The Biggest Appraisal Changes in Decades Are Almost Here
- 2 days ago
- 7 min read
Most people only think about an appraisal when it becomes a problem.
A buyer is under contract. A lender orders the appraisal. Everyone waits. Then the number comes back, and the whole room either relaxes or starts spiraling. For years, that process has felt familiar enough that most buyers, sellers, agents, and even some industry professionals have not had to think too hard about the actual form behind the valuation.
That is about to change.
Major appraisal changes are coming through UAD 3.6, and while the way appraisers determine value is not being rewritten from scratch, the way appraisal information is collected, organized, delivered, and reviewed is getting a massive overhaul. The shift is big enough that appraisers, lenders, Realtors, buyers, and sellers all need to understand what is coming before it starts affecting real transactions.
The sky is not falling. But the paperwork cloud is definitely getting bigger.
Why The Biggest Appraisal Changes Matter For Buyers, Sellers, and Realtors
The phrase Biggest Appraisal Changes is not an exaggeration here. The appraisal industry has been using the same general format for decades, and UAD 3.6 represents a complete shift in how appraisal reports will be structured.
The most important clarification is this: valuation itself is not changing. Appraisers are still analyzing properties, comparing sales, evaluating market behavior, and determining what a home is worth based on supportable data. The purpose of an appraisal remains risk management for the lender.
What is changing is the form, the data, and the level of detail required.
Instead of the old familiar appraisal forms, the new UAD 3.6 format will be more fluid and data-driven. It is designed to feed cleaner, more standardized information to Fannie Mae and related lending systems. A big part of the shift is tied to better data mining and the growing role of AI in underwriting and valuation review.
That means the appraisal report is expected to become easier for consumers to read over time, but harder for the industry to adjust to at first.
UAD 3.6 Is Coming With a Hard Deadline
The mandatory implementation date discussed is November 2. Once that date hits, conventional loans ordered through the applicable system are expected to move into the UAD 3.6 format.
That timing matters.
If a property goes under contract around that date and the appraisal is ordered on or after implementation, the report may be completed under the new system. For buyers trying to close in 30 days, that could create complications.
The concern is not that appraisers are unwilling to adapt. The concern is that the change is enormous. Appraisers have to learn new software, lenders have to adjust their review processes, underwriters have to understand the new reports, and appraisal software companies have to keep up with a completely new structure.
At the beginning, that could mean delays.
Some appraisers may temporarily step back from conventional work while they get comfortable with the new form. Others may continue but take longer to complete reports. Either way, the first few months could feel bumpy, especially if everyone waits until November to start paying attention.
Reports May Take Longer and Cost More
One of the biggest practical impacts is time.
Under the current process, a good appraiser may spend 15 to 25 minutes inspecting a standard 2,500-square-foot home, then additional time writing the report. Under UAD 3.6, early estimates suggest appraisers may spend one and a half to two hours at the property, plus more time completing the report.
That is not a small adjustment. That is a business-model adjustment.
Because the reports may take significantly more time, appraisal costs may also rise. The industry expectation discussed is that UAD 3.6 appraisals could cost around 50% more than current appraisal reports, at least early on.
That does not mean every appraisal will automatically be unaffordable. It means buyers and sellers should be prepared for appraisal costs to increase when the work takes longer and requires more detailed data.
Real estate already has plenty of surprise expenses. Appraisal sticker shock does not need to be one of them.
Realtors Will Need Better Property Information Up Front
One of the biggest messages for Realtors is simple: better listing information is going to matter more.
Under UAD 3.6, appraisers will need far more detail about the property. That includes things like updates, remodel dates, kitchen condition, mechanical systems, mitigation features, renewable energy components, HOA information, ADUs, mobile home certifications, and even details that may seem oddly specific, such as the height of the front door from the ground.
That level of detail means vague phrases like “totally remodeled” will not be enough.
A home described as “totally remodeled” may not actually be considered totally remodeled from an appraisal or lending perspective. New countertops and inexpensive flooring do not necessarily equal a full renovation if the roof, HVAC, plumbing, and other systems are still older.
The new form is expected to require more specific breakdowns. Instead of simply saying a home is in average or good condition overall, appraisers may need to evaluate individual sections of the property more carefully. The kitchen, bathrooms, mechanical systems, updates, and other components may each need clearer treatment.
That could ultimately make reports more accurate. But it also means lazy listing details will create more work, more questions, and potentially more delays.
The MLS Will Need To Catch Up
A major concern is whether MLS systems have enough fields to support the data appraisers will now need.
Right now, important information often ends up buried, duplicated, or missing. Public remarks, syndicated remarks, and member remarks are frequently copied and pasted from one section to another. But the member remarks section could become much more useful if agents included information that helps explain a property’s marketability or value.
For example, if a home sold at a lower price because of pet odor, condition issues, unusual circumstances, or other relevant factors, that information may help an appraiser understand the sale. The same goes for important updates, HOA details, ADU information, and property features that affect value or marketability.
The Greenville MLS is expected to make changes to accommodate UAD 3.6, but that kind of system change is not as simple as “just add a box.” The coding, structure, and workflow have to catch up to what the appraisal industry now needs.
Until then, missing data may result in more “unknown” fields, and more unknowns can slow the review process.
Permits Could Become a Bigger Deal
Another important change is the increased focus on whether property improvements were legally permissible and properly permitted.
If a homeowner added living space, converted a porch, built an addition, or created another feature that contributes value, appraisers may need verification that the work was permitted. If that cannot be verified, it may not be included in the gross living area for lending purposes.
This could matter a lot for older homes with additions, mill homes that have been changed over generations, and properties where improvements were completed without clear documentation.
For very old updates, verification may be difficult or impossible. The bigger concern is the more recent work. If a seller adds 400 square feet in 2026 and lists the home in 2027, the listing side should be ready to confirm that the addition was permitted.
For Realtors, this means one more front-end question needs to become normal: what was done, when was it done, and was it permitted?
Basements, ADUs, and Property Details Should Become Clearer
The conversation around basements is another reminder that appraisals are often misunderstood.
Under ANSI standards, if one inch of one wall is below grade, the space is treated as basement space. But that does not automatically mean basement square footage is worth only 50% of above-grade square footage. That kind of blanket rule is misleading.
A basement in a mountain home may function very differently from an old, damp basement in another neighborhood. The value depends on the market, the condition, the layout, and what buyers are actually willing to pay.
UAD 3.6 does not change the valuation logic, but it should make reports clearer and easier to understand.
Accessory dwelling units are another big area. ADUs are becoming more relevant as affordability pressure increases and more families consider multigenerational living or income-producing setups. The current MLS structure does not always capture ADUs well, but under the new appraisal format, they may need their own clearer section with information about size, heating and cooling, flooring, kitchen setup, rental potential, and more.
The New Reports May Be Better Once Everyone Adjusts
For all the short-term headaches, UAD 3.6 may ultimately improve the appraisal process.
The new reports should be more standardized, easier to read, and more useful for lenders and consumers. They should also allow appraisers to better identify which features actually contribute to value.
Instead of making broad adjustments for overall condition, appraisers may eventually be able to isolate specific features more clearly. A better kitchen, a stronger trim package, an encapsulated crawl space, or a higher-quality renovation may be easier to analyze when the data becomes cleaner and more consistent.
The early stage may be messy. But the long-term goal is a better report with better information.
How To Contact Chris White
Chris White is with Carolina Appraisal Partners.
📞 (864) 809-6546
For home measurements, pre-listing appraisals, and other appraisal-related needs outside of lender-ordered bank appraisals, he can be found at SCAppraisers.com.
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Bottom Line
The Biggest Appraisal Changes in decades are not about changing what homes are worth. They are about changing how appraisers collect, organize, explain, and submit the data behind that value.
For buyers and sellers, that may mean longer turnaround times and higher appraisal costs at first. For Realtors, it means better listing details, stronger documentation, clearer permit history, and more complete property information will matter more than ever.
For appraisers, it means a steep learning curve. For lenders and underwriters, it means adjusting to a more data-driven review process. And for the market as a whole, it means everyone involved in a transaction needs to get a little more proactive.
The people who prepare now will handle the transition better. The people who wait until a closing is delayed will learn the hard way.
Ien Araneta
Journal & Podcast Editor | Selling Greenville
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