New Appraisal Rules for Finger Lakes Buyers and Sellers

By Vicki Schamel

Has been a dedicated Realtor for over 30 years. She first entered real estate to balance work and raising her two young daughters, but it soon grew into a lifelong passion.

Fannie Mae and Freddie Mac have rewritten the rules for home appraisals. It comes just when you think real estate has had enough changes, and this one is really important for both buyers and sellers.

Both are government-sponsored companies that help keep mortgage money available. They buy mortgages from banks, which frees up money the banks can lend to the next buyer. Their new appraisal standard is called UAD 3.6, and you’re going to see it come up in the market.

Appraisals take longer and cost more. Once you make a purchase offer, you’ll pay for an appraisal, and under the new rules, it’s wise to assume the appraisal process may take longer. A lot of the banks using the new rule will tell you that an appraisal that used to cost $400 or $500 now adds another $100 to $200. Keep both in mind when you’re getting ready to buy a home.

Conventional appraisals may now flag repairs. Your appraisal could also come back listing repairs that need to be made. FHA and VA loans have always carried a list of required repairs, and now conventional loans may as well. Be sure of exactly what you’re doing with your purchase offer, and talk it through with your agent.

An appraisal isn’t a home inspection. Even with everything that’s changing, the appraisal still doesn’t replace your home inspection. The two are totally different, so don’t treat either one as a stand-in for the other.

Sellers should prepare before listing. If you’re selling, I recommend getting ready before putting your home on the market. The appraiser who comes into your home will be looking at a lot of additional things. Today the MLS has checkboxes for details like the type of floors and the number of rooms, and appraisers will want even more detail than that.

Pulling that detail together can take some time. Owners who’ve lived in a home for many years, or who own an older home, often haven’t paid much attention to the improvements they’ve made along the way.

Most local banks are starting now. The new rules took effect November 2, and a lot of banks began using them right away. Some lenders can get a waiver that pushes their start date to next spring, but most local banks I’ve talked to aren’t asking for one. For buyers and sellers here, the change is already underway.

This is brand new, but there’s no reason to be afraid. I’ve seen a couple of the new reports, and they’re a lot easier to read than the old ones. Rather than count this as a negative, let’s work it as a positive, and I’d love to help you get there whether you’re buying or selling.

For sellers, I’ve put together a free two-page list. It covers what to be prepared for when an appraiser comes to your home and what to be ready to do when you list your home. The list is simple to look at, and it’s yours if you send me a quick message. Call or text me at 607-351-6933, email vickischamel@kw.com, or visit fingerlakesrealestatereports.com. I look forward to helping you get ready.