New USPAP Q&As published March 6, 2025

[Joe Flacco]

I disagree. I think the main issues with unsupported adjustments is that many appraisers do not understand their adjustments bear relationship to the range, and ideally tighten it to even 10%, even more in homogenous segment. From time to time I see wide ranges due to under adjustment and using adjustment lists. It is a very clear problem, and if our numbers are going to shrink these are the appraisers that need to be expelled.

I have seen that too actually. The appraisal when I bought my house was like that. Little tiny adjustments. But I think he picked the comps based on sale price so the range ended up not wide anyway.

 

[George Hatch]

Overfitting. The $1500 adjustment for the fireplace can exist, but that doesn't mean that it does exist among these sales.

It makes me crazy to see an SC where the appraiser is clearly trying to get each adjusted value indicator to the same number. It implies that they're trying to perfect an inherently imperfect dataset.

 

[Joe Flacco]

Adjustments can be important but at the end of the day, selection of comparable sales and the reconciliation of the sales comparison approach is really what residential appraisals are about.

 

[glenn walker]

Overfitting. The $1500 adjustment for the fireplace can exist, but that doesn't mean that it does exist among these sales.

It makes me crazy to see an SC where the appraiser is clearly trying to get each adjusted value indicator to the same number. It implies that they're trying to perfect an inherently imperfect dataset.

Our Tech Engineer and his Flux Comparator on here claims all adjustments should reach the same number. Just ask him....lol

 

[Mejappz]

The path to improving residential is not USPAP nerds doing the GSEs bidding. It is GSEs and lenders incentivizing good work instead of other metrics.

I completely agree. The focus should be on incentivizing quality work rather than adhering strictly to rigid frameworks or metrics that may not prioritize the actual value of the work being done. By encouraging better practices and rewarding quality outcomes, the GSEs and lenders can drive meaningful improvements in the residential space. However, as we've seen in this discussion, when the powers that be dismiss or downplay these ideas, they often resort to vague remarks about "user needs" or "market demand," completely sidestepping the core issue. If the focus isn’t on hiring qualified appraisers, compensating them fairly, and allowing them the time to do a thorough, quality job, then all the other metrics and measures are essentially meaningless. No system can thrive without a strong foundation of skilled professionals who are incentivized to do their best work. Without those basic, essential elements in place, everything else becomes a bandaid on a much larger problem. And one of the key problems is USPAP itself.

 

[Tim Hicks (Texas)]

Adjustments can be important but at the end of the day, selection of comparable sales and the reconciliation of the sales comparison approach is really what residential appraisals are about.

When your truly comparable sales are limited and few, adjustments are a big factor.

 

[Mejappz]

By the way, here is the room where TAF members stayed during last week's 'CARE' conference in Clearwater. I'm sure a lot of important work was accomplished. LOL

 

[djd09]

so when the gse's waive the appraisal...how do they come up with their adjustments? or is the lender's unlicensed mortgage broker appraiser just basing it on experience?

 

[timd354]

Adjustments are, by definition, quantitative.

What copy of "The Appraisal of Real Estate" do you own? I am in the house and not the office, but the copy in the house is the 10th. I don't think it obsolete yet. And on page 384 clearly states under "IDENTIFICATION AND MEASUREMENT OF ADJUSTMENTS" it lists 6 Quantitative methods and 3 Qualitative measurements.

Certainly, I understand that USPAP is a pointless exercise and complete malarkey in light of FANNIESPEAK being the language of the residential appraiser. But if the authors of USPAP were alive today, and USPAP really ruled the industry and not FNMA, USPAP clearly says we are supposed to be familiar with the document thus, must be aware of, understand, and correctly use recognized methods and techniques to produce a credible appraisal.

For you to say it is "flat wrong" to use qualitative methods smacks of nonsense to me.

Terrel, I have never argued that the use of qualitative methods and analysis is wrong...in fact I acknowledge that qualitative analysis is a vital part of the appraisal process. However, whenever an appraiser makes an adjustment (a change) to the sale price of a comp to account for the difference(s) in property attributes between the comp and the subject property, that is a quantitative adjustment. Now it is possible that the appraiser used qualitative analysis to inform his opinion on the amount of the adjustment, but the adjustment itself is quantitative.

FYI, the my version of the The Appraisal of Real Estate is the 15th edition and somewhere around here I still have a 13th edition....unfortunately I don't have a copy of the 10th edition handy. Also, my copy of The Dictionary of Real Estate Appraisal is the 7th edition for your reference.

In any case, here is what the 15th edition of The Appraisal of Real Estate has to say on the same subject:




The key language from the above is "what some practitioners call 'qualitative adjustments' are not not actually numerically adjusted. The analysis of a qualitative difference simply provides an upward or downward indication of the effect of the element."

This supports my view that qualitative analysis is not an adjustment and that an adjustment made to the sale price of a comparable sale, is, by definition, quantitative. However, that does not mean that I do not think that qualitative analysis is a legitimate and vital tool in the appraiser's toolbox.

This disagreement stems from the fact that some appraisal practitioners do not have a good understanding of the terms "quantitative" and "qualitative" or "adjustments" as those terms apply to the appraisal profession.

 

[Joe Flacco]

Terrel, I have never argued that the use of qualitative methods and analysis is wrong...in fact I acknowledge that qualitative analysis is a vital part of the appraisal process. However, whenever an appraiser makes an adjustment (a change) to the sale price of a comp to account for the difference(s) in property attributes between the comp and the subject property, that is a quantitative adjustment. Now it is possible that the appraiser used qualitative analysis to inform his opinion on the amount of the adjustment, but the adjustment itself is quantitative.

FYI, the my version of the The Appraisal of Real Estate is the 15th edition and somewhere around here I still have a 13th edition....unfortunately I don't have a copy of the 10th edition handy. Also, my copy of The Dictionary of Real Estate Appraisal is the 7th edition for your reference.

In any case, here is what the 15th edition of The Appraisal of Real Estate has to say on the same subject:

View attachment 97625


The key language from the above is "what some practitioners call 'qualitative adjustments' are not not actually numerically adjusted. The analysis of a qualitative difference simply provides an upward or downward indication of the effect of the element."

This supports my view that qualitative analysis is not an adjustment and that an adjustment made to the sale price of a comparable sale, is, by definition, quantitative. However, that does not mean that I do not think that qualitative analysis is a legitimate and vital tool in the appraiser's toolbox.

This disagreement stems from the fact that some appraisal practitioners do not have a good understanding of the terms "quantitative" and "qualitative" or "adjustments" as those terms apply to the appraisal profession.

It is an adjustment Tim, just not a numerical adjustment.

You really need to stop with this. Making yourself look foolish. What you are doing is similar to arguing on a science forum that the earth is flat.