The real estate appraisal process is changing! We've all seen the appraisals with the fine print that are 20 - 40 pages long. Figuring out the "subject" property versus other comparable sales requires readers to consume a few cups of coffee to decipher an appraisal report with accuracy. And finding which page contains the appraised value is located in the report takes a bit of tenacity. But that's about to change and change big time!
If you haven't heard yet, appraisers have an updated form, software and methods for appraisals. The new form was introduced January 26, aftering being delayed from September 30, 2025 due to the government shut-down.
Uniform Appraisal Dataset (UAD) 3.6, will be required to be used for every appraisal by November 2, 2026. The previous version was 2.6 and is the appraisal form you're used to seeing. This form by Fannie and Freddie has been an ongoing creation since 2018!
There will be a learning curve for the processing of mortgages as well. Appraisal Management Companies (AMC's) will require training on the form, so education and adoption is key to processing. Some of the specifics of the new form regarding AMC's:
- The new UAD 3.6 form is "dynamic" and is an all in one form for all property types.
- The new summary report is easier for reviewers/lenders.
- Room levels for each room identifies which rooms are on a main floor vs. other floors as a for instance.
This new form uses an expanded method of reporting so that if a feature in a home is listed and an appraiser checks a box "yes," an expanded group of additional questions opens up. What are some of these questions that might expand the page?
While I don't have the form for specifics, I can tell you that listing agents need to be more precise with naming features. Listing agents need to ask specifically WHAT has been remodeled, WHEN a home was remodeled; and HOW much was spent. Sounds pretty basic, but that's what we're supposed to be doing! An easy way to do this is to create the list with specific features itemized by room, including interior and exterior. Have receipts of items that were updated. Ask the sellers more questions and have them to "prove" the remodel for the appraise and provide disclosure to a buyer.
And do not list a home as having "green features" without knowing what features provide better indoor air quality, water savings, or energy saving features. Treat this the same as a remodeled home. Make a list of each feature, specific features, when they were installed, and how much was spent. If those features lowered electric bills, upload the previous electric bills in list form before and after the feature to showcase energy savings. A qualified appraiser who is educated on this topic will ask for utility bills. Interview an appraiser up front and ask how they give value for these features. If they can't tell you, reject the appraiser and tell the mortgage company why.
Solar - I know it's an unknown for a lot of agents. But if you list a home with solar panels, you'll need to know if they are leased, financed, or owned. If the solar panels are owned, you should be uploading the following. BTW, this is nothing new. All of this is required to calculate the value of owned solar panels on PVValue.com.
- Engineering specs/drawings (that include the azymuth)
- Contract reflecting the size of the system, date of purchase,
- Inverter type (single or micro)
- Utility bills before solar and after solar to show energy savings.
Listing agents need to be prepared for longer appraisal calculation times that may cost more. If an appraiser has to stop and call a listing agent to clarify items, and especially more than once, your appraisal will be delayed and could cost more to produce. Those delays can also extend closing dates.
This new form is meant to streamline the processes and make appraisals easier to read. The font is larger, more space is given and features will now be clearly listed.
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