Tim Andersen, The Appraiser's Advocate Podcast

USPAP: Stones or Cities? In the world of real estate appraisal, every professional faces a choice: are we simply hauling stones, or are we building cities? That question lies at the heart of USPAP: Stones or Cities, a reflection on why appraisers must embrace not only the technical details of valuation but also the broader ethical and professional vision that underpins public trust. The Uniform Standards of Professional Appraisal Practice (USPAP) serve as more than a checklist; they provide the ethical scaffolding that ensures our work builds confidence in markets, lenders, and communities. Too often, appraisers view compliance as a burden — like moving rocks from one place to another. But when we see our role through the lens of purpose, transparency, and integrity, our daily tasks become part of constructing something greater: fairness in lending, justice in taxation, and confidence in real estate markets. Dr. James Graaskamp reminded us that real estate is never merely physical; it is social, economic, and ethical. Similarly, the USPAP Ethics Rule calls us to independence, impartiality, and freedom from bias. When appraisers honor these principles, they do more than complete assignments — they help shape the cities of tomorrow. USPAP: Stones or Cities challenges each appraiser to ask: Am I simply producing reports, or am I contributing to a just and trustworthy marketplace? The answer defines not just our careers, but the legacy of the profession itself. By embracing a professional vision rooted in ethics, competence, and leadership, appraisers move beyond stone-hauling to city-building — ensuring that their work truly serves the public trust. And remember to keep your E&O up-to-date and have an experienced administrative law attorney on your side!

H1: UAD 3.6: Blessing or Bother? A Practical Guide for Residential Appraisers Rollout begins September 8, 2025. Whether UAD 3.6 is a blessing or a bother depends on your practice focus. If you live on the GSE side of the house, mastering the nuances is unavoidable—and worth your time. If your work leans to estates, divorces, tax appeals, and Yellow Book assignments, you’ll encounter less immediate pressure. In this episode of The Appraiser’s Advocate, we explain what’s changing, why software and client timelines may feel bumpy at first, and how to prepare without panic. Vendors, lenders, and AMCs are learning too; we’ll cover realistic expectations for staggered adoption so you can keep cash flow steady and clients confident. What you’ll learn What UAD 3.6 actually changes (dynamic report, structured data, packaging) Who really needs it now (GSE work) vs. where it’s less urgent (non-GSE assignments) Transition pains to expect (software readiness, lender/AMC ramp-up) How to protect your practice (flag awareness, workflows, templates, client education) Professional guardrails—keep ethics first, maintain E&O, and know when to call counsel Need a hand? Email me: tim@theappraisersadvocate.com But no matter what happens, keep your ethics foremost, pay your E&O insurance premiums, have an administrative law attorney on speed dial, and contact me at tim@theappraisersadvocate.com when I can be of service to you.  Thanks!

What does your signature mean?  In real estate appraisal, ethics (i.e., USPAP) and public trust form the foundation of professional credibility. This episode of The Appraiser’s Advocate emphasizes the critical importance of an appraiser’s signature, which represents not only an opinion of value but also a solemn pledge of honesty, objectivity, and compliance with the Uniform Standards of Professional Appraisal Practice (USPAP). The discussion highlights how the appraiser’s signature is more than a procedural step. It functions as a seal of integrity, signaling to clients, lenders, courts, and the public that the report is unbiased, transparent, and free from conflicts of interest.  Just as importantly, the signature assures that you conducted the valuation process with due diligence and professional independence, protecting the broader market from misinformation and manipulation. What does your signature mean?  This podcast reminds listeners that every appraisal carries ethical weight.  The appraiser’s signature on the Certification directly influences lending decisions, property sales, and even legal disputes. A careless or biased opinion can erode confidence in the market and damage public trust.  By contrast, a well-documented, ethically sound appraisal builds credibility, not just for the individual professional, but for the entire appraisal industry. So, what does your signature mean?  Ultimately, this episode underscores a vital truth: an appraiser’s signature is never just ink on a page. It is a public affirmation of trustworthiness, professional standards, and moral responsibility.  For appraisers seeking to strengthen their careers, upholding ethics and protecting the public trust remain non-negotiable responsibilities. And remember:  keep your E&O Insurance up-to-date, and an administrative law attorney on speed dial!

Why are there among our Fellows who conclude the new UAD3.6 is a terror?  It may be that it is a change from what we already know, and everybody (not just appraisers) fear changes.  Or maybe it is because this will require appraisers to learn a new "language".  After all, what currently works in report writing will be obsolete when UAD3.6 comes out.  Or maybe it is just that appraisers think the GSEs have no call or right to meddle in what works.  Hey!  It ain't broke, so don't fix it.  No, it's not broke.  But it is old and outdated. So, to claim "UAD3.6 is a terror" may be jumping the gun a little.  Between this writing and November 2, 2026 when UAD goes into effect, there are approximately 14-months within which appraisers can learn and then conquer USD3.6.  Is there going to be some disruption of appraisal life as we know it?  Yes, of course.  Are some of our Fellows going to find this transition difficult? Surely.  Will the UAD3.6 that rolls out in September of 2025 be the same UAD3.6 that presents in November 2026?  Probably not.  So, what are we appraisers going to do?  Some will see these changes are a reason to collapse and fail.  Others will see it as an opportunity to rise to the occasion.  Really, is that not how we should all be? So, we can collapse in tears of frustration, or triumph with tears of joy and enthusiasm.  If you think UAD3.6 is a terror you'll be right.  And it you think it is an opportunity to excel, you'll be right, too. In any event, keep your E&O Insurance up-to-date, and an experienced administrative law attorney's number handy in your phone.  Those don't mean you are afraid of anything.  It merely means  your wise.

What's wrong with the supervisor/trainee model?  Nothing, other than it does not work.  Outside of that small limitation, it is entirely viable.  So, really, despite the fact that model is as old as dirt, what's wrong with it?  If it does not work, why did the appraisal industry implement it in the first place?  Is it fixable?  If it is fixable, who is going to fix it? What's wrong with the residential real estate supervisor/trainee model is, in part, how it started.  Real estate appraisal has always been a cottage industry.  It was originally an offshoot of the brokerage and construction industries.  Brokers and builders were supposed to be familiar with real estate values, costs of construction, and so forth.  In 1932, when what was then known as the American Institute of Real Estate Appraisers began, almost all of its members were also brokers and builders, as well as investors.  While it had a formal Code of Ethics, as well as a formalized educational program, it had to form a plan by which to train new appraisers.  It was just accepted that the old guys would teach the new guys the practical side of real estate appraisal. But that highlighted what was wrong with the residential real estate supervisor/trainee model.  In many cases, the old guys did know there stuff but, for various reasons, were not willing and/or able to teach it to newbies.  This is basically the problem with the system now.  Lots of schools and programs "teaching" real estate appraisal, but no practical way for newbies to enter the system.  Unfortunately, this is still the case. Remember, whether you have 30-years experience, or are a newbie, you'll need proper E&O insurance, as well as an administrative law attorney if you get that letter from your state.

What does appraisal's future hold?  This is a question that comes in all the time.  Since it comes in all the time, and time is dynamic, so is the answer to the question.  Simply, we cannot have the assurance of a yes or no answer.  There are too many variables to account for.  There are too many changes we cannot see around corners we cannot imagine.  Yet, somewhere, somehow, there are among us those for whom the variables settle their flutter and corners become less opaque.  Appraisal's friend, Craig Morley is one of those savants for whom the future is slightly less cloudy than for we mere mortals. What does appraisal's future hold for appraisers?  That (among others) is the question we put to Craig in this podcast.  Craig, with his usual gentle wisdom and clear eye, addressed some of these issues.  His answers will surprise some, disquiet some, enrage some, frighten some, and enlighten the rest of us.  There is no reason to chronical those answers here.  Please listen to the podcast. And remember, you need full E&O coverage from a reputable broker, as well as a great administrative law attorney in your corner, if "that letter" ever arrives from the state appraisal board.

The reconsideration of value is a formal process.  In the Fannie Mae Selling Guide are the guidelines that allows a lender or borrower to request a review of an appraisal when relevant new information may affect the value opinion. This isn't about disagreeing with the appraiser’s judgment.  It's about presenting factual, material data—such as overlooked property features or newly closed comparable sales—that may not have been available during the original analysis. The appraiser then reviews this information and determines whether it justifies any change to the original value. A reconsideration of value must be supported by specific, verifiable market data.  It cannot be based on mere dissatisfaction with the appraised value. The appraiser’s role is to assess the credibility and relevance of the submitted information. If the new data is meaningful and meets professional standards, the appraiser may issue a revised report. However, if the appraiser finds the information immaterial or redundant, the original value opinion stands.  This reinforces the objectivity and independence of the appraisal process. The reconsideration of value request typically must be submitted within 30 days of the appraisal’s delivery.  Only the borrower can initiate it. Appraisers are prohibited from making changes based solely on client preferences or pressure. The process safeguards the reliability of valuation in mortgage lending.  It also offers a mechanism to correct genuine oversights. When properly handled, it ensures fair and accurate appraisals without compromising professional ethics or regulatory compliance. And don't forget to keep your E&O Insurance up to date and a great administrative law attorney on  your side!

USPAP, SR1-6, and Reconciliation are central to producing a credible opinion of value in any real estate appraisal report. The 2024 Uniform Standards of Professional Appraisal Practice (USPAP) emphasizes that reconciliation is not just a procedural formality—it is an essential component of value development. According to USPAP’s Standard Rule 1-6(a), appraisers must reconcile the quality and quantity of the data analyzed within each valuation approach. This rule underscores the importance of critical thinking and professional judgment in ensuring the appraisal is not merely mechanical, but rooted in logic, accuracy, and market relevance. USPAP, SR1-6, and Reconciliation also require clear communication and transparency in every USPAP-compliant appraisal. Under SR1-6(b), appraisers must reconcile the applicability and relevance of each method and technique used to arrive at the final value conclusion. This means explaining why one approach—such as the sales comparison, cost, or income approach—was given greater weight over others. For clients, lenders, and legal professionals reviewing the appraisal report, this level of clarity enhances trust, supports regulatory compliance, and upholds the ethical standards of the profession. USPAP, SR1-6, and Reconciliation ensure that an appraiser’s conclusion is both defensible and reliable. Proper reconciliation weaves together all relevant market data, analysis techniques, and scope of work into a unified, well-reasoned value opinion. In a world increasingly driven by data and regulation, credible appraisal report reconciliation stands as a hallmark of professional excellence and client confidence in real estate valuation. No matter what, make sure your E&O is up to date and you have great administrative law attorney on your side.

DOES REAL ESTATE APPRAISAL HAVE A FUTURE? Does real estate appraisal have a future?  This question comes in to me all the time.  And it’s important! We’ve invested a lot of time and money to become appraisers.  Did we waste all that?  There are some who say yes to that question.  Generally, they point out the changes that are coming to real estate appraisal (or have come).  Then they point out the sacrifices to keep up with these changes are just too big.  Those changes are coming at us just too fast.  The learning curve is just too long.  These appraisers should transition out of the business So, does real estate appraisal have a future?  Of course it does.  It will be different than it is now, though.  Because UAD 3.6 demands greater reporting, it also demands more thorough appraisals.  More attention to details.  Less boilerplate.  Fewer unsupported assumptions about adjustments, market trends, and effective age.  Yet the professional education and training behind those demands will make those who stay in the business better appraisers.  How is that a bad thing?  It is also likely appraisers will need to make some transitions.  This means transitions to commercial work, non-lender work, court work, divorce work, tax appeal work, etc. Yes, all things considered, real estate appraisal has a future.  But the hallmark of that future is one of change.  Is what you read on the appraiser-oriented websites, etc. accurate?  If it is, then within 24-months of this podcast, there likely will be fifteen percent fewer appraisers than there are now.  There likely will be fewer folks getting into the business.  And those who stay are likely to be better trained.  Why?  Because the cookie-cutter house in the cookie-cutter subdivision will be an assignment of the past.  Make sure you have proper E&O insurance and proper legal counsel.  Those requirements will not change.

USPAP, Verification, and Bernoulli's Fallacy.  That's a mouthful!  What does it mean?  I'm assuming  you've heard of USPAP.  Verification is an important component of USPAP's SR1-4 (learn it, love it, use it).  But it is likely Bernoulli's Fallacy is something you don't know about.  Yet.  You will, though.  It is going to become really important in residential real estate appraisal, especially when UAD3.6 takes effect in November of 2026.  Read on to learn why. Really USPAP, verification and Bernoulli's Fallacy go together.  USPAP's Standards Rule 1-4 requires us appraisers to "...collect, verify, and analyze all information necessary for credible assignment results."  As with a lot of USPAP, this is not overly clear (hello, ASB!).  Bernoulli's Fallacy says, in so many words, in statistical inference, people often wrongly assume that a single event, or a small number of observations, directly reveals the underlying probability of a process.  We see this all the time from clients.  Most houses in a subdivision sell for between $300K and $350K.  Yet the one with the premium view and the kitchen upgrades that sold for $393K gets all their attention.  If the subject is your basic house in the neighborhood, then its value is somewhere between $300K and $350K, that one outlier notwithstanding.  One outlier's price does not predict market value, despite what the client demands. USPAP, verification, and Bernoulli's Fallacy are a package deal.  USPAP demands verification and we avoid Bernoulli's Fallacy by being very skeptical about the predictive value of one or two outliers.  This will become even more important as UAD3.6 kicks in and appraisers will need to write more in their appraisal reports.  Are you preparing for that? Questions?  Contact me at tim@theappraisersadvocate.com.   Need legal help or information on E&O insurance.  I can help you with those, too.

Having trouble choosing comps? Tim Andersen, the Appraiser's Advocate explains one possible model in this podcast.

USPAP does not specifically use the term, "...from your workfile..."   However, you'll find your state appraisal board does.  In fact, you'll find the board uses this phrase a lost.  Given that, let's spend some time on what the phrase means how we appraisers must comply with it. "From your workfile" means just that.  Under USPAP's Standard 1, the appraiser has the ethical obligation to have enough materials, data, analyses, and so forth to support everything.  In this instance, everything means every conclusion, statement of fact, opinion, etc.  A lot of appraisers ask why this is necessary.  To support everything from the data, analyses, and information in the workfile means the appraiser acted objectively.  Each opinion, conclusion, and so forth merits objective, market-based support.  If the market does not support a conclusion, if there is even a hint of subjectivity in a highest and best use or value opinion, then its credibility is fatally flawed. What about phone messages?  How is it possible to get those from the workfile!  Simple.  When you verify a sale, take notes on that call.  Who?  What? Where? When? Why?  How?  When you have the answers to those questions, you are home free.  Brokers won't return your phone calls?  Then send an email with this statement, "I know you are busy.  So, if you do not respond to this email, I'll assume the facts of this transaction are as you noted them in the MLS."  Then, make sure your workfile has a copy of the deed, mortgage, survey or plat, zoning classification and code, and everything else the County/Parish has on the subject.  This supports your objectivity. And remember, make sure you have great E&O insurance on your side, as well as a great attorney.

USPAP doesn't mention time adjustments.  They are not useless or unnecessary.  Measuring and analyzing changes in market conditions are critical and fundamental to real estate appraisal. Indeed, they are the foundation of an accurate opinion of value. This is simply because such a value conclusion has as its base a specific date in time.  This is the effective date of appraisal. So, from within the neighborhood boundaries appraisers delineate at the beginning of the appraisal report, they must analyze sufficient sales data. To do what?   To determine if there have been any changes in market conditions over the passage of time. Typically, this time starts when the comparable goes under contract.  Then it ends on the effective date of the appraisal. Has the market has measurably changed over that period?  That change means the appraiser should market-adjust the comps up- or downward, as the market demands. Again, USPAP doesn't mention time adjustments.  But this raises the question of which time period should the appraiser measure? As you’ll understand from the podcast, the GSEs assume the appraiser will measure the subject’s relevant market(s) over at least twelve (12) months.  There is no black-and-white answer to the question, “How far back should I go for time adjustment data?” 12-months is a minimum, however. Since USPAP doesn't mention time adjustments, assume a twelve percent (12%) net increase over that one (-1-) year period.  Assume prices increased twelve percent (12%) from January to August but went flat as of September 1st.  If a comp went under contract September 14th, closed escrow November 27th, and the effective date of your appraisal is December 23rd, your time adjustment would be zero (-0-). The market went flat three (-3-) months ago. This is, therefore, the difference between the annual change per year and any current market trends.

A hill to die on.  That sounds way too serious for a real estate appraisal podcast, right?  These are supposed to be about USPAP, and education, and more practical stuff.  But I've been studying on this topic for some time.  Frankly, what AMCs do (or don't do) does not bother me as much as it does some appraisers.  Those appraisers complain that AMCs do not distinguish between their gross fees and the proration of that fee that goes to the appraiser.  That's true.  But when you buy a car, the dealer does not make transparent the contributory cost of the spark plugs and drive shaft, either. And the fees the AMCs pay are not, in my opinion, a hill to die on, at least not right now.  That time is coming - soon.  So, unless the AMC withholds some pertinent information from the appraiser, or somehow misrepresents the situation, then the appraiser sets the fee by accepting it.  But there is a hill to die on when it comes to AMCs.  And that hill is USPAP, of which all AMCs, you'd think, would be aware.  But while the GSEs are pushing appraisal waivers, it also seems AMCs are stressing appraisers to accept lower fees for the same quantity of work, all to sustain the AMCs' fee structure.  Remember, the AMC can ask the appraiser anything it wants to ask.  If, however, that request includes a knowledgeable request to violate USPAP, then it is time the appraiser should fire that AMC and get a new client. Today, right now, get out of AMC work and into private work.  I'll be happy to consult with you on that.  And make sure your E&O insurance is as relevant as possible.  It will help to have expert legal counsel in your phone's directory, too!

Compliance with USPAP can be a major pain! But, really, we have not choice.

There's too much going on in AppraisalWorld.  It is essentially impossible to keep track of what's going on.  FHFA just announced, in the most neutral of tones, that appraisal waivers could now be had, under certain conditions unheard of before.  Again, conditions apply, but waivers are going to be available up to a 90% loan-to-value ratio (and 97% with a property data collection requirement).  One of the conditions that applies is that the borrower would have to possess a killer FICO score.  But that condition is current at the end of 2024.  Given current political and social forces, who knows what those will be six-, twelve-, and eighteen-months from now?  If real estate appraisal is the adult supervision of the mortgage lending industry, it appears that industry has found a way to remove the adult's influence. And, there's too much going on in other areas, too.  Fannie Mae is still sending letters to state appraisal boards about time and GLA adjustments.  Certain states that do not accept anonymous complaints just trash them as a matter of course.  Other states that accept such complaints insert those letters way at the bottom of their to do list.  This may help the state with its administrative work load.  But it does not help the appraiser to sleep well at night as this hangs over the appraiser's head, family, and business. And speaking about there is too much going on.  There are now grumblings that USPAP needs to replace the ambiguous word credible (credible to whom and how to measure it?) with the word reliable.   This is especially true now that the ROV process assumes the borrower is an intended user of the appraisal report. So, what to do?  Consider making friends with an administrative law attorney in each state in which you have a credential.  And please make sure you have proper E&O insurance coverage.

Financing concessions and USPAP!  More on this?  Haven't we heard enough on concessions, cash equivalency, and stuff they don't teach us in appraisal school?!  If you listen to what Fannie and Freddie have to say on these topics, the answer would have to be an emphatic "NO!".  Why?  Because Fannie and Freddie continue to tell us we are not making the necessary adjustment when we need to.  If we can't believe Fannie and Freddie, who can we believe, right? Financing concessions and USPAP are real issues!  When it comes to making adjustments, any adjustments for that matter, education is the key.  We may not make the necessary adjustments because we don't know we are supposed to make them.  Or maybe we don't know how to make them.  Well, education solves those problems.  And this education is easy-to-access, as well as easy-to-afford.  So, what's stopping you from getting the education you need?! As you know, NAR settled the Sitzer-Burnett case.  And this case, in part, dealt with financing concessions.  Now, is the party who pays the buyer's broker's brokerage commission granting a sales or financing concession?  Or, is that party merely negotiating the best purchase and sale deal they can?  How you, the appraiser, choose to answer those questions is important.  One answer will require a sales financing adjustment.  One answer will not.  But there is no one-size-fits-all response.  So it will be necessary to do the analytics on this question for each and every assignment.  Critical thinking is a hallmark of a real estate appraiser.  So, think critically about your answers to the financing concessions question.  Your answers will affect how you make a living. And don't forget to make sure your E&O insurance is up-to-date.  If you answer the above critical thinking question properly, you won't need legal counsel to get you out of a jam!

What do technicians, mechanics, and engineers have to do with USPAP and Real Estate Appraisal? Maybe nothing. But, at this point, it is easiest to conclude that a technician is one who knows that something should be done, though not necessarily how, when, or why.  Technicians, mechanics, and engineers understand there is a process involved somewhere.  A technician understands this, too, but for whatever reason, is not yet familiar with it. But a mechanic understands there is a problem within the system to be solved.  The mechanic also understands there is a process involved in its solution.  Then, via training and experience, the mechanic is capable of being part of that solution.  Indeed, the mechanic understands the system sufficiently to solve the problem alone.  So, if the mechanic can take care of the system's problems, what is the purpose of an engineer? Technicians, mechanics, and engineers all have their respective places in the natural order of things.  Technicians help mechanics.  Mechanics work within systems and fix the problems within them.  But mechanics are limited to working with existing systems.  Therefore, there must be somebody to design and implement the systems on which the technicians and mechanics work.  So, without engineers, there would be little need for mechanics and technicians. So, here's the connection.  Are appraisers technicians, mechanics, or engineers?  Filling out an appraisal reporting form is the job of a technician.  Knowing what to put into the form is the job of a mechanic.  But by designing and executing the appraisal, what we appraisers summarize on the form requires we function as engineers.  We do more than fix problems.  We design systems to have the fewest problems as possible. Oh, and make sure your E&O is always up to date.  And, when you need it, get proper legal advice.

One of the purposes of this podcast is to make you mad.  Another is to open your eyes to the power the analytics of the cost approach have to analyze sales.  Another is to anger you.  About what?  About the depth of its questions and what is likely to be the shallowness of your answers to them.  With any luck at all, this podcast will do both.  If it does, then you’re paying attention.  Thank you!  If it does not, then I’m not doing a proper job as a USPAP instructor.  I’ll need to work smarter to open your eyes. Again, I want to make you mad.  It is clear most appraisers do not like to engage in the analytics of the cost approach.  Generally, we are not too familiar with it since most of its protocols are not market oriented.  And there is a lot of math involved.  Remember that four out of three appraisers do not understand math.  The GSEs make it clear that they do not think the cost approach results in a reliable indication of market value.  So, it is clear that most appraisers, because of these limitations, do not appreciate the deep analytical power the cost approach really has.  Most of us simply do not understand how the protocols of the cost approach help us to come to a credible opinion of market value.  Therefore, I’m going to ask you 10 questions on the cost approach and stuff related to it.  After we’ve finished with them, you probably will still not like to tackle the cost approach (and for the same reasons).  Nevertheless, you just may have a better understanding and appreciation of its powerful analytical capabilities. And remember to keep your E&O Insurance up to date, and understand the need for legal counsel.

There are two steps to the adjustment process. First is to ascertain the market recognizes any specific adjustment. Then, measure the market to determine the quantity of the adjustment.