Lake Lanier Blog

Big Changes Coming to the Appraisal Industry in 2026: What Homeowners, Realtors, and Lenders Need to Know

A major transformation is coming to the appraisal world starting January 2026. A brand-new appraisal form—known as URAR/UAD 3.6—will be required for all loans backed by the GSEs (Government-Sponsored Enterprises). Other government programs such as HUD, VA, and USDA are also expected to adopt these new form requirements. Broad production of the form begins in January 2026, full mandatory use is scheduled for November 2026.

What's Changing?

The biggest change is that one universal form will now be used for all 1–4 unit residential properties, streamlining the appraisal process. It will not apply to land-only or commercial properties, which already use different forms.

Once the Appraiser begins completing the form, it will dynamically adjust to fit the specific property type. This flexibility is designed to improve reporting consistency across all property types.

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What Does This Mean for Homeowners, Lenders, Realtors, and Buyers?

There will definitely be a learning curve for all parties involved. This new form includes more detailed data points, which means the appraiser must gather more comprehensive information about the home and its key systems.

Here’s how you can help streamline the process:

• Provide the year and estimated cost of upgrades, renovations, and additions

• Share a plat map of the property, if available

• Give details about major systems: HVAC, plumbing, electrical, etc.

The new form requires Appraisers to objectively assess the condition and quality of a home’s components using predefined rating scales. This reduces subjective commentary and ensures more standardized, data-driven reporting. For example, rather than describing the remaining economic life of a system in a narrative, the appraiser will select from predefined options.

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Mobile Appraisal Technology: The New Norm

Appraisers will now need to complete much of the form on-site using mobile devices, including creating digital sketches of the property. While not officially mandated, mobile data collection will become a practical necessity to meet the new standards efficiently.

This transition will be especially challenging for veteran Appraisers who are accustomed to traditional reporting methods. Sketching large or complex homes on-site using a mobile device can be time-consuming and error-prone. Items missed during the inspection may require a return visit, which is inefficient and frustrating.

Many long-time Appraisers are choosing to step away from lender work due to these changes. As a result, more experienced Appraisers may be replaced by less seasoned professionals. While fresh perspectives are welcome, the loss of deep industry experience can impact the accuracy and credibility of valuations.

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Increased Time, Complexity, and Liability

This new form will require additional time for completion, more explanation to clients, and carries greater liability for the Appraiser. As a result, higher fees for appraisal services should be expected.

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What You Should Do

Be aware that this change has been years in the making—and it’s coming soon. If you're involved in real estate transactions, it’s essential to work with an Appraiser who:

• Understands the new URAR/UAD 3.6 requirements

• Is comfortable using mobile technology in the field

• Has the experience and insight to navigate complex properties confidently

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We are ready for the new reporting format and are here to service all your Real Estate Appraisal Needs. 

ROV'S have been around for years. They are known as reconsideration of value. When the borrower, lender or the Realtor feel that the value is too low; as in below the sales price or refinance value needed; (they never complain about a value that is too high) they can submit a ROV and provide other sales for the Appraiser to review and consider which may impact value. 

Here is the problem.....You have NON-Appraisers telling the Appraiser to consider other sales than the ones they already researched and provided in the report. What you may not know is that Appraisers review MANY other sales before they hone in on the best sales that are truly representative of the Subject's value. This  ROV process is like the TAIL wagging the Dog. I don't like your value so here are some other sales to review so that you can raise the value of my home. Sounds like undue pressure to me!

THE NEW RULES FOR SUBMITTING ROV'S ARE AS FOLLOWS:

1. Before the lender sends off the ROV to the Appraiser, they MUST review the ROV and determine IF it would make a difference in the appraised value AND more important is that the ROV must state why the sales they provided are BETTER than the ones the Appraiser used and why they feel the appraisal report is flawed or what about the sales used in the report are not comparable. 

2. The ROV can only include up to 5 Additional sales to review

3. There is only ONE ROV allowed per report. 

So if you plan to submit a ROV, please know that it needs to have valid support behind it. You cannot just supply sales that are HIGHER than the appraised value in order to get a higher value. That will not fly!

Lenders must provide the ROV form and option before and after the Appraisal by November 1st, 2024. This will likely slow down the entire process which will not be good for all parties involved. 

Appraisers cannot charge more money to review these ROV's and it takes time to do these reviews. So Lenders and Borrowers need to follow the rules and not submit ROV's unless they have valid reasons why the Appraisal is lacking in some form or another. 

Thanks for stopping by!

READ HOW APPRAISERS ARE MEASURING HOMES DIFFERENTLY

Attention all Realtors, this is very important. Fannie Mae/Freddie Mac, FHFA in their infinite wisdom has advised lenders that they can start using more Desk Top Appraisals starting in March of this year. At first you think great, quicker turn times for appraisals, lower cost reports and they do not have to go inside the home. But WAIT. Guess what? Desk Top Reports require interior WALLS and a Floor plan sketch!

How are the Appraisers going to get that information if they are conducting the Appraisal from their desk you ask? YOU the Realtor will be called upon to do this for them. YEP, it is either you or the homeowner. Now envision this, you or the owner has to have an iphone or Android APP on their phone that allows them to walk around the entire outside of their home (older owners will just love this) and then on the inside, be tech savvy enough to hold the phone and walk through the house and measure the home by moving their phone along all walls or ceilings so the Appraiser can somehow put together a sketch/Floor plan. They have to talk to you or the homeowner about any issues they see as they walk thru the house in detail. 

Lenders think Desk Top reports will take Appraisers less time to complete. Guess what it will take LONGER. We have to track down the Realtors or homeowners to set up a time to walk thru the home and do all that is required. Plus you know the homeowner or YOU as the Realtor will want to ask the Appraiser questions as they move thru the home, some they can answer, some they cannot. This process will take much longer as the Appraiser will have to train people every single time they do a report on how to do these measurements. They have to shedule times to do this.  Realtors and Homeowners this is NOT YOUR JOB, but this is the reality IF Lenders choose to request Desk Tops from Appraisers.

The Appraiser can walk thru a home, take laser measurements and at the same time note things about the home WAY faster than anyone else can as they have been trained and have been doing this every single day for years. Also Fannie will require Appraisers to use ANSI measurement guidleines as it relates to how to sketch a home. If you have NO clue what ANSI is then get educated now.

So REALTORS, you have the ultimate power with your lenders to bombard them with emails or TEXTS and tell them do not have Appraisers do Desk Top Appraisals. It is crazy that they want a full floor plan with interior walls, when they never required that for full appraisals.  The only time we had to do that was if there was an unusual floor plan. So I guess they want to make sure that since we are not seeing the inside of the home they want interior walls on the sketch to make sure the home does not have some sort of unusual floor layout.

Trust me when I tell you this will be very cumbersome upon the person trying to do the measurements and showing the Appraiser every aspect of the rooms inside and outside so the Appraiser can determine if there are any issues in the home or with the floor plan. 

Fannie, Freddie and FHFA received NO input from Appraisers who have boots on the ground when they came up with this insane idea. Only YOU can help to squash this requirement in their tracks as they clearly don't want to hear from us!

Also be aware that many Appraisers have already said they will NOT due desk top appraisals! So good luck lenders trying to get this done. 

Check out this poll which was just started minutes ago on a National Appraisal Facebook page asking how many Appraisers will or will not complete Desk Top Appraisal reports. Appraisal Poll on Desk Tops

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Homes flying off the shelves? Appraisals falling short? Buyers Overpaying? Who would have thought in their wildest dreams that a Pandemic could cause such a frenzy of Real Estate Activity and Rising Sales Prices! YOU MAY WANT A PRE-LISTING APPRAISAL NOW MORE THAN EVER TO PREVENT BANK APPRAISAL SURPRISES COME CONTRACT TIME!

Economics 101 right? Low Supply, High Demand...Prices skyrocket! That is exactly what has and is happening. Whether it is people escaping packed tight city life due to Covid or out of towners looking for reasonably priced lakefront property compared to NY, Chicago or California...Properties are selling as fast as the signs goes in the yard or even BEFORE. **Side note: If you do not place your sales in FMLS or MLS the Appraiser will not know about them and this could HURT your sale when they cannot find good recent comparable sales. So please do not leave sales out of FMLS/MLS. So what does this all mean when it comes to Appraisals? You are likely seeing them come in BELOW the sales price. Let us be reminded sales price does not automatically correlate to Market Value and the appraisal should not necessarily come in at the Sales price. Other factors come into play where the definition of market value is concerned, such as Buyers acting in their own best interest and not under undue pressure to buy (such as losing out on homes because of limited supply and others putting in offers on those homes they want). What I am seeing is FAST upward movement which quite frankly scares me for the Buyers. If you are a Buyer's Realtor it should scare you too. They are relying on your expertise and I know many of you have already said to yourself "I am surprised that home sold for that much"! I certainly have said that. Multiple offers, cash buyers, sales over list price, escalation clauses, appraisal contingencies waived, are all on the table these days even for the over 1 million dollar properties. This is NOT good for the Buyers and they should be counseled accordingly. Appraisals work in the past, even if it is only 2 weeks in the past. YES, we can and DO make market change adjustments to catch up with the market increases, but remember we are protecting the lenders risk and they have requirements of us. If we are making across the board UPWARD market change adjustments they will get very nervous about their future risk if the market corrects. As for cash buyers we are protecting them and their investment as we should. If we continue to have steep upward trends in sales prices...what goes up will come down, we know this all too well from past history. If you have a Buyer who you have counseled that does not care if they are over paying for a home based upon all the most recent sales and even the pending ones, then so be it. But please do not be surprised when appraisals come in short of the sales price, this does not mean the appraised value is "low". It only means the comparable sales could not support the sales price the buyer was willing to offer the seller. Remember please that sales price does not always equate to Market Value. I wish you all well out there. Stay Healthy and Happy! ____________________________________________________ We continue to follow all CDC guidelines in our business by wearing masks, social distancing, using hand sanitizer and we also wear gloves during our appraisal process. We never stopped working during the shut down as we were considered essential workers as an arm of the Lending Institutions and we are blessed thus far to remain healthy. We have been very busy as many of you have been and we are thankful for the work and all of your referrals. ** We are providing UPDATED Appraisal reports for many who may have had one just prior to the shut down due to Covid as values in most areas have increased since that time. So call on us if you need that service for your clients. Again, Thank You for your business, we appreciate your trust in us!

Comp selection is at the HEART of the appraisal process. First off what exactly IS a comparable sale? In a nutshell, it is that sale which would be the best replacement for the SUBJECT property if that property was no longer available for purchase. Would a buyer reasonably consider purchasing this other property in place of the Subject? Yes or No! What are the steps in comp selection: Consider the Bullseye. We start by first looking inside the same development or immediate neighborhood of the Subject. Location is key because it means it is the most similar to the Subject and inside the same school district, which drives buyers decisions many times. (That is not to say we won't select a comp in another school district, but we must be prepared to make adjustments for any locational variance if we do). Next we want similar style: If the Subject is a ranch, we want to select other ranch homes. Buyers purchasing ranches like either the style of them or the fact that they have no stairs. So even if we are inside the same development, we may not choose a 2 story home to compare to that ranch, because that does not represent the actions of a typical buyer. Unless most buyers want to be inside THAT popular development regardless of style. Appraisers then need to recognize location influence over style. Knowledge of the area by an Appraiser is crutial in this particular case. Next we look at year built, quality and condition of the home. If the Subject has been nicely renovated, then we do not want to select a home that has no renovations or updates, even if it is located inside the same development. We would be better served to expand the distance around that Bullseye to find a comparable renovated home. If you were a buyer and wanted a nicely renovated home you are not going to buy one that needs alot of updates. Next we look at date of sale. Ideally we want a sale that occurred as recently as possible. Recent sales provide the best indicator for market trends. Preferably a sale that is no older than 1 year from the date we conduct the appraisal. However if we find a sale inside the same development or one nearby which is most similar to the Subject and it is over 1 year old, we can use that sale as an additional supportive comp to the primary 3 comparable sales that the Appraiser typically uses in most reports. Going beyond the Bullseye: An Appraiser can and will go outside the Subject development if no good comps exist inside the Subject development. They just need to make sure that the location they select is comparable to the Subject's location. Don't expect an Appraiser to go inside a superior development with higher priced homes and superior amenities for their comparables. Remember, would a buyer do this? The answer is likely NO unless they are willing to pay much more and then we are not comparing apples to apples any longer. Fannie MAE never put restraints on Appraisers to stay within 1 mile or within 1 year for comps. Lenders placed these stipulations for comp selection. If the Appraiser can provide good reason to go beyond the Bullseye in distance or time to find truly comparable sales, then they can do so. In Summary: Always be thinking about what the BUYERS are going to do. If they are looking to purchase the Subject and it was no longer available (and assuming they are not going to pay more) then what other properties in the area will produce the best replacement for that property? If you read this to the end, Congratulations! Now what was the one thing I left out here? Adjustments! That will be the subject of another newsletter. Appraiser's must determine the appropriate adjustments for any variances between the comparable sales and the Subject. Most sales are not exactly the same as the Subject. The sole purpose for the adjustments is to make the comparable sales EQUAL to the Subject. There are various ways that this can be done, but it takes alot of experience and knowledge of the market. Thanks for stopping by and be looking out for my next newsletter...The ANATOMY of Adjustments!

If you have any questions or would like to schedule an Appraisal call or email me. [Lanier Appraisal Service] [770-967-0753] [lakelanierappraiser@gmail.com]

With all the alternatives to selling Real Estate, Companies like Open Door, Offer Pad, Knock.com, etc. have entered our market. So what does this mean FOR the market and appraisals?   One could argue they are creating a NEW market. This is BAD news for other sellers because we all know that they purchase homes at below market values to make a profit on resale. But what if they infiltrate our market and Appraisers have no other sales to use when they are appraising other properties? This could be a problem. Hopefully when they resell the home they do so quickly and at market value and not still under market because they made such a great buy. They typically freshen up the homes with new paint, carpet, maybe appliances, if needed, but not always.   You can relate to this back when we had more foreclosures than true arms length sales after the market crashed. When that happened, foreclosures dominated the market and Appraisers did use these as comparable sales because that was the reality of the current market at that time.   So what is an Appraiser to do? What is a Realtor to do? Make sure that the Appraiser does not miss the fact that there was a sale in your listing's neighborhood which sold via Open Door or Offer Pad and go further to show proof it was indeed a below market sale, compared to other sales in the area. Appraisers should not be using below market sales when there are other sales that prove current market value is higher.   Appraisers should catch the fact that a sale involved Offer Pad or Open Door, because we are supposed to review both the current and prior sales in the past year for the comparables and the 3 year history of any sales for the Subject. The name of the owner should be apparent in courthouse records, but as a Realtor or Seller you need to point this out to the Appraiser whenever possible.   I wanted to make sure I was speaking from experience on these below market sales, so I actually had Offer Pad and Open door provide me with an offer on our home. Open Door was 10% below conservative value of our home. Offer Pad was a whopping 30% below! I filled out their forms and sent photos of my home. I sent fewer photos to Offer Pad, but that should not have made that much of a difference.   We also have local Realtors like Mark Spain who by his own commercial says..."Bypass the market and sell your home to him" Not a good idea to bypass the market, when that is the VERY thing Appraiser's are trying to analyze to determine market value for lenders, sellers and buyers!   Sellers who use these companies may be impacting the market for their neighbors. I know they may not care, but they should be informed.   Both of these companies charged MORE service fees than Realtors do with their commissions. Plus they hit you with repair items that could get costly. Your NET may be far less than you think as a seller. I get it, some people under certain circumstances need to sell now or don't want to go through the showing process and negotiations, etc. Other than that, why people use these companies is beyond me.   Bottom line is: Appraisers SHOULD steer clear of these below market sales in a flourishing market like we have now. They should have other sales that they can use, which are truly market value sales. If they have no option but to use a sale such as this, they need to make appropriate market based adjustments for this below market sale. If they can prove for example that it is 10% below market, then they can make that upward adjustment for that sale. But until these types of sales dominate our market, then there should not be a huge issue here.   REALTORS: You need to work hard to prove why sellers should NOT use these companies. They need your expertise and local knowledge and the protection that you provide to the Sellers and Buyers out there. Otherwise these companies will continue to increase in numbers and run you out of business!   Zillow, Redfin.....the list goes on and on....    Good luck out there and find the things in your business that set you apartand you should be successful. Be a specialist for your Sellers & Buyers.   Thanks for stopping by and feel free to SHARE!

NAR (National Assoc. of Realtors) posted top 3 Seller concerns. One of them was: "Price Their Home Competitively" “They're telling us that puffing their egos with a fat listing price isn't what they want. They want their property to sell.”

So, I thought "put your money where your mouth is" since I suggested Pre-Listing Appraisals in order for all 3 top seller concerns to be met. Based upon our pre-listing appraisals in 2018, the sellers who placed their homes on the market and listed them CLOSE to our appraised value, the Days On Market for these homes (many of them lakefront) averaged 34 days! The average for similar properties is around 50-60 days. In 36% of the cases they sold in 10 days or less. In only 1 case over 120 days. In some cases the owner got more than their listing price as they priced it very well.

In the cases where the owner decided to list WELL over our appraised value (meaning over 10% of value) not a good story! Longer DOM than typical and price reductions, sometimes several. In many cases they changed REALTORS! Not good! When that 2nd Realtor listed closer to appraised value...Bingo they get the SALE & commission!

So for 2019, consider a Pre-Listing or POST-Listing Appraisal if your home is on the market longer than 60 days. This could be your bullett proof marketing tool to close more deals quickly.

We hope 2019 is one of your best years yet, but in order for that to happen you have to pull a few tricks out of the marketing bag as all indicators are that the market is slowing a bit for 2019 with 2020 the possible start to some major corrections!

HERE IS WHAT ONE SELLER HAD TO SAY WHICH SUMMARIZES WHY A GOOD PRE-LISTING APPRAISAL IS SO VALUABLE AND IMPORTANT.

5 star review:

Another great Radio Show interview today on WDUN Radio with Kim Waters, Realtor with the Norton Agency. 

We discussed Zillow, Comp selection, Real Estate Market, If Appraises want the homeowner present during the appraisal appointment, etc. Great Show went way too fast. So many more topics to discuss. 

They have asked us back for more shows in 2019. Looking forward to it!

Thanks to those who listened in today!