New UAD Overhaul: What Appraisers Can Expect in 2025 & Beyond
Folks, I recently attended a Train the Trainer 1.5 day class about the new UAD/URAR, jointly facilitated by Fannie Mae, Freddie Mac and Aloft. About 20 other instructors from across the US were also present. This class is required before this new UAD material can be taught to other appraisers, under contract with the GSEs.
My info below is a limited high-level summary for the new UAD and URAR of what was presented, and what the appraiser community can expect to see, from now into 2026. It is not meant to be comprehensive; I may send out other info as I become more familiar with UAD 3.6 and the updated URAR.
First, let’s examine the time line for the development and implementation process:
We’re currently in the middle portion (side-to-side) of this graph. Note how the orange Software providers are associated with the top dark blue section. I can tell you that the software development process is a massive undertaking, due to how the new ‘dynamic’ Report process will work for various kinds of residential housing. Each of the software vendors are working independently to produce their data recording and reporting processes. Currently, none that I know of have their software ready for full appraiser user testing. That should be done by at least the start of the third quarter 2025.
Training for this new process for appraisers should begin occurring in 2025, Quarters 2.5-3.5. This training will be separate from the individual appraisal software provider training. Actual ‘live’ use of the new URAR and UAD v 3.6 won’t begin with limited lenders until 2025 Q3, so training early in the year may not be productive. The appraisal software providers will be offering their own specific training at approximately the same time frame.
FHA, VA and USDA will be incorporating this new process for their residential lending Reports in roughly the same time frame as will happen with GSE Reports. Specific data aspects within Reports required by them will be incorporated into UAD 3.6.
Forms vs Reports –
Banish the word ‘form’ from your vocabulary when discussing this new version of UAD. The legacy (current) UAD (ver. 2.6) was built on top of individual pre-printed forms. This new version, numbered UAD 3.6, is dynamic. That means you won’t start a Report with a specific form; you’ll start with residential-type assignment criteria determined by the lender who will want certain items reported, depending on the property and Report type. The Report will populate data inclusion elements depending on necessary items that are required to be included in the Report per residential property type. The completed Report will be output and uploaded to the client from the software as a PDF.
NOTE: I’d suggest every Subject assignment have a preliminary data check done before the appraiser arrives at the property. Get into County, Parish, MLS records first, input necessary elements into the preliminary Report, then go out and waltz up to the front door. That way you will know what is in place (theoretically!), verses what the client thinks exists. Clarify assignment Report conditions if changes are necessary prior to going to the Subject property.
Quality and Condition Ratings –
We learned that the Definitions for Q and C have been updated for more clarity. These will be in a new Appendix F-1, (available on the GSE web sites) which appraisers should review BEFORE beginning to do UAD 3.6 URAR Reports! Secondly, the Report will allow for better reporting of Q & C ratings for various components. And additional property amenities can be selected from a list or drop-down.
Comments & Exhibits within Report –
The current ‘forms’ have individual “sections” for reporting data. But the comment space is limited, often requiring extending comments onto Addendum pages. The new dynamic Report will have similar “sections.” But each “section” will have expandable additional space for extensive comments as necessary, and there will be NO ADDITIONAL ADDENDUM pages in Reports. Exhibits that the appraiser wants to include with a “section” will be placed there. This new design of Reports keeps relevant comments and exhibit info together and eliminates the need for Report users to ‘flip pages’ to find what you wrote or included about a particular item pertaining to that section topic.
Sales Comparison Grid –
It will look similar to the existing ‘form’, but there will be additional reporting elements over 2 – 3.5 LEGAL LENGTH pages, divided into “sections.” I’m not yet sure if all items I see on Appendix C-1 will be in every Report. A front photo of each property will be at the top of the grid column. New data elements are currently included, requested by underwriter users, but in class we educators strongly questioned the necessity and validity of those items. Whether they indeed remain on the final URAR Report version is something to watch for. Adjustments for differences will be done similarly to what we do now on the current ‘forms.’ I won’t provide additional details here, but may in the future as this new process is carefully examined. Due to the dynamic nature of this new process, it will take time to research and comprehend.
Technology –
Reported elsewhere prior, and discussed in class, is whether or not the appraiser should use a tablet in the field while inspecting/observing the Subject and Comparables. In my view, absolutely, unfortunately! The days of pencil, pen and clipboard are fast disappearing, except perhaps for measuring and sketching the subject on-site. But even then, new technology developed over the past few years is proving very robust in delineating the Subject sketch to the ANSI standard. ANSI sketch compatibility will be incorporated into the new Report. The new URAR reporting process using UAD 3.6 involves so many additional data points that an appraiser inspecting without a tablet likely will overlook necessary items while in the field, and may have to make one or more additional trip out to collect the required data. This will be especially problematic for the Comparables if MLS data is minimal or lacking.
Time Involvement –
As we in class became more attuned to this new process, it became evident that the appraiser’s time involvement to complete a UAD v 3.6 URAR Report will be extended beyond what is experienced nowadays. In most cases, the Report will involve both office desktop and field tablet inputting of data, which at this point appears to be more comprehensive than is currently required. Will the lenders recognize this fact, and correspondingly tell their lending client that the “appraisal Report” will cost more than what it might have in the past? More importantly, will appraisers quit accepting low-ball fee assignments? These are unknown at this point.
Predominant eliminated! –
One of the dumbest required items on the current ‘form’ is itemizing the Predominant sale price. That means “the most common, or most frequent” sale price. Seldom does that exist! Wisely, this has been eliminated. The new Report will ask for lowest, median and highest Sale Price, and per common sense, the appraised value should be within those low and high figures.
This entire process to modify these residential appraisal reporting practices is incredibly complex. That’s why it’s taking multiple years to implement. Keep an eye out for training classes offered, because you will need to become familiar with BOTH the UAD v 3.6 URAR requirements, distinguished from your brand of appraisal software’s process to complete Reports.
Dave Towne on e-AppraisersDirectory.com
- New UAD Overhaul: What Appraisers Can Expect in 2025 & Beyond - September 19, 2024
- Cindy Chance Terminated - September 16, 2024
- Key Part of USPAP Not Available from TAF - July 19, 2024
I don’t think the idea is to fill all data points via tablet on site. The new UAD changes could (hopefully) end up being a big improvement in productivity and quality.
Bradford’s NightHawk presentation explores the sort of things that were not possible before with the ancient 1004 PDFs:
https://www.bradfordsoftware.com/nighthawk
Of course, it all depends on the implementation.
The NightHawk presentation at ACOW was a flop. The data was all wrong for the property that they were trying to test it on.
Well that’s really disappointing 🙁
Just about every problem your tech ‘solved’ is something we used to refer to as every day competent business management. If they would not have participated in amc industry fraud, they’d never have needed those tools to handle the volume sixty thousand other licensed appraisers could have and would have handled in their place.
I don’t understand this response, was it to me? If so, can you elaborate?
Great, so we will spend hours (no raise in fee of course) detailing a hundred more points of the subject only to find agents still can’t identify basic property characteristics in their listings, and local governments fail to separate out such basic things as basement area from GLA. What good is one set of data points when its nearly impossible to determine what another property has?
Seek the truth.
My thoughts on the new form. Well it will be implemented late in 2025 so not to upset the large amount of appraisal lending work to follow from now till Dec 2025. The lenders now have job ads for hiring staff for the next BOOM getting ready again to hire office staff and mortgage loan professionals to service the very large amount of Refinance Loans and Purchase Loans to follow with each month the mortgage interest rate drops.
So expect to be extra busy as an appraiser soon as the Property Data Collectors with limited experience that will also compete in the over flow of work. As for myself as an appraiser, I will wait until the media news sources are crying out for appraisers and then i will selectively agree to do Nothing but the Rush assignments with large rush fees when the work load is 3-6 weeks out before an appraiser can inspect a property. Borrowers have Free Will to wait for ever for an appraiser or agree to a high fee rush assignment in 48 hours to secure a lower mortgage interest rate.
Meanwhile 99% of my work is General Purpose Reports, Non Lender Appraisal and 1% is lender work. My reports will still include 11 Statistical Charts and Scatter Graphs which I down load from MLS CMA and export directly into the report for a reader to actually make sense of the new form with over 20 pages of form report from the prior 6 page form report.
IF you don’t want to raise your fees, that is on you. IF they are asking for more work and time, then raise your fee. Simple as that. IF you bend just once, then they have you at whatever fee they name. You name your fee.
Hey, waddaya mean?! When I ask agents what sort of condition their listing is in, you know, new, excellent, very good, good, average, fair poor, they always tell me that it is really cute. If that’s not descriptive, I don’t know what is!
Puffing anyone?!
Good points Bill. You’d think with all the effort and resources they’d develop simple tools for more quality BPO and realty agent side price development. I keep seeing variety bpo’s filled out and most times say to myself; if an appraiser tried that approach the report would be immediately rejected, they’d never even get through the automated review gates. Why are they focusing on appraisals given the abysmal state of most realty agents inability to utilize and fill bpo forms correctly? Central planning never works.
This is a link to a FNMA folder with 12 sample appraisal reports. There are 5 SFR appraisal reports; 2 MH; 1 COP; 2 CONDO; and 2 MULTI. Once at this page, scroll down and CLICK ON “Appendix D-1: URAR Sample Scenarios and XML Files” where a .zip file should be opened or downloaded to your web browser where you should see the 12 sample reports.
https://singlefamily.fanniemae.com/delivering/uniform-mortgage-data-program/uniform-appraisal-dataset
Well I’ve had a great run in this profession. Retirement in less than one year from today and I’ll be shutting down my business. Others that were with me retired during COVID and I didn’t feel up to bring on new ones. Good luck ya all!
AB I appreciate this website!
Right there with you. I moved up my retirement 1 year. Was going to be end of 2025 now it will be end of 2024. Cannot wait. God speed to you!
Me too. It’s been a great run but I’m worn out.
I hear you, I wanted to leave before I really no longer loved what I do…that time has come.
It’s funny. I wasn’t sure when I would retire, thought it would be a few years. But I just hit a wall one day and said it’s time. Every report became drudgery.
I am hoping to hang in there 3 more yrs. I’m semi-retired now… but support adult daughter on disability so hopely can get 2-3 more.
I have a 5 page addendum tailored for each appraisal. ie: wells and septic systems are typical for the area.
Different style houses are often used as comparables due to the small population in this rural county. Yadayada
So assuming there is a place to put all of this
Thanks for this
There will be a place for every comment you have in your present reports, you just have to find where it logically fits.
Agreed! It was a good run. But when business suddenly dried up in the Fall of 2022, thanks to living below my means and some well-timed R.E. investment, I did not seek out new clients or opportunities, content to take what little still came in, which has been next to nothing.
I tell my friends I pretend to be retired. I’ll make it official when my license expires in November. Talk about a career and a profession fizzling out!
yep! the writing is on the wall.
Count me in. I ‘ll be done, too.
I let my license expire in November, after 2 years which were the slowest in my 33 year appraisal career. I do not see it getting better. Life is too short to stress about money. Live below your means! I’ve enjoyed the past few months more than any in my life! Make it happen!
As I have said before this report reminds me of a cross between an appraisal, an inspection and a relocation report. Will you get paid for all the extra work and liability. Oh hell no! I feel for the newbies entering this profession with the new PAREA education using the current 1004 form and then having to deal with this new form. These new Appraisers will be thrown into the Lions Den, unless those that teach the class will be hiring them as well, which some I understand may be doing. If not, the new students who take this course will still need some sort of mentor especially with all the changes coming.
I wish you all God Speed and prosperity in the coming years, it will be one rough roller coaster ride. I have already survived Dodd Frank, The Real Estate Boom from early 2000’s to the crash in 2008-9 and I do not intend to have to deal with the new form and the whole bias issue that looms large. Luckily most of my business has been personal with only about 5% lender business last year and 1% this year. If I had relied on lender business, I would have retired before now.
Be safe out there everyone!
One appraiser’s vision of the (near) future:
Imagine having your own privately hosted Large Language Model (LLM) or soon-to-debut Artificial General Intelligence (AGI) model. This in-house appraisal tool will input and analyze all your photos, on-site video footage, and LiDAR measured dwelling information. Your LLM will then automatically export descriptive text and image data to the new appraisal software that’s currently being developed.
Other modules will sift through all local MLS data, identify the best 6-10 comparable sales, generate market statistics, and export automatically adjusted comp sale data. All of this will happen in just 10-20 seconds, including calculating and justifying adjustments on the grid.
Just think of how much time you will save! How much money you will make! Like Donald Fagen sings, “What a beautiful world this will be. What a glorious time to be free.” I sure am glad the GSEs and AMCs won’t use their own in-house LLM and AGI systems along with third-party data collectors!
This one really ruined my day. The pace of systemic data irregularity will increase at an exponential pace. Did they even dare to tackle the NAR settlement and likely need for appraisers to validate concessions data if that could possibly be agency fees? Is there a new line for that?
I’ve read through the entire technical specs of this last year and the years prior. I’m not looking again because I will not be using this form. The concept was incompetently formed around a false premise that the current form was not functional. Nothing has changed since then.
What exactly is wrong with the current forms?
Those forms make it harder for the transition to AI? Also, isn’t that why the 800 lb gorillas in the room made ANSI mandatory? If ANSI was so great why then doesn’t the VA/HUD require it and USDA is still thinking about it…lol. Last I checked only a total of two states, Kentucky/Mississippi have ANSI as mandatory for their county assessors. Hmmm
Agree
HUD also is not requiring the use of ANSI.
Thankfully.
Illustrating the disconnect of Fannie and Freddie management from the rest of the industry and local policies. Appraisal modernization was never going to work.
Despite being among the most popular housing type in this state for decades, Colorado has not seen any new bi or tri level construction in the past twenty years. The new consolidated mostly monopolized new construction industry alongside green energy groups are the ones whom promoted ANSI anyways. Not too many are building for what’s best for consumers long term, they’re all just maximizing profits at consumers expense. As the setbacks reduce, building lots get smaller and smaller, home sizes get bigger and bigger. Hello neighbor!
I’ve talked to a few general contractors whom no longer want to provide service to regular suburban homes anymore. Disheartened by new building trends with inferior building materials, the way home owners are constantly disappointed by the notion restrictive HOA’s, constantly unnecessarily updated ever more restrictive building codes, and new building methodologies are prohibitive to many custom home modifications. If you could even afford them in the first place, they are increasingly likely to turn down the service requests.
Did you want real solid wood floor joists instead of shorter age life pressboard? Out of luck. Did you want individual hot cold control knobs in your shower? Out of luck. Did you want real copper piping instead of pex? Out of luck. Did you want low voc building components such as solid woods, iron and metal, rather than linoleum and faux products? Out of luck. Did you want to add a fireplace to your home or swap a natural gas fireplace for a classic wood stove or brick hearth? Out of luck. Did you want an actual fence which was your own and not subjected to restrictive height and material type codes? Out of luck. Did you want affordable hvac or electric modifications to simple items within your home? Code violation. Safe analog metering devices instead of fire hazard health harming emf emitting granular data spyware ‘smart’ devices? Out of luck. An analog hard wired thermostat which does not interact with smart meter remote control capability? Out of luck. Hard wired security systems which do no rely on wireless interface? Out of luck. A window in your garage with that classic bonus second garage door to step into the back yard? Maybe, but in most cases; out of luck. Traditional hot water heaters and furnaces which are low maintenance, longer lasting, lower cost to replace or repair with more product choice allow ability which does not fall under high efficiency guidelines and break all the time? Out of luck. Classic incandescent light bulbs? Out of luck. Something really zany like a double lot so you have room to plant extra trees and toss up an outbuilding? Denied.
Would you like your home to be instantly polluted by forever chemicals via fire retardant additives contained in spray foam and cellulose insulation? That you can have. Linoleum composites instead of real wood? Check. Built in garages rather than attached which result in smaller lot sizes? Check and check. Mandatory mid height fences so every neighbor in the area can monitor your back yard activity and tattle on you to nosy ninny hoa volunteers, and you can never have a full sized dog? Check again. Would you like to voluntarily cover the costs of park maintenance on your own hoa bill which the city planners now refuse to cover via the general tax fund like everyone else whom owns a 2000’s or earlier built home enjoys? Absolutely. How about having absolutely no control or influence over your own hoa group via a ‘municipally incorporated hoa’, which doubles if not triples your yearly home tax bill. Indeed you can have that. Shorter driveways to avoid rain taxes? Great idea. RV prohibitions so you have to pay for off site storage instead? Certainly. Signal jumpers and dangerous emf frequencies emitting from every standard builder device which has any technology what so ever located inside? You bet partner, we’ll give that to you. How about increased risk of carbon monoxide poisoning, volatile organic compound off gassing, being completely alarm dependent and dealing with exponentially increased mold mildew and rot hazard risks because your home has maximized energy efficiency and almost no natural air exchange rate? Check and check again. How about signing builder and hoa disclosures you should not garden or plant fruit producing trees because the entire development was built downstream or on the former site of a superfund epa cleanup or reclaimed industrial lands? You’re figuring this new construction trends thing out.
I don’t know how people go for new construction these days. One gets a lot more benefit with a lower cost profile by properly retrofitting an old home. Larger land lots. No hoa’s. RV parking. More lenient zoning. Broader array of city services. Give it a generation or two, those average suburban homes will be the most sought after elite residences built in the best land areas driving the peak pricing. What is new today will depreciate at an accelerated pace while maintaining a higher taxable and maintenance cost profile, money pits. Avm utilities will be none the wiser, there is no automated process in the world, any new form option or inclusion set which can capture the rich knowledge people whom know about housing up and down can provide. Being an appraiser is not just about forms and efficiency. It’s about understanding the details of real property through every stage, from dirt to development to coding to taxes. The entire picture.
Hey I forgot to ask you before I make the most consequential financial decision in my entire life with far reaching implications which will effect my personal budget for decades to come; What’s your fee and turn time?
Just wait until the lawsuit start coming in from the appraisal waivers and the buyer being clueless about the actual value of the home. Cheaper is always better right? Right…?
Dynamic, huh?
The new “form” asks if broadband is available (yes/no). What definition of broadband are we using? The FCC just updated their definition this year to be a minimum of 100mb up and 20mb down. But according to broadband.com there are 45 million Americans that do not have access to the new definition. There are many plans with 100mb+, but many limit download to a max 10-15mb with no higher download speed available. I personally have 300 up and 10 down (I could get up to 500 up 50 down so it is available). My plan is plenty fast enough, but technically does not meet the FCC definition of broadband. Do we have to find all the internet providers available to the subject dwelling, and then find out if at least one of them has a plan that meets this definition? And if they don’t is FNMA expecting us to make an adjustment? Another superfluous data field from FNMA.
Presence of any given municipal or private service tie ins is a curable and ever changing obsolescence. Every single day labor crews lay new lines to the remote places of the world. Every day existing systems break down somewhere. Who will be the first to check that box yes because of starlink or hughes net?
When even seasoned licensed appraisers and realty agents, will not be able to understand their own appraisals delivered for their own home loans. What are they doing still playing around with .zip files in 2024? This is a tremendous waste of resources which would never have received such an investment in the private sector. As will be evident in the near future, by the way only fannie and freddie will adopt this model. Everyone else including courts and investors, the entire realty sales community, most likely hud and the va, will still be utilizing a classical one page grid model. Because normal people can understand what they’re reading.
Special note to the tech nerds working on this forms project; The appraisal grid is one big math equation, rendering the most possible aspects of property versus property comparisons in a way which allows for a mathematical expression and calculation of value. Every line item entry is it’s own mathematical element.
What kind of idiot spreads a single math equation across ten different pages and forgets a net/gross total adjustments comparison line? Obviously someone not very good at math. Still going to need to print this out on paper. Some of us still care about the environment and use pens and paper. FNMA; in support of more ewaste, apparently also doubling down as tablet and mobile device salesmen.
They should scrap the entire forms redevelopment project. What an incredible waste of manpower and resources, only to end up with a less functional version of the same thing. In the meantime, everyone from courts to estate services, other sections of government which use appraisal services, state governing boards and administrative appraisers, the entire realty community, will still be using a general purpose form or standard bpo. It’s almost as if a criminal organization is attempting to cover for pre planned fraud activity with some confusing and confounding new technology… Never underestimate the damage that incompetent program managers can cause.
“Almost”?
Regardless, I’ll be the one of the professionals who is raising fees to cover the time involved in creating this new appraisal.
More than ever, appraisers must know their worth!
Dave described something that Im. bettimg will have to fall in the $1,000 – $1,500 range for non complex jobs.
Anything with a 2nd unit will need to be treated as the small income property it is, rather than the mythical “ADU” label that so many think excuses all permit failures, rent control, and tenant rights and their impact on value and marketability.
I’m currently charging (generally) $2500 to $3500 for most complex jobs. I doubt MISMO oriented lenders expect to pay those kind of fees, so I doubt I’ll be doing GSE work anymore in the future than I do now.
Again, I urge appraisers to seek other revenue streams, than GSEs.
Or….just do private work as the AMCs will not compensate the fee appraiser for their time. They don’t now and they won’t later.
If they really want to make appraising more efficient they need to eliminate the requirement for appraisers to drive to the comps and get pics.
it is a waste of time 90% of the time. Once in awhile, you come across something interesting, but by and large, it is a waste.
exactly, we can see any location or view differences from the plat maps reviewed. And if the house (comp) has been totally renovated since purchase than the photo it is misleading to the reader of the report. Of course I would put that in my comments but not always are the comments read completely by the UW.
A picture is worth a thousand words but an in person visit (subject/comps) is worth a million. I had a comp in a neighborhood I was well familiar with and after viewing the listing photos I yelled at the agent (in my head of course) where the hell are the pictures of the mountains the house was facing. She had not included one. The pictures of the outside of the house were so close to the structure that you could not see any surrounding features. Just my thoughts.
Like that comment Koma. Some people are naturals with a camera. Other people simply never took the time to acquire those skills.
The days of simply copying photos for this type of work are now more complicated. MLS’s nationwide have updated their rules.
https://recolorado.com/security-of-your-data/
https://cdn.recolorado.com/files/MLS-Policy.pdf
Pg 25-32, ownership of mls compilations and copyrights. What is contained in appraisal reports is not the GSE’s privately owned data they can do whatever they want without restriction.
The appraiser is supposed to be the one defining the scope of work, not the lender. Yet the automation aspect of the new forms appears to put the lender in complete control, and leave the appraiser in the dark. Reminds me of government shenanigans; You have to pass the bill (accept the order), in order to find out what’s in the bill (what your scope of work will be).
Still in favor of the in person comps pictures requirements. In fact, realty sales agents should be held to the same standard. Amc’s have taken advantage of these requirements, which is why a substantial portion of simple appraisal work has now been shifted over to realty persons instead.
There is no substitute for seeing a home in person, that often includes comparables. This will always be a debated issue due to the nature of housing in different locations. Taking an elevator to get a photo of a front door in a high rise is of course rather pointless. Quite often so is taking photos of comps in the same high density housing areas. On the other hand, from complex to complex, or house to house in dynamic neighborhoods with different characteristics, seeing first hand brings valuable insight into project management, area amenity, obsolescence, benefits of location, traffic conditions and access.
In a perfect world this would not be necessary, if realty agents always disclosed every detail. That will never happen because the agent has a duty to their clients, which means they should not be advertising every last negative condition. This is why a buyers side representative is in place to assist in comprehensive review before submitting a contract. The appraiser is last in line as the final check and balance.
The interest of better consumer protection is how the in person appraiser review requirement came about in the first place. Now we just hear about efficiency this, cost savings that, as an entire nations worth of citizen consumers are placed at elevated risk so commissioned based agents can achieve a higher sales retention rate. The popular line is save consumers time and money. The reality is committing to a mortgage loan is most often the longest and largest financial commitment people make in there entire lives. The process should take longer.
We should be talking about increasing minimum standards for optimal performance and inhibiting the demands for extra expedient service as the status quo. Demanding 24/48 hour turn times, allowing runners, pdc’s, and typist outsources, forgoing in person review, those are all anti consumer safety positions people should reconsider their support of. Faster cheaper faster cheaper. And now there is a whip at appraisers backs all day long, we’re being ‘modernized’ out of existence, consumers have fewer safeguards, national housing over valuation has taken strong root in corelation with an ongoing affordability crisis. Be careful what you wish for.
Im so tired of amateurs claiming ‘driving the comps’ is inefficient or a waste of time.
Clearly they haven’t a clue as to what specifically they are supposed to be looking for.
Yet they continue to undermine our profession with short sighted, poorly informed suggestions.
Totally agree. Inspecting the comparables is part of the adventure outside of the office cubicle. There is so much additional information in just looking at the actual sale comparable and look at it from the buyers and sellers perspective as to , Did this Sale make sense in the market place ?
1 year and 10 months.
That’s all the time I have left in the appraiser profession (or what used to be a profession). It was a good run.
You’re going to become an order taker filling out a program……JUST LIKE Turbo Tax over the next 2 years.
It sounds like 65% of you are retiring. Be sure to immediately drag your corpse to the appraiser bone yard (regardless if you chose to work in a more profitable business). Contributors on this web site are well known for bashing anyone who leaves this WORTHLESS flea bitten JOB.
The appraiser must be able to anticipate what data gathering is necessary. That is why there are different forms for different housing types, creating a pre established framework. Such a concept was based on intelligent design. There must be zero confusion about what data the appraiser will need to gather ahead of time. If we can’t print out the form on paper ahead of the inspection the concept will not work properly in the real world.
Was shopping at Costco yesterday and they had this standard ice cooler, but this one had two giant speakers on the front. We laughed at the idea and were making fun of the all in one concept. Who’s really sitting around complaining about, I’m lugging this big old radio, and this big old cooler around, this is just too much. I wish someone out there would magically combine the two. The product is a novelty, someones bright idea of the day.
All in one is not a serious concept for all complex applications. In order to gain efficiencies, is why we compartmentalize and sort ahead of time. Show me one single appraiser anywhere who’s complaining about; Why does this have to be so complex, all these different forms to choose from? Someone should step in and magically make them all one single form together because it’s simply too difficult for me to make this choice.
Somewhat off topic. Never understood why regular condos and site condos do not have separate appraisal forms. It is very awkward to put a site condo on a condo form. At least in our area site condo lots function very similar to traditionally platted development lots. Both have identifiable lots. Whereas regular condos do not typically. All the land is common area for regular condos. Many of the residents do not know or care about whether they have a platted lot or site condo. Also, regular condo projects have issues with financing if a certain percentage is not owner-occupied. In our area site condos and regular condos function as different animals. My experience includes appraising proposed: plats, site condos, and regular condos; as well as foreclosures and workouts related to these property types. Also, our office has appraised individual properties in each property type.
Part of the problem is people want condos to be something they are not.
1. Condominium is a subdivision of airspace. It may or may not ALSO include a site comprised of land. They may look like an SFR but they are not.
2. The term ‘site condo’ should never have been coined. It has no universally accepted definition. It is an artificial construct legally. Free-standing condominiums are not unique or even new. They have been around for a very long time. In the past, ownership of the site under a condo is what differentiated between a townhouse and a flat type condominium (in California anyway…circa 1974 and onward).
FAILURE by builders, buyers, owners, sellers, title insurance companies, agents, appraisers, and lenders, who all wanted their ‘condo’ to be “something else” eligible for better financing or fewer loan restrictions is why we have confusion about condo ‘types’ today.
We dont actually appraise “real estate”. We appraise Bundles of RIGHTS and limitations associated with specific types of real estate and its ownership. Collectively, our profession (largely due to GSE and lender interference) forgot that and started doing appraisals based on the FNMA Form they were ordered to be reported on; INSTEAD of the rights of ownership that were actually being appraised. We allowed PUD to frequently replace condo and townhouses.
Municipalities pandering to developers played along to the point that common area ownership interests are no longer uniquely definable to the exclusion of all other “fee interests” and combinations thereof.
Example: Fee as to Lot 2 Condominium Unit 1 (etc) and an undivided 1/10th interest as tenant in common in Lot 1. Frankly, it was NEVER a fee interest. From day one it was fee LESS those rights and interests of the HOA and other common area owners. (You could not knock out an exterior wall or replace the roof or even put a chimney through it) even if that area was designated part of your “fee”. This is where we get into ownership boundaries that have been permitted to become variable. Interior layer of paint? INSIDE of Exterior wall (townhouse)? Site condo? Can you paint it hot pink and orange and purple, with pink flamingos all over “your” front yard? No? Then it is NOT a fee. Its LESS THAN A FEE. Regardless of local / lender label.
want something screwed up involve the government and a bunch of bankers and attorneys.
Everyone is expendable. Many people want to be appraisers and will be more than happy to step in and get the job done.
Dockworkers get it (turned down a 50% wage increase and demanding a 77% increase)
Auto workers certainly got it 30+ percent wage increase
Strike activity picked up by 280% in 2023 alone.
Oddly enough after 15 YEARS those self proclaimed “highly intelligent” real appraisers are still CLUELESS.
Was that really so hard appraisers? After 2 days on strike these dock workers will walk away with a pay increase of between 50 and 77 percent! You guys may want to rethink your strategy (or lack thereof).
They are fighting to stop automation of their industry. Does that sound familiar? Like I’ve always said, we appraisers are our own worst enemy.
Dock workers lost 2 days work to reap a 66% pay increase! With rates dropping appraisers have the power to hold the housing market by the throat. The difference between dock workers and appraisers off course being that dock workers have billiards. All I can say is enjoy your delicious dog food…you’ve most certainly earned it.
Appraisers have neve stuck together and will always try and undercut each other. Case in point, United Wholesale Mortgage typically pays $177.90 to do a 1004D (cert of completion) but today I was told they’ve outsourced this process to a company called Valligent. Meaning, the original appraiser will no longer get the follow up assignment, but rather by way of a virtual / hybrid product, Valligent will be assigning to someone on their panel. Not sure if it’s a licensed appraiser or an Uber driver who walks the agent through the onsite visit they must now perform, but was told the fee was $50 of which I’m sure the split could be 20 to 50% to the signing appraiser.
I guess its time to take 100 pictures of chipping and peeling paint and spell out that any follow up inspection must also show all 100 spots repaired. Hell, I might even take pictures of the neighbors peeling paint so good luck to Valligent in signing off on a before and after.
Seek the truth.
I looked them up. Per their website it will be an Appraiser for the 1004D. But they better not be liable for the entire report. Just completion of the work or construction. I never do a final on another Appraisers work for liability issues.
In the past week, 20 more appraisal licenses disappeared in CA. At the current rate, our state is on a pace to lose over 10% of all active licenses in the next year. The beginning of the landslide is upon us. Appraisers are leaving the profession in record numbers, so the writing is on the wall. PAREA won’t fix it, so the AI modeling better get a whole lot better in a hurry. As for me, I’ve focused my practice on private party work for the past several years, and won’t bother to learn this new system. It’s useless to my clients, and will only help populate future modeling so appraisers won’t be necessary later on. Good luck to you all, but I’m taking a pass on this garbage. Thank God for rental income.
I predict when it drops to 1 appraiser left in the entire country he or she will finally decide to go on strike for higher fees.
It’s just… Why can’t they stick with separate forms for clearly defined scope of work? The concept that appraisers won’t know what is needed ahead of time, and will not able to come prepared with a pre printed form they could fill out with a pencil and paper, that’s one primary problem here. We need to be able to print out exactly what the final form and all elements of the form will look like, before we step out for an inspection. On paper! The grid adjustments need to be all contained on one single page. Reviewers need to be able to readily observe net and gross adjustment percentages.
Check out this photo… I call it the double take.
Please disclose in the appraisal report how many hours it was from the time you last ate until you completed every step of the appraisal.
https://youtube.com/shorts/U4L20Ixjxb8?si=KPwx8CvlkIUMhoCg
Having multiple streams of income like appraising, real estate sales and even mortgage lending will allow independent appraiser to prosper in any market. 30 Years ago I gave up on trying to survive on one income as an appraiser .
As an appraiser I don’t use any of the sales I have closed as a broker in one of my appraisal reports. Since next year will be crazy busy with new loans, I have decided to complete a MLO Mortgage Loan Originator license which is approx 21 hour course which can be under the Dept of DRE or a license under a loan mortgage loan company. So you don’t need a real estate license to make loans. The course I am taking should be completed before the holidays so I can have another stream of income. Tom Hopkins a real estate guru from the 1970’s use to say his mantra “I must do the most productive thing at every given moment”. That has always been my mantra after meeting Tom Hopkins and shaking his hand. 2025 will be busy with new lower mortgage rate loans
At some point they will have amassed enough data we appraisers have given them and then they’ll say…”hey thanks but we don’t need you anymore now”.
I’ll be retired, will just sit back and watch this f train as it crashes. LOL
And then you can drain your retirement funds, assisting your younger family members and community associations in navigating an artificially inflated housing market. Good luck sitting on the sidelines. You’re going to need it. Appraisers bragging about impending retirement may not quite realize they’re the most vulnerable of us all. Enjoy your elevated taxation.
I 100% agree. Here is the link for their overview of the new form. https://www.fanniemae.com/course/singlefamily/uadtrainingfiles/story.html
They want specificity regarding views, water type/ownership. They are absolutely drilling down for finite data collection for algorythms IMHO
So just curious, how will these changes impact private sector work? Will the GP forms still be the best option for private non lender work?
The primary difference being people can read and comprehend the old 1004 and the GP form, for reasonable laymen interpretation of what’s happening and what the appraiser did. The grid is a mathematical equation which allows the components of a home to be compared to another home, with individualized adjustments spread down the line across all the major categories; size, type, age and effective age if wanted, room counts, exterior features, interior quality, build quality, land quality if needed and land size, views, locational benefits or an alternative obsolescent consideration either curable or incurable, additional free lines for special items of concern such as perhaps pools, barns, outbuildings, special use, etc..
All tied up nicely with a net/gross percentage of adjustment indicator at the bottom of the equation which clearly shows the total difference between properties in terms of simple percentages. The unadjusted sales price on top, the adjusted sales price on the bottom. The appraisers reconciled opinion at the end. Right across the line just like standard linear math, classical and easy to understand. Simple yet brief free writing blocks to generally explain the standard process, reference to more complex analysis addenda. Simply genius. Real property becomes a math equation when using the GP or standard 1004 form appraisal grid. Price is not the same thing as value.
Who thought it was a good idea to spread this mathematical expression across ten different pages and omit the gross percentage indicator? The new forms are a disaster in the making. If you do use the new forms a good suggestion will be to also fill out the classical form and include that as an image or pdf attachment within your report so people can understand what is actually happening with adjustments on one or two single pages. One should not have to posses advanced mathematical skills to either develop or read appraisals, although that is a side benefit if one does.
I really don’t think it is going to change much of anything. Honestly private work should be done without a form and in a narrative format to remove the unnecessary data points that don’t impact what the market is doing and why. If you insist on using a form, create your own through word, or adobe acrobat. I get that it is time consuming, but better is just that, better. Nothing good is free and nothing free is worth having. GP forms serve a purpose, but going the extra mile and being that guy/girl that does the work that others are envious of should be a goal we all have, even if the other industry participants do not. We all know the feeling when we see crap work to review, or someone complained about and we know what it is like when we see top notch work. Do yourself a favor and do top notch work. Finally, the new reports have all, or very similar disclosures as the legacy 1004. Total is not going to change the GP forms and time soon, if at all. There is no money in it for them.
Bedazzle the reader and non qualified non licensed reviewers with mass statistical data. Sadly the industry has already embraced these trends. If I were to train an appraiser I’d walk them up to a home, ask them to write down a list of all the homes individual components in general categories, then place a value figure on each category. Not because I care if they had the answers right. But rather to introduce them to the concept of distributed proportional allotment which leads to credible line item adjustments. The parts make the whole. And when your comps are more narrowly matching, there is less need for as many adjustments or as large of adjustments because they’re closer matches from the start.
In the mail last week, a flyer I saved; TrueTracts: ‘Somewhere an appraiser is wasting their life on another avoidable revision. New gse requirements starting feb 4th. ALL APPRAISERS must support market trends and time adjustments with clear and documented analysis. Don’t worry we have your back. TrueTracts empowers you to define your market with data-driven precision, visualize comprehensive market trend charts, and apply revision-proof non-linear time adjustments in minutes.’ / Then there is a scatter chart with at least two thousand dots which will be the same data set the alleged revision-proof adjustments for size, room count, and all that will come from as well. Newsflash to FNMA, the MC Form does the same thing just with better localized data if the appraiser actually did their job appropriately with limited MLS research to hone in on the local market. The is why the MC form was developed in the first place!
I can personally attest to FHA reviewer and UW at the agency level have all gotten drunk on the regression analysis agenda. If you have one or more variables that are unknown, with no known standard deviation, you can not properly run regression analysis, but that is the trend and FHA just tell you plainly, use software to arrive at your adjustments. It no longer matters what the consumer is actually doing – just put a number on it and show how the number was arrived at. 2 + 2 = Fish; therefore, the adjustment for patios and decks is fish. See this is how they want it done. If there is a line item, just throw a few scatter plots at it with an R-coefficient of 0.01 (if your lucky) and say ta-da. I have an adjustment. NO need for sensitivity analysis on if a patio should be adjusted for with no means to verify the thickness of the pour, cracks, actual materials used, etc. Screw the market and it’s tastes, what does regression or the software say – that’s what they want served up on a silver plater. If not, you get love letters with no ability for a rebottle. They will talk over you, misdirect you with some other mistake, but not deal with the real issue of getting drunk on big data and not having a clue of what said data is saying, if anything useful at all. I’m cooked.
Quite right. Regression and mass data analysis is not what residential appraisers should be doing for individual deals. Yet, that’s where the industry is headed via an over emphasis on automation. Sorry, I edited that post before I refreshed the page to read your post. Trying to take up less page space lately unless that’s research detail orientated. Thanks.
This is the ever impeding violation of appraiser independence when it comes to writing an appraisal report. It becomes a box filling exorcise rather than an expression of market data and intricacies of why a house is placed at any given market indicated value. We are not producing opinions. We are showing and documenting market indications. There is a huge difference and the sooner folks understand the report is suppose to evidence based adjustments from the market data and not some wasteful showmanship of techie tools, the better the entire industry will be. Not sure how long he battle will last before the is an MBS requirement, regardless of potential misleading results, or data cancer takes the top two out.
I think what is taking place now is the same as before licensing existed. Appraiser either got licensed or quit saying its too hard. Its just a shaking out of the old appraisers to another added requirement of licensing.
I am not a fan of the future URAR 3.6 Report with 20 plus pages of report to the present 6 page urar report.
What if these regression tools are used by appraisers coving the Los Angeles Fires?
Probably for insurance purposes and may or may not be urar form reports.
I am sure that regression tools are being used as appraisers have to be busy there with the amount of destruction to entire neighborhoods of homes.
Since Covid 2020 to the present, I use Alamode Titan Analytics on every report on properties from 1 million to 10 million in value. When the appraiser is able to control the MLS export variables such as a one mile radius search (more or less) , a range in living area, a time period and see what the trendlines look like in the subjects neighborhood. I can create 12 statistical charts and scatter graphs.
When going to court for legal purposes to explain how you appraised the property and the methodology used is a lot easier with Titan than walking into court with a report and single addenda page with a 3 inch by 4 inch single graph spanning a 10 or 20 year time line showing market conditions. Who are you going to believe?
If you look at the regression analysis results in each report, they are unique to the neighborhood around the subject property and no two reports are the same unless all the homes in the area are the same living area. I personally like the 12 statistical charts and graphs in my reports
Still I am not looking forward to the urar 3.6 and am presently being asked by lenders if i will join the new urar 3.6 club. Can say yet, I do not know.
I wouldn’t worry to much about the change in the report and here is why: 1. If we discuss what the highest and best use it, to do it correctly, it will not fit in the tiny butt window they gave us on the legacy forms (1004 and so on), instead of have a page or two for the development of the HBU, you now have an expandable form that will fit ALL of the HBU statements and analysis right there in the HBU section. This way the UW doesn’t have to hunt down this statement. 2. This will also be consistent with Comparable Selection, Market condition and trends section, along with the final indications of value. I’m not sure how much longer the report will be, but not that much. Yes there are several stupid things they took away and added, but my guess is they will be updating this report, on the file, during the trial runs.
The zoning was going to be a huge add-on until someone realized the market couldn’t care less about the zoning when the purchase a house. They just look at the damn house and decide if they want it. Yes there are some folks that purchase a house for future development, but the MBS has an effective date and we don’t look into the future. This is just another step in the adaptation of the MBS requirements. There is still missing information in the UAD 3.6 that we appraisers are going to fill in. Some of it, I assume, will no be about the percentage of adjustments on net/gross. This will assist in the “more, less, or no weight labels” they want us to report on. my 2 cents.
Data cancer is evident in many market segments today. Elevated pricing scale take hold in large neighborhoods. In such a large body of housing, highest and best sales do happen, and everyone chases those values. Similar to the 00’s housing bubble blow up and comp searches. I recall a mortgage broker telling me directly; We only want highest and best comps, the condition of the property does not matter. Refried refi’s. Maximum loan production volume.
Compare equivalent homes elsewhere in more isolated settings or somehow apart from the larger groups of housing. One may often find that value metrics such as ppsf total, basic high/low ranges and pricing variances are lower. Why? Because the automated systems could not follow this classical predatory broker approach of automatically reaching for highest and best sales. Although the market pumps upward, it does so at a slower pace due to the limited volume of housing and subsequent lower sales volume which rides alongside a smaller quantity of peak sales high price data. Enter mass aggregate data tools. The great equalization, all data considered in one massive data pool.
Spencer, like your explanation on documenting market indications, documenting adjustments does not need to be a showmanship exercise of technical tools. Also like Flash’s take on detail orientated support, people really do find themselves bewildered by complex data and graphs, often less likely to challenge conclusions. That’s why I like simple data presentations, a simple grid, limited data, so everyone can understand the analysis and market in simple basic terms. The tech programs use too much data from too broad of a data pool, creates constantly higher value outputs. Happening in avm utilities today, the broad reach and excess pool of data is providing equalization to values as a natural consequence of mass data aggregation.
Getting harder to find deals as avm utilities and waivers rubber stamp most sales. Enter an increased volume of default management related properties and liquidation walk away sales as financial distress grows. The people no longer willing to accept loan mods, tacking everything on the back end, accepting current market terms. They want out. From a personal economic perspective, they’re paying too much, the benefit of an average home is not there. A half million dollars for a starter home in Colorado? An entire generation of younger Americans effectively priced out. Older Americans with average income, immobilized. Higher density housing projects or forcing ADU zoning allowances is not solving anything.
How do new forms fit in? The CU system failed to identify and limit poor work product injection into the database. Paid no attention to the known facts of a disproportionate small group of appraisers providing the majority of gse appraisals. Allowing a minority set of the most aggressive automated focused appraisers, in coordination with predatory junk fee skimming amc’s, to drop the majority of report data into the Collateral Underwriter automated system and database. Their influence over rode the quality time consuming individual appraisers data. Enter waivers which provide the rubber stamp based on the flawed data. Peak sales never stop hitting the market, the avm’s incorporate that data, then re use the data. Data cancer is now self sustaining.
Managers think a more detailed set of data will somehow provide corrections to the systems current lack of reliability. Enter an expanded urar form. Identify the real problem; too many experienced appraisers whom know how to perform their job with precision and time consuming attention to detail can not or refuse to provide GSE’s service because of appraisal management companies, imbalanced assignment trends, inadequate compensation. A better goal than appraisal modernization or expanded forms with more data would have been to reign in the amc’s, to incentivize a return of at least 80% or more of all licensed appraisers to be constantly dropping more reliable data into the CU system at all times. Like before the amc’s took over. Like before the separation from mortgage loan production rule stopped appraisers from creating client and business engagements with licensed mortgage brokers directly. From the times of equal two way accountability; a licensed appraiser, and a licensed mortgage broker whom would order directly from their appraisers. Like before demins rose which exempted most loans under $400k from requiring an appraisal. When almost everyone whom sought a loan mod, refinance, or origination loan approval regardless of their LTV or risk score; they all required full service human appraisers.
My vote remains for something similar to the IVPI, and VA panel, equalized distribution of report requests to all panel appraisers, round robin distribution. If an appraiser is good enough to be on a lenders panel, they should expect a fair share of work. Follow the original spirit of DF Reg Z on Appraiser Independence, Customary and Reasonable appraisal fees, forcing a cost plus model on amc’s, or busting them out with fines if they fail to comply.
Who thought that an automatic valuation model which sourced data from two hour appraisers whom outsourced or automated their working process would be a good idea? Many from the outside looking in see the problem, they don’t understand the mismanagement of the industry. Mistaking the constant differences in work product quality for racism or intentionally misleading activity. Ordering independent review appraisals for gse lending, from appraisers whom refuse to work for gse’s in the first place. Relying on lender sourced reviews, when lenders whom use amc’s only have access to less than one in four licensed appraisers, and may not even be using full service appraisers in the first place. Does not compute. There is no normal industry standard anymore. The workable industry standard was full service appraisals all the time no exceptions. By the time the FHFA released the CU data for public scrutiny a decade later, data cancer had already overwhelmed the system, three out of four appraisers had long since boycotted the amc industry, of those only a small portion completed the majority of amc work, over half of all licensed appraisers no longer were willing to complete GSE related appraisals.
Game over. Appraisers can no longer provide market corrections or meaningful safeguards in most instances. The requirement for the constant presence of full service independent appraisers on nearly everything was the most important safeguard against over valued housing. There is no working substitute for meaningful independent checks and balances applied at all times. There will be no technical solution or regulatory solution. Revitalizing the appraisal industry and safeguarding housing price stability only requires a few simple solutions. Require full service appraisals on the majority of all origination. Require lenders distribute requests more fairly at consistent fee rates for all available appraisers. Eliminate amc junk fee billing. Watch one hundred thousand newly licensed appraisers enter the field in the next decade. That’s called small business growth. An opposite model of central control and automation which as decimated the industry allowing predatory interests to steer our nations housing interests once more. ‘Central planning never works.’
Tried to edit this down, think I actually made the post longer… Oh well, the edit timer box is ticking out. Hopefully someone is listening. Thanks guys.