Comp One Blog - Your Local Expert!

The New Format Is Here folks.  The mandated transition date is 11/02/2026 but now is ramp up time.  This is a big deal.  I repeat: This is a big deal.  I've been working as an appraiser since 2002 and this is the most significant change I have seen in my time in this industry.   Us appraisers are getting up to speed, and many have completed their first reports by now, myself included.  If you are an agent, now is the time to familiarize yourself with the coming changes.  Here are a few highlights: 

-The appraisal report will be significantly more detailed, and the appraiser will be spending more time at the property for the inspection.  

-It is important to understand UAD quality and condition ratings.  Now, rather than just an overall quality and condition rating the appraiser will be providing an interior and exterior quality and condition rating, and then an overall quality and condition rating.  Understanding what these ratings are, how they impact value, and how your particular property is viewed will be essential for you in providing the highest level of service to your client.  See the document at this link for more information:  https://singlefamily.fanniemae.com/media/42396/display

-The turnaround time for the appraisal will increase.  We are entering a period where not only are appraisers learning a new report, many may be trying out new software or even multiple different softwares.  With the extended length and detail involved in the report plus the learning curve with a new software (or even the same software the appraiser has always used), there will be a period of time where a shortened contingency period may not be practical.  Some contingencies may be missed, some earnest money may be lost.  My advice is to allow extra time in the coming months for due diligence, etc and add a healthy dose of realism to your overall timeframes.  From personal experience I can say that my first report took much, much longer than a typical report, or even a typical complex report, not to mention the extended wait times on the two support calls I had to make including the one for the lender requested revision which took maybe a half a day in itself.  Lenders will have their own challenges with learning this new report, and many issues can come up in just getting to the point of the lender having an acceptable report to upload to the Uniform Collateral Data Portal.  

-Appraisal fees are going up, in general.  Some of this may level off a bit as the new normal establishes itself, but this report is significantly more detailed and time consuming which equals significant momentum in the industry towards higher fees.  

-This does not affect private work (pre-listing, cash purchases, divorce, estate, tax appeal appraisals) and non-conforming loans.  These can still be done on the old forms or in the old format.  

-Let's play nice.  This will be a challenging time for all industry participants, and particularly for appraisers.  Your patience and understanding is appreciated as we all navigate these changes together.

 

Questions about how to better serve your client in light of the coming UAD 3.6 transition?  I'm always happy to talk.  Call anytime at 404-245-7577

Cameron Horne, GACR253993
Comp One Appraisal Services, Inc.

  

A recent article in Business Insider which was included in the Apple News Feed is causing some buzz in the appraisal world.  It details the controversial role played by Appraisal Management Companies (AMC’s) in the business.  It’s worth reading but is now behind a paywall.  AMC's have positively contributed to the restoration of appraiser independence since their introduction in 2010 following the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act, but there are some AMC’s which engage in dubious practices.  These include assigning appraisals to the lowest bidder and taking an exorbitant cut of the fee.  Settlement Statements generally note an “appraisal fee” but don’t detail how much the appraiser was actually paid and the portion of the fee that went to the AMC.  Appraisers should be paid fees that are “reasonable and customary” for their market, and, in my view, a reasonable target for AMC’s is around 20% to 25% of the total fee paid.  If this fee is significantly greater than that, there is cause for concern.  I could digress as to my experience in the appraisal space prior to 2010 and my experience since.  Certainly, lower volume has put pressure on all players in the appraisal industry, but it remains that most of the appraisal fee should go to the appraiser on the ground.  The article proposes that the appraisal fee should be broken down in the settlement statement to note the fee that went to the AMC and the fee that went to the actual appraiser.  I think this separation would be a good practice and provide greater transparency to the consumer. 

Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we are the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading!  

Got an appraisal issue or question?  Call my Appraiser On-Call For You Hotline at 404-245-7577.