Appraisal Institute Counters Flawed Appraiser Bias Narrative Excerpts: In reality, appraisers have a great story to tell, but we have a long way to go to refocus the terribly flawed “appraiser bias” narrative onto facts and science. Last week’s email from Cindy Chance, the CEO of the Appraisal Institute, marks an important and long overdue shift in the organization’s approach to addressing accusations of bias in the appraisal profession. For too long, appraisers have faced sweeping claims that their valuations are biased against certain groups, despite appraisers’ ethical standards, rigorous t ..read more

Desktop Appraisals: Who, When, and Why Excerpts: The ability to identify property characteristics without a personal inspection is not a new concept. Retrospective appraisals, drive-by (exterior inspection) appraisals, and valuations from plans and specifications, are all valuation assignments where an appraiser develops an appraisal opinion without personally inspecting the property. Similarly, while not identical, appraisers generally use the cited sources above to identify the physical characteristics of comparable sales in their appraisals. Thus, it’s fair to say that identifying the physi ..read more

Why an Organized Workfile is Your Best Defense By Craig Capilla Excerpts: We all know that the Uniform Standards of Professional Appraisal Practice (USPAP) set the baseline for what must be included in a workfile. We’ve all also heard ad nauseum that USPAP is a minimum standard. Still, all too many appraisers seek only to meet that minimum standard and little more. That’s where the trouble begins. Particularly when speaking about the workfile, for my money, the most dangerous words in USPAP are “or references to the location(s) of such other data, information, and documentation.” There it is ..read more

Functional Obsolescence Can Be Challenging By McKissock Excerpts: For appraisers, functional obsolescence can be a challenging concept because the elements that influence property values may not be obvious or immediately apparent. To help you better understand what it means and how to pinpoint it, we’re exploring some examples, the different types of functional obsolescence, and how it can influence property values. Additionally, we’re sharing insights from appraisers who answered our survey question, “When dealing with functional obsolescence in real property appraisal, what aspect do you fin ..read more

Dos and Don’ts of Selecting Appraisal Comps Excerpts: Follow these dos and don’ts to help ensure that relevant comparable sales are established: Here are a few topics Do welcome relevant comparable sales from real estate agents Don’t limit the number of comparable sales to three Do consider objective characteristics when selecting competing neighborhoods Don’t use appraisal comps based on price As an appraiser, you must provide an unbiased opinion of value. Selecting comparable properties based on price may inadvertently favor properties within a predetermined price range, rather than those ..read more

How To Appraise Rural Properties Excerpts: Appraising residential properties in rural areas can be both challenging and rewarding. Unlike the standardized expectations of urban and suburban properties, rural properties often present unique characteristics that require a nuanced approach to valuation. Whether you’re a seasoned appraiser or new to the field, having a better understanding of rural properties is essential for providing credible appraisals. In this guide, we’ll explore what defines a rural property, the challenges appraisers face, reasons for conducting rural appraisals, strategies ..read more

Is it a problem to remove all bathtubs in a house? By Ryan Lundquist Excerpts: I’ve been asked this question twice this week. Is it a problem to remove the tubs from each bathroom? People planning a remodel asked if it was a big deal or not to only have a walk-in shower in each bathroom. Here are my thoughts, and I really want to hear from you too. Anything to add? It’s not a black and white answer: There’s not one black-and-white answer that applies to every house, price range, location, or market. Bottom line. But backing up, part of the fun of working in real estate is figuring out how to a ..read more

What Are the Top Luxury Markets in North America Right Now? Excerpts: Where are the hottest high-end real estate markets? Whether you’re looking to specialize in luxury home appraisals or you’re simply reading up on the latest market trends, you may want to pay attention to areas where luxury homes are in high demand. According to the Institute for Luxury Home Marketing’s February 2024 report¹, the single-family luxury home segment is showing promising signs of growth. Both inventory levels and new listings increased significantly in recent months, leading to an 18 percent increase in sales an ..read more

Historical Properties and Their Unique Appraisal Approaches Excerpts: Appraising historical properties involves a complex interplay of factors, making it a specialized field within real estate valuation. This article provides an insight into the appraisal process of historical properties, emphasizing the role of market data, potential buyers, specialized databases, appraisal methods, and the significant impact of preservation restrictions. The appraisal process begins with a thorough analysis of market data, focusing on sales of properties that share historical or antique characteristics. This ..read more

How does the FHA define appliances? By Daniel A. Bradley, SRA, CDEI In September of 2015, FHA revised Handbook 4000.1 to provide a specific definition, which includes: Refrigerators Ranges/ovens Dishwashers Garbage disposals Microwaves Washers and dryers It’s important to note this does not include garage door openers, swimming pool pumps, intercoms, sound systems, and security systems. How do appraisers consider appliances? FHA Handbook 4000.1 also clarifies when appliances are required to be operational by stating, “Appliances that are to remain and that contribute to the market value opinio ..read more