Big Changes Are Coming to Home Appraisals That Could Be Good News for Homeowners

For more than 20 years, residential appraisers have largely relied on the same traditional appraisal forms when determining the value of a home. Considering how much homes, and the technology used to evaluate them, have changed during that time, an update was overdue.

That update is finally here.

Fannie Mae and Freddie Mac have introduced a major redesign of the residential appraisal process known as UAD 3.6, along with a new Uniform Residential Appraisal Report. The new system is already being phased in and will become mandatory for new appraisal reports submitted to Fannie Mae and Freddie Mac beginning November 2, 2026.

For homeowners, buyers and sellers, we think this is a positive change.

A More Detailed Look at Your Home

One of the biggest improvements is that the new appraisal report allows appraisers to collect and report considerably more detailed information about a property.  Instead of trying to fit every home into a relatively rigid form, the new report is dynamic. The information requested can change based on the property being appraised.

Appraisers will have more opportunities to document things such as:

• The quality and condition of kitchens, bathrooms and other areas of the home
• Dates of significant updates and improvements
• Interior and exterior condition
• Finished and unfinished areas
• Outbuildings, barns, sheds and accessory dwelling units
• Solar panels and other amenities
• Property deficiencies and needed repairs
• Additional property characteristics that may help distinguish one home from another

The new report also places greater emphasis on objective, property-specific data and gives appraisers a better framework for comparing homes side by side.

That's particularly important in areas like Allen, Fairview, Lucas, Parker, McKinney and the rest of Collin County, where two homes with similar square footage can be dramatically different in quality, condition, amenities and level of updating.

Why This Could Be Good News for Sellers Who Take Care of Their Homes

As Realtors, this is the part of the change that interests us the most.  We've always believed that condition matters.

Imagine two similar 20-year-old homes in the same neighborhood. One owner has carefully maintained the property, remodeled the kitchen and bathrooms, replaced aging mechanical systems, installed a new roof and kept detailed records of the work. The other home has received very few improvements since it was built.

Those houses shouldn't necessarily be viewed as interchangeable simply because their basic statistics are similar.

The new appraisal format gives appraisers more tools to document those differences.

That does not mean spending $50,000 remodeling a kitchen automatically adds $50,000 to an appraisal. Appraisers still have to determine what buyers in the market are actually willing to pay for those improvements.

But a more detailed appraisal report should provide a better opportunity for meaningful differences between properties to be identified, documented and analyzed.

For homeowners who have invested significant time and money maintaining and improving their homes, we see that as a good thing.

Start Keeping Better Records of Your Improvements

There's also an important takeaway for homeowners who aren't planning to sell anytime soon:

Keep records of what you do to your house.

We recommend maintaining a simple digital folder containing receipts, invoices, warranties and dates for significant improvements.

That could include a new roof, HVAC systems, windows, water heaters, flooring, kitchen and bathroom remodeling, pool improvements, foundation work, electrical or plumbing upgrades, solar equipment and other substantial projects.

Photos can be useful as well, particularly for improvements that aren't immediately obvious.

When it comes time to sell or refinance, having a concise list showing what was done and when it was completed could make it much easier to provide accurate information to an appraiser.

Sellers and Realtors May Communicate More With Appraisers

Another change we like is that the new process may encourage more fact-based communication between appraisers, homeowners and real estate agents.

There is sometimes a misconception that a Realtor isn't allowed to speak with an appraiser. That's not true. We cannot improperly pressure an appraiser to reach a particular value, but we absolutely can provide relevant, objective information about the property and the market.

Under the new system, useful information could include the executed sales contract and amendments, a survey, a homeowner's list of improvements, information about multiple offers, relevant recent sales, information about off-market transactions and other factual information that helps the appraiser understand the property.

That makes preparation even more important.

When we represent a seller, we don't want the appraiser walking into the property without useful information that could help explain what makes that home different from another sale down the street.

More Accurate MLS Information Will Matter

There's another consequence of this change that may not be immediately obvious: the quality of information entered into the MLS becomes even more important.

Today's listing eventually becomes tomorrow's comparable sale.

If important information about a property is inaccurate or missing when the home is listed, that can create problems later when appraisers are researching historical sales and trying to make accurate comparisons.

As Realtors, we need to do a better job documenting the homes we sell, not simply putting a few basic facts into MLS and moving on.

A Welcome Modernization of the Appraisal Process

No appraisal system is perfect, and these new reports won't completely eliminate disagreements over value.  Appraisers will still use their professional judgment, and ultimately the market, not the amount a homeowner spent on improvements, determines how much value those improvements contribute.

But after more than two decades of relying on essentially the same appraisal forms, moving toward a more detailed, data-driven system makes sense.

A home is much more than its square footage, bedroom count and year built.

Condition matters. Quality matters. Improvements matter. Maintenance matters.

The more accurately those differences can be documented and analyzed, the better information buyers, sellers, lenders and appraisers should have when determining a property's value.

Thinking About Selling Your Collin County Home?

If you've made significant improvements to your home and you're wondering how those improvements could affect its value, we'd be happy to help.

We can review your property, look at the sales that are actually occurring in your neighborhood, and help you identify which improvements and features are most important to document before you put your home on the market.

Reach out to us before you sell, and let's make sure we're telling the complete story of your home, not just its square footage and bedroom count.