Humor for Appraisers

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Choosing the Right Appraisal Management Companies (AMCs): A Guide for Appraisers

Excerpts: Today a large percentage of residential real estate valuations are coordinated by appraisal management companies. For appraisers, working with AMCs is almost a necessity.

Let’s look at how appraisal management companies work, the pros and cons, and—perhaps most importantly — how to choose the right AMCs to partner with.

Additionally, we’re sharing insights from appraisers who answered our survey question, “What’s your best tip for working with AMCs?”

How to choose the right AMCs

To prevent challenges and ensure smooth operations, it’s crucial to select the right AMCs. We recommend taking the time upfront to find a few good AMCs that value your appraisal expertise, then building relationships with that smaller group.

Use the following steps to choose the best AMC partners for your appraisal business.

Step 1: Find AMC candidates

Step 2: Investigate each appraisal management company

Step 3: Narrow your list to select the best AMC partners

Tips from Appraisers

  • Prioritize communication
  • Ensure timely delivery
  • Be friendly and polite
  • Get to know the AMCs and their practices
  • Don’t sell yourself short

To read more, Click Here

My comments: Good article on AMCs. Worth reading. Includes appraiser comments. I wrote about how to evaluate AMCS in the monthly Appraisal Today. The most recent article, including a Client Rating Grid, is in the January 2025 article: “What are your best current and former AMC/lender clients?”

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Appraisal ADU Price Per Sq.Ft.?

By on February 14, 2025   /   ADUs, climate change, liability, Mortgage interest rates, time adjustments   /   Leave a comment
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Newz: ADU Price per Sq.ft.? Time Adjustments Insanity

February 14, 2025

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

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

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

By Ryan Lundquist, February 4, 2025

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

Comps

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

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

Closing thoughts

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

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

To read more, including over 40 comments, Click Here

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

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Construction Code Violations and Expertise Appraisals

By on January 3, 2025   /   appraisal business, appraisal how to, climate risk, humor, Mortgage interest rates, time adjustments   /   Leave a comment
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Newz: Appraiser Humor, Mortgage Rate Changes, New GSE Time Analysis

January 3, 2025

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

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

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Mortgage Rate History Since 1971 What about 2025?

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

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

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

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

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

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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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Appraisal Cost Approach and Highest and Best Use

By on November 16, 2024   /   AI, appraisal, appraisal how to, cost approach, Economic analysis, forecast, future, Highest and Best Use, liability, USPAP, zillow   /   Leave a comment
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Newz: Now What For Appraisers After Election? Generative AI and adjustments?

November 15, 2024

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

  • (LIA ad) Intended Use and User
  • 10 Questions on the Cost Approach and Highest and Best Use
  • A Real-Life ‘Yellowstone’: Historic 52,000-AcreArizona Ranch Hits the Market for $42 Million—Complete With a Private Airstrip and Off-Grid Cabin
  • Now What? On a New Trump Administration
  • Can Generative AI solve the adjustment support paradigm
  • How Deep Fakes Have Burrowed Into Home Finance
  • Murder in the flying saucer: inside The Chemosphere in Los Angeles, CA
  • Mortgage applications increased 0.5 percent from one week earlier
  • So Many Appraisal Cost Approach Questions
  • Appraisal Business Tips 
    Humor for Appraisers


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10 Questions on the Cost Approach and Highest and Best Use

By Timothy Andersen

Excerpts: It is clear most appraisers do not like to perform the analytics inherent in the Cost Approach. This may be because most appraisers simply do not appreciate its power. Consider these 10 Cost Approach questions.

10 QUESTIONS TO CONSIDER

Take a look at these 10 questions on the Cost approach (and various items related to it). After you are finished, you will still not like to do it. But you may appreciate its analytical and interpretative powers even more.

1. On the 1004 form is the indication that Fannie Mae does not require the Cost Approach to Value. However, where does the form instruct the appraiser not to complete the analytics of the Cost approach? (Spoiler Alert: It does not.)

2.   Instructions on the form state the appraiser is to “…[p]rovide adequate information to the lender/client to replicate the [herein] cost figures and calculations.” However, where does the typical appraiser provide such replicable information?

3. In addition, the reporting form requires the appraiser to “…[s]upport the opinion of site value [with a] summary of comparable land sales or other methods for estimating site value.” Nevertheless, where does the typical appraiser provide such summary information?…

So, it is clear from these Fannie Mae instructions that the appraisal of a SFR includes an analysis and valuation of the subject site separate from the valuation of the site as improved. Does this mean to conclude a site value as if the subject site were vacant and available to be put to its highest and best use? (Spoiler Alert: Yes, it does.)

To read all 10 Q&As, Click Here

My comments: Of course, for custom home construction the Cost Approach is required to determine the feasibility of construction before building the home. I got some good ideas on using the Cost Approach from this article.

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AVM Accuracy?

By on June 28, 2024   /   AI, AMCs, appraisal business, appraisal reviews, Fannie, Freddie, liability   /   Leave a comment
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Bank AVMs Are As Wildly Inaccurate As A Zestimate – But Will Be Regulated As Legitimate Values

By Jonathan Miller

June 24, 2024

Excerpts:

  •    AVMs are incredibly inaccurate and are being misused in property valuation
  •    AVMs don’t consider the condition of a home
  •    The mortgage industry’s push toward automation has reduced valuation accuracy

AVM or Automated Valuation Models have been incorrectly seen as the human-less way to value property. The technology has been drifting into mortgage lending reliance for more than a decade because it has been marketed as having the ease of “pushing a button.”

The Zestimate product by Zillow introduced the consumer to the concept nearly twenty years ago…

The recent ruling to regulate the credibility of AVMs by the OCC and FDIC essentially legitimized the use of AVMs in lending. The driver behind this final rule was to eliminate potential bias in valuations by replacing appraisers with AVMS. Yet the Urban Institute study Revisiting Automated Valuation Model Disparities in Majority-Black Neighborhoods said: But even with data improvement and artificial intelligence, we still find evidence that the percentage magnitude of AVM error is greater in majority-Black neighborhoods. This finding indicates that we cannot reject the role historic discrimination has played in the evaluation of home values.

AVM software is built by humans who have inherent biases. The void in representation by the appraisal industry over the past decade on the AVM issue, to talk about those 200 feral cats living in the house being valued, has enabled AVMs to be legitimized by the federal government.

During my career, I have observed that valuation accuracy has become weaker as technology has expanded in the mortgage process. The wiz-bang concept that the appraisal of a property can be completed at the push of a button is missing the realities of valuation.

To read more, Click Here

My comments: Worth reading. Miller was involved in AVM history and, as usual, has some very interesting stories plus lots of Zillow comments.

For pro-AVM information from AV Metrics and to see how they test AVM accuracy, Click Here I have been following them for many years.

Miller used to send out a very long post once a week. I often just scrolled fast through most of it to get to the appraisal section, but I missed a lot that was worth reading. Now, he has divided it into daily posts.

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Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on Mortgage appraisal reviews, AI and ChatGPT, freddie and fannie mortgage forecast, unusual homes, mortgage origination stats, etc

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Appraisers: Be Careful with Your Words

By on July 28, 2023   /   bias, Fannie, Fannie Forms, george dell, non-lender appraisals   /   Leave a comment
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Pesky Words. Keeping Appraisers out of Language Purgatory

Appraisers: Be Careful with Your Words!

by Dave Towne

Excerpts: Appraisers, on July 17, 2023, a document from Freddie Mac was circulated to numerous appraisers around the US which identified certain words and other info that can be considered to be ‘BIASED’ in appraisal reports. Here is the Link to the Bulletin.

We need to step back for a moment and carefully analyze and consider why that was done, and what it means to appraisers.

In many ways, appraisers forget the purpose of the appraisal assignment – which is to value real estate. In other words, the physical structures tied to the land.

But too often, elements of personal or neighborhood demographics or other comments seep into the reports. Maybe not consciously or on purpose, but because appraisers are not critically reading what they write and may not realize the implications of how what they write can be interpreted.

To read more, click here

To read the Freddie document, click here

My comments: Well written and worth reading. Thanks to Dave Towne! I have subscribed to his emails for a long time. To join his list, send an email to dtowne@fidalgo.net requesting to join. I wrote about the July 17 Freddie announcement in this newsletter’s June 16, 2023 issue. Guess it finally got out into the appraiser internet world.

Appraisal Business Tips 

Humor for Appraisers

Fannie: Words and Phrases in Appraisals

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NOTE: Please scroll down to read the other topics in this long blog post on non lender appraisals, USPAP and Bias, Fannie changes, unusual homes, mortgage origination

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FHA: Cosmetic vs. MPR Repairs

By on May 26, 2023   /   bad appraisers, bias, FHA, lender appraisals, USPAP   /   Leave a comment
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Cosmetic vs. MPR Repairs: Guidance for FHA Appraisers

By: McKissock

Excerpts: If you are appraising a property that needs some cosmetic repairs but meets FHA minimum property requirements (MPR) in its current condition, you should make the appraisal “as-is.” Here is some guidance on cosmetic repairs vs. MPR repairs.

Topics include:

  • When can an FHA appraisal be completed “as-is” vs. “subject to”?
  • Cosmetic repairs Examples
  • MPR repairs Examples
  • Conditions that require inspection Examples

To read more, click here

My comments: If you do FHA appraisals, read this blog post. Photos and lots of examples. I quit doing FHA appraisals in the mid-1980s because of the inspection requirements compared to conventional appraisals, that did not have the requirement.

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on appraisal “modernization”, bias hearing, bad appraiser, USPAP, unusual homes, mortgage origination stats, etc.

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Green Home Appraisals – Ideas for Appraisers

By on May 6, 2022   /   adjustments, ANSI, desktop appraisals, lender appraisals   /   Leave a comment
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5 Tips for Appraising Green Homes

By McKissock

Excerpts:

1. Consider each home on a case-by-case basis

You must independently determine whether there is sufficient information available to develop a reliable opinion of market value for each individual property. That will depend on the extent of the differences between the green home and other types of houses in the neighborhood. It will also depend on the number of such properties that have already been sold in the neighborhood.

5. Compare improvements to those in the neighborhood

Any improvements should conform to the neighborhood in terms of age, type, design, and materials used for their construction. If there is market resistance to a green home property because its improvements are not compatible with the neighborhood or with the requirements of the competitive market because of adequacy of plumbing, heating, or electrical services; design; quality; size; condition; or any other reason directly related to market demand, address the impact to the value and marketability of the subject property.

To read more, click here

My comments: I have “Mediterranean” (mild) weather, without much solar. If you live in an area with high summer and/or low winter temperatures, there are probably more solar installations. Many classes are offered by various appraisal CE providers. Check with education providers, such as McKissock, the Appraisal Institute, and local offerings.

What are Pass through Bedrooms for Appraisals

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on desktops, nonbanks, alternative financing, unusual homes, mortgage origination stats, etc.

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Neighborhood Boundaries for Appraisals

By on January 28, 2022   /   adjustments, ANSI, appraisal classes, appraisal how to, bias   /   Leave a comment
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Gentrification, neighborhood boundaries, and bias

By Ryan Lundquist 

Excerpts: Photo used with permission (thanks, Vicky).

Sometimes, crossing the street can make all the difference for value. In short, if we don’t understand where a neighborhood starts and ends, we might choose the wrong comps.

Q&A #3 How do we know neighborhood boundaries?

Okay, this is a big question, and it could easily be a dissertation. For starters, let’s consider what Fannie Mae says about neighborhoods:

Fannie Mae: “The appraiser should provide an outline of the neighborhood boundaries, which should be clearly delineated using ‘North,’ ‘South’, ‘East,’ and ‘West’. These boundaries may include but are not limited to streets, legally recognized neighborhood boundaries, waterways, or other natural boundaries that define the separation of one neighborhood from another. Appraisers should not reference a map or other addendum as the only example of the neighborhood boundaries.”

Other thoughts (mine): I think sometimes we focus only on major streets, but let’s also consider school boundaries and even how neighborhood associations or city websites define areas. But also, where would residents themselves draw the lines? And where would buyers be hunting for a home before shopping somewhere else? All these things could be clues.

To read more and see lots of maps and graphs, click here

My comments: Excellent analysis of specific neighborhood boundaries with maps and graphs, of course. Worth reading. The Jan. and Feb issues of the monthly Appraisal Today has this article: Does my neighborhood really need to be analyzed? Parts I II By Tim Andersen, MAI. The best neighborhood explanations I have ever read!!

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, ANSI, bias, smells, mortgage origination stats, etc.

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