Appraiser Update

The most significant change is the retirement of the legacy appraisal forms and form numbers. Yes, you heard correctly! No more forms or form numbers. Going forward, there will be one dynamic URAR for all residential property types, including single family, 2- to 4- unit, condo, manufactured, and co-op. The new process will accommodate traditional, exterior only, desktops, and hybrids appraisal assignments when applicable. Even those additional client requests, such as limited marketing or exposure time values, cost to repair, and government agency requirements are now part of this single reporting process.

The best part is the adaptive nature of the report. Conditionality drives what sections and information appear in the final output, eliminating the need for multiple forms. The final report will only display what is relevant to your appraisal assignment and show the actions you have taken to develop the appraisal. The result will be a uniquely designed report for each subject property that best communicates its characteristics, and the work performed.

Also available in the file folder is the D-1 URAR Sample Scenario Matrix. Use this spreadsheet to quickly identify key characteristic of each scenario. For example, Single Family 3 (SF3) has an ADU in an outbuilding, while Single Family 4 (SF4) has an ADU in the basement of the primary dwelling. Condo1 is a sample of a hybrid appraisal while Condo2 is a desktop appraisal, and so on. 

Single Family Scenario 5 (SF5) is the best representation of how a typical straight-forward appraisal assignment will display in the new URAR. Keep in mind, each sample scenario was thoughtfully crafted to display as many different appraisal variations as possible to give appraisers and users of appraisal reports the full spectrum of reporting capabilities. 

As you begin to prepare, we ask that you take the time to review each sample scenario. Given your experience as an appraiser, we think these visual aids will help provide greater context into the coming changes. The sample appraisal reports are intended to illustrate how the new reports display information and demonstrate the diversity of fields available for appraisers to use.

Definitions of Sketch and Floor Plan

In February, we added the definitions of footprint sketch and floor plan to the Selling Guide glossary:

We require a floor plan for all property data collections, hybrid appraisals, and desktop appraisals. If the layout of the dwelling unit(s) is atypical or functionally obsolete, we also require a floor plan for traditional appraisals. Otherwise, a footprint sketch is acceptable for traditional appraisals. For more information about when to provide a floor plan versus a sketch, see Selling Guide B4-1.2-01, Appraisal Report Forms and Exhibits.

Absolute vs. Relative Ratings

Our Appraiser Quality Monitoring (AQM) team routinely finds cases of appraisers smoothing their quality or condition ratings. An example would be when the appraiser rates the quality of all subject properties Q3, indiscriminately. In fact, we sent educational letters to more than 200 appraisers in 2024 (and 59 already in 2025) for this issue. It undermines the credibility of the appraiser and, if uncorrected, could lead to more serious consequences. This behavior may be evidence that the appraiser has determined property ratings on a relative basis rather than absolute. Selling Guide section B4-1.3-06, Property Condition and Quality of Construction states:

To understand what we mean by “an absolute basis,” it may help to consider these common definitions (from Oxford Languages) of absolute: 

• (adjective) viewed or existing independently and not in relation to other things; not relative or comparative
• (noun) a value or principle which is regarded as universally valid or which may be viewed without relation to other things 

When determining the ratings, the appraiser must not take into consideration comparisons to other properties nor the characteristics of the neighborhood or market area. The only consideration is how the property characteristics align with our rating definitions. 

One important outcome of correctly applying these policies is that, once the appraiser has rated a particular property, it will naturally continue to have the same rating throughout all reports. Thus, the ratings determined by the appraiser when appraising a subject property for a purchase will remain the same if that property is subsequently used as a comparable. 

These same principles apply to View and Location ratings. For example, if a subject property is adjoining a busy street, its location rating must be adverse. Comparables with similar traffic influence would also be rated adverse. It would not be correct for the appraiser to rate them all Neutral because that would be a relative rating rather than absolute. 

Determining ratings on an absolute basis may be challenging for some appraisers because the principal approach to value for residential properties is the sales comparison approach which requires appraisers to consider the relative merits of the subject and the comparables. The key is for the appraiser to first determine the ratings on an absolute basis, then to determine the adjustments on a relative basis.

Market Condition (Time) Adjustments

In a recent internal analysis of appraisals with aged comparables performed during times of rapid home price appreciation (suggesting the need for time adjustments), we found that most comparables were not adjusted for time. When we asked appraisers why not, a common response is that their lender clients discourage time adjustments.

With that in mind, in December 2024 we added two provisions to the Selling Guide in relation to time adjustments.