New USPAP Q&As published March 6, 2025

[Joe Flacco]

Yeah, there would be a lot of fraud without appraisals. It is needed more for fraud than uneducated buyers.

 

[Sadie]

So in our next USPAP update class, we will spend $250 and 7 hours learning why "because" is not an adequate support for an adjustment.

Its because 'because' is not uncommon for support.

 

[Sadie]

That is all fine when there are actually good comps available, but sometimes when appraising a proeprty in a extremely rural area, there may not be any good comparable sales. As I tell my underwriters, sometimes on an extremely rural appraisal they only thing the appraiser can do is to select the least bad comparable sales due to a lack of sales data.

or even any area with few sales. That is when your experience comes into play.

 

[Sadie]

maybe so, but in local Superior and Circuit courts adjudicating real estate issues, where most appraisers would be found, the above does not apply.

Judges make the rules in their courts; they always have and always will.

Its been my experience that when there is a difference in appraised values, the judge splits the difference, regardless. Of course , this is in things like divorce courts, etc.

 

[J Grant]

Two appraisers here assume most SC prices are "market value" - but we don;t all believe it - I like my appraisal to show me the market value and then I compare their SC price and if it is bracketed by my comps and the adjustments, then it is MV - otherwise a price can be below or above our MV opinion.

 

[Sadie]

The subject has all new windows within the past year, whereas comps windows are fully functional but original and range from 15-25 years old. While no quantitative adjustment is made in the sales comparison grid, the appraiser considers this qualitatively when reconciling a final opinion of value.

But does your market recognise the difference? Just because you think something should make a difference, can that be supported? Sometimes markets don't regonnize something you think they should.

 

[NC Appraising]

Its more of when you need an adjustment rather than support, Experience counts for a lot in the decision making process. USPAP has always has the requirement that you use recognized methods and techniques. Experience does not fit that definition. Also each person's experience is is unique to the individual so there is no way for a user to logically arrive at the same result as you. Its basically saying "because I said so" as an support for an adjustment or a lack of one.

Statistics can lie. Stats can be manipulated.

Appraisal data/results/analysis can be poor, misleading, lacking, unverifiable, few or undetermined.

That's were the appraisers experiance comes in.

I'll take a re agent experiance that has been selling homes in the market for 20 years over a hybrid appraiser running data any day.

They can show you the data...but more than likely cannot tell you why or how and more than likely are unable to tell you when the Dara is BS or not.

I've been there to many times. The data was bad or wrong, but based on my experience for the area, I knew how to proceed and how to handle it.

 

[timd354]

Was the user satisfied.

What do you think? Some entity in the secondary market went through the not inexpensive process of putting the loan file through a QA review and ordered a field review as a part of that process and the field review came back with a variance that was >20%, which was due mainly to the manipulation of the comps (the appraiser failed to use numerous recent comps of very similar new homes that were litertally within 3/4 of a mile). Do you think it is possible that the originating lender was forced to repurcahse this loan? Do you know how much of a discount that the originating lender has to eat when they resell a repurchased loan on what is called the "scratch & dent" market for mortgage loans?

 

[TerryRohrer]

Statistics can lie.

Probably the stupidest statement ever uttered by an appraiser, and many use it. Then defend made up sh%t in the next breath. No wonder there have been no cumulative gains in appraisal practice in 30 years. Stuck on stupid.

Stats can be manipulated.

Can you name a single appraisal technique for which this is not true? It is amazing how willing appraisers are to demonstrate their ignorance. Those who never made any effort to comprehend "statistics" are the most sure it can't be useful or reliable, then go on to espouse the grand superiority of sensitivity analysis and how a range in values is superior to a point value while opining as to a most probable price. Stuck on stupid (SOS).

 

[Joe Flacco]

What do you think? Some entity in the secondary market went through the not inexpensive process of putting the loan file through a QA review and ordered a field review as a part of that process and the field review came back with a variance that was >20%, which was due mainly to the manipulation of the comps (the appraiser failed to use numerous recent comps of very similar new homes that were litertally within 3/4 of a mile). Do you think it is possible that originating lender was forced to repurcahse this loan? Do you know how much of a discount that the originating lender has to eat when they resell a repurchased loan on what is called the "scratch & dent" market for mortgage loans?

Tim, the question is why did the lender choose that appraiser?

Every profession has good and bad.

All of these complaints should be fixed by correcting panel management and engagement practices. You are not going to fix it by trying to make bad appraisers good.