Newsletters

• Director's Message – Introduction and Broker Supervision
• Proposed Real Estate Purchase Contract (REPC) Changes
• Redaction of Complaints
• Rule Developments
• Division Staff Spotlight
• Licensing & Renewal System Upgrade
• Second Quarter Licensing & Disciplinary Actions
• National Association of REALTORS ® (NAR) Settlement & Division Rules
• Kagie's Korner - Video & Social Media Postings
• Dual Brokers & Property Management Sales Agents
• Complete Transaction Files & Time Management
• 2024 Caravan Recap
• 2024 IDW Announcement
• Recapping Subjective Language & New Motto: Show Me Your Work!
• Newsletter feedback QR code
• Social Media Links
• Credits

The Division has traditionally redacted complainant information on complaints in accordance with the Government Records Access and Management Act (GRAMA), a practice that is both lawful and appropriate. However, the Division has chosen to alter this approach.

Now, the default procedure will entail non-redaction. Nevertheless, the Division retains full discretion in redacting complainant information under GRAMA or any other relevant law.

For further information, please see our complaint submission webpage here.

The Division is undergoing a vast and much-needed system upgrade to significantly enhance its capabilities. Many features have moved from the existing Real Estate License Management System (RELMS) to the new My License One system. This transition from RELMS marks a notable improvement in how license management is handled by streamlining many processes to benefit both current and new licensees. Managing and applying for a new license will be much easier. Currently, the following features are now available on the new My License One website:

• Apply as a New Sales Agent - All Types
• Print License Copy
• View License
• View Receipt
• Name or Address Change Request
• Renew a Sales Agent license
• Renew a Principal Broker License
• Renew an Associate Broker license
• Renew a Branch Broker license.

We continue to work on adding more features to the new My License One website. Please note that the following functions are still available to access in RELMS:

• Order a license history
• Change license status
• Change license affiliation - Agents
• Order a duplicate license
• View current CE courses taken
• Manage a Company roster
• Renew a Dual Broker license

Please remember that because this is an ongoing project, you may need to check the Division website frequently to determine which website you must visit to perform certain license management functions.  

While we understand that these changes can sometimes be confusing and frustrating initially, we are very excited about these upgrades and appreciate the continued patience of our new and existing licensees. 

Please note that Utah law allows 30 days for appeal of an order. Some of the actions below might be subject to this appeal right or currently under appeal. 

To view a copy of an order referenced in this article, please visit the Utah Division of Real Estate Website under the Enforcement Menu, Disciplinary Actions 

https://realestate.utah.gov/realestate/index.html

CHISHLOM, JOE FOLZ, licensed appraiser, Salt Lake City, Utah.  In a stipulated order dated May 22, 2024, Mr. Chishlom admits that he violated Utah law and the Uniform Standards of Professional Appraisal Practice (USPAP) when he completed a complex assignment without being state-certified.  The assignment involved a duplex in a general commercial zone.  Mr. Chishlom violated USPAP rules of competency and scope of work. The stipulation also notes errors in following USPAP Standards, including general development requirements, problem identification, market analysis, approaches to value, reconciliation, and general reporting requirements.   Mr. Chishlom agreed to pay a civil penalty of $5,000 and to complete 16 hours of continuing education in addition to the continuing education required for his next license renewal.  DRE number AP-21-131892

EATON, JEFFERY, certified residential appraiser, Riverton, Utah.  In a stipulated order dated April 24, 2024, Mr. Eaton admits that he failed to comply with generally accepted standards of professional appraisal practice with regard to the selection of comparable sales in completing an appraisal assignment, in violation of Utah law and the Uniform Standards of Professional Appraisal Practice.  Mr. Eaton agreed to pay a civil penalty of $2,000 and to complete eight hours of corrective continuing education in addition to the continuing education required for his next license renewal.  Docket number RE-24-5059 and DRE No. AP-21-125465

MCAFEE, ROBIN, certified residential appraiser, Ephraim, Utah.  In a stipulated order dated May 25, 2024, Ms. McAfee admits to having violated Utah law and the Uniform Standards of Professional Appraisal Practice (USPAP) in that she failed to comply with generally accepted standards of professional appraisal practice, including violations of the ethics, record keeping, competency, and scope of work rules.  The stipulation notes errors in following USPAP Standards, including general development requirements, problem identification, market analysis, approaches to value, reconciliation, general reporting requirements, and content of a real property appraisal report.  Ms. McAfee agreed to pay a civil penalty of $3,000 and take a total of 12 hours of corrective continuing education in addition to the continuing education required for her next license renewal, including on the subjects of ethics, competency, negligence, scope of work, appraisals, and inspections, and missing explanations.  Docket number RE-24-5063 and DRE No. AP-2022-131968

TIPPETTS, JAMES, certified residential appraiser, Draper, Utah.  In a stipulated order dated May 22, 2024, Mr. Tippetts admits to having violated Utah law and the Uniform Standards of Professional Appraisal Practice when he appraised a two-story office building.  The property owner had remodeled a portion of the second story of the building into residential living space.  Mr. Tippetts completed the appraisal as if it were a residential building.  The stipulation notes numerous errors in the appraisal report.  Mr. Tippetts is not certified to appraise property with commercial implications.  He agreed to pay a civil penalty of $5,000 and to complete eight hours of corrective education, including courses addressing scope of work, assignment conditions, elements, and results, in addition to the continuing education required for his next license renewal.  Docket number RE-24-5058 and Division case number AP-20-116839

SRE.COM, SRE TECHNOLOGIES, INC., and SRE MORTGAGE ALLIANCE, INC., unlicensed mortgage entities, in Hawaii and Utah.  In an order dated May 22, 2024, a permanent order was entered prohibiting the SRE entities from engaging in the residential mortgage business in Utah unless they become licensed under the Utah Residential Mortgage Practices and Licensing Act.  Case No. MG-2022-132721

STANLEY, RYLEE, unlicensed, South Jordan, Utah.  In a stipulated order dated May 1, 2024, Ms. Rylee admits that prior to becoming licensed, she offered proposed mortgage terms and emailed a fee sheet to a would-be borrower using the title of “Mortgage Advisor”.   Ms. Stanley was not licensed at the time of her communications with the would-be borrower but did obtain her license afterwards.  Her conduct was in violation of Utah law requiring licensure.  Ms. Stanley agreed to pay a civil penalty of $3,000.  Docket number RE-24-5054 and DRE No. MG-20-119361

STEVENS, JOHN GLEN, mortgage loan originator, Highland, Utah.  In an order dated May 22, 2024, a permanent order was entered prohibiting Mr. Stevens from engaging in the residential mortgage business in Utah unless he becomes licensed under the Utah Residential Mortgage Practices and Licensing Act.  As of the date of this writing, Mr. Stevens is a licensed mortgage loan originator with an inactive license.  He will need to affiliate with a mortgage lender and lending manager before engaging in the business of residential mortgage loans.  Case No. MG-2022-132721

BEARDSLEY, JEREMY PAUL, sales agent, West Jordan, Utah.  In an order dated April 2, 2024, Mr. Beardsley’s license was reinstated, and due to a criminal matter occurring during the prior licensing period, his license was placed on probation for the renewal period.  Docket number RE-2024-030

BEAN, CLINT, sales agent, Wales, Utah.  In a stipulated order dated April 17, 2024, Mr. Bean admits to violations of Utah law and administrative rules.  Mr. Bean listed a property for sale on the MLS and disclosed in the listing that he had an interest in the property.  The listing indicated that FHA funding would be accepted.  A title report revealed that Mr. Bean was not named as an owner at the time of the listing.  The property went under contract with a provision for FHA funding.  The prospective buyer incurred inspection and appraisal costs.  Later, a title company informed the buyer that Mr. Bean was not the owner of record. Within a day, a warranty deed was recorded, transferring ownership of the property to Mr. Bean.  FHA guidelines prohibit FHA funding for a purchase if the current property owner has owned the property for less than 90 days.  Without the opportunity for FHA funding, the buyer canceled the transaction.  To resolve the matter with the Division, Mr. Bean agreed to pay a civil penalty of $4,000 to complete nine hours of continuing education in addition to the continuing education required for his next license renewal and that his license would be on probation until July 31, 2025.  Docket number RE-2023-5030 and Division case number RE-19-114050

BEAS, CLAUDIA DORITA LILA, sales agent, South Jordan, Utah.  In an order dated May 16, 2024, Ms. Beas’s license was reinstated, and due to a criminal matter pending as of the date of her renewal, her license was placed on probation.  Docket number RE-2024-046

BLAS, HENRY, sales agent, Provo, Utah.  In an order dated April 17, 2024, Blas’s application to renew his license to practice as a real estate sales agent was denied due to a felony conviction in a criminal matter.  Docket number RE-2024-038

BRADSHAW, MAX CANNON, sales agent, Salt Lake City, Utah.  In an order dated March 6, 2024, Mr. Bradshaw’s license was granted, and placed on probation for the initial licensing period due to criminal history.  Docket number RE-2024-024

GOMEZ, JAIRO A., sales agent, Salt Lake City, Utah.  In an order dated March 1, 2024, Mr. Gomez’s license was reinstated, and due to a plea in abeyance agreement in a criminal matter occurring during the past licensing period, his license was placed on probation for the renewal period.  Docket number RE-2024-023

HANSEN, BLAKE F., sales agent, South Jordan, Utah.  In an order dated April 2, 2024, Mr. Hansen’s license was renewed and immediately suspended due to a conviction in a criminal matter, a pending criminal charge in another case, and unpaid state tax liens.  The suspension Mr. Hansen’s license will be terminated, and his license be either revoked or placed on probation, depending on the resolution of the pending criminal charge.  Docket number RE-2024-028

HONEY, TERRIL SHELDON, sales agent, Kanab, Utah.  In an order dated March 6, 2024, Mr. Honey’s license was renewed, and due to a criminal matter occurring during the past licensing period, his license was placed on probation for the renewal period.  Docket number RE-2024-025

JANICKI, LUKE JAMES, sales agent, West Jordan, Utah.  In an order dated April 27, 2024, Mr. Janicki’s license was granted, and placed on probation for the initial licensing period due to criminal history.  Docket number RE-2024-041

JENSEN, BLAKE, sales agent, Bountiful, Utah.  In an order dated April 4, 2024, Mr. Jensen’s license was renewed, and due to a criminal matter occurring during the past licensing period, his license was placed on probation for the renewal period.  Docket number RE-2023-034

JENSEN, MICHAEL C., sales agent, Salt Lake City, Utah.  On April 4, 2024, the Division issued a citation to Mr. Jensen for advertising on social media without identifying the brokerage with which he is affiliated.  The citation assessed a fine in the amount of $500.  Docket number RE-2024-033 and Division case number 1454192

JUDD, ANNETTE MARIE, principal broker, West Point, Utah.  On May 21, 2024, the Division issued a citation to Ms. Judd for advertising property for sale without having first obtained the written consent of the property owners and the listing brokerage.  The citation assessed a fine in the amount of $1,000.  Case number 152525, Docket number RE-2024-048

LARA, MOSIAH, sales agent, Provo, Utah.  In an order dated May 31, 2024, Mr. Lara’s license was renewed, and due to a plea in abeyance agreement in a criminal matter occurring during the past licensing period, his license was placed on probation for the renewal period.  Docket number RE-2024-050

LEES, ADAM, sales agent, Cottonwood Heights, Utah.  On April 4, 2024, the Division issued a citation to Mr. Lees for advertising on social media without identifying the brokerage with which he is affiliated.  The citation assessed a fine in the amount of $500.  Case number 143366, Docket number RE-2024-032

LUND, TERRAH, sales agent, Park City, Utah.  In a stipulated order dated April 17, 2024, Ms. Lund acknowledges that the Division and Commission are authorized and required to determine whether an Applicant qualifies for renewal of her license to practice as a real estate sales agent.  She admits to having recently entered guilty pleas to criminal charges.  Ms. Lund agreed that her license should be renewed with restrictions, including that her license would be suspended for three months and, following the suspension, her license would be on probation for two years.  Docket number RE-2024-009

LYNCH, TAYLOR CHRISTINE, sales agent, Orem, Utah.  In an order dated April 2, 2023, Ms. Lynch was granted a license to practice as a real estate sales agent.  Her license was placed on probation for the initial licensing period due to a recent plea in abeyance agreement in a criminal matter.  Docket number RE-2023-042

MORI, STEVE, sales agent, Sandy, Utah.  In an order dated April 3, 2024, Mr. Mori’s license was renewed, and due to a criminal matter occurring during the past licensing period, his license was placed on probation for the renewal period.  Docket number RE-2024-031

POOLE, AMY, sales agent, St. George, Utah.  In an order dated April 16, 2024, Ms. Poole’s license was renewed, and due to a criminal matter occurring during the past licensing period, her license was renewed, immediately suspended for 90 days, and placed on probation for the remainder of the renewal period.  Docket number RE-2024-037

RADDON, JESSE R., sales agent, South Jordan, Utah.  In an order dated May 16, 2024, Mr. Raddon’s license was granted on probation for the initial licensing period due to a recent criminal matter and unpaid tax liens.  Docket number RE-2024-047

RODRIGUEZ, ISLE NALLEY AMADOR, sales agent, South Jordan, Utah.  In an order dated May 1, 2024, Mr. Rodriguez’s license was renewed, and due to criminal matters occurring during the past licensing period, his license was placed on probation for the renewal period.  Docket number RE-2024-045

SCHUTJER, MATTHEW T., sales agent, Salt Lake City, Utah.  In an order dated April 26, 2024, Mr. Schutjer’s license was reinstated, and due to a criminal matter occurring during the past licensing period, his license was placed on probation for the renewal period.  Docket number RE-2024-043

THOMPSON, TRISHA ANN, sales agent, Syracuse, Utah.  On April 4, 2024, the Division issued a citation to Ms. Thompson for advertising on social media without identifying the brokerage with which she is affiliated.  The citation assessed a fine in the amount of $500.  Case number 149938, Docket number RE-2024-035

VIELSTICH, MICHAEL S., sales agent, Salt Lake City, Utah.  In a stipulated order dated March 20, 2024, Mr. Vielstich admits that he sent out a standard mailing offering to purchase property.  The mailing did not disclose that he is a licensed sales agent and did not include the name of his brokerage, in violation of Utah administrative rules.  Mr. Vielstich agreed to pay a civil penalty of $1,000 and to complete three hours of continuing education in addition to the continuing education required for his next license renewal.  Docket number RE-2024-5052 and Division case number RE-21-127917

BENSON, JORDAN ANTHONY, timeshare salesperson, Cottonwood Heights, Utah. In an order dated April 30, 2024, Mr. Benson’s application for registration as a timeshare salesperson was denied due to his criminal history and his failure to fully disclose his criminal history in his application.  Docket number RE-2024-044

SANTOS, MARK A., timeshare salesperson, Salt Lake City, Utah.  In an order dated April 9, 2024, Mr. Santos’s application for registration as a timeshare salesperson was denied due to his failure to disclose his criminal history in his application.  Docket number RE-2024-036

Part of the NAR Settlement included the NAR agreeing to enact a rule requiring multiple listing service (MLS) participants working with buyers to enter into a written buyer agreement. Utah has required written buyer agency agreements for many years.  However, the recent settlement has created some confusion for Utah licensees. We would like to help clarify Utah law and the current obligations of Utah licensees. 

Current Real Estate Rule Utah Admin. Code R162-2f-401a(2) requires licensees to execute a written buyer agency agreement when representing a buyer. 

R162-2f-401a.  Affirmative Duties Required of Licensed Individuals.

An individual licensee shall:

(2)  define the scope of the individual's agency by executing a written agency agreement between the individual and the individual's principal, including:

(b)  buyers the individual represents;

This is an affirmative duty. If you represent a buyer, you must obtain a written agency agreement outlining the terms of your representation.

But when must you execute the buyer agency agreement?

Utah Admin. Code R162-2f-401a(6) requires licensees to disclose, in writing, their agency relationships before executing a binding purchase agreement. 

R162-2f-401a.  Affirmative Duties Required of Licensed Individuals.

An individual licensee shall:

(6)  before the execution of a binding purchase or lease agreement, disclose in writing to clients, agents for other parties, and unrepresented parties:

(c)  the licensee's agency relationships;At a minimum, licensees must execute the buyer agency agreement before drafting the purchase agreement. This is the minimum standard; however, licensees should consider obtaining agency earlier in their interactions whenever possible. This will help to proactively educate your clients on the duties you will be performing during your agreement and inform them of the fees associated with your representation.  Discussing and entering into buyer agency agreements early in your transactions will help establish trust and mutual obligations and protect licensees’ valuable time spent with potential clients.  

A new trend the Division is concerned about involves a licensee touring a property, recording a video of the property, and subsequently posting the video to a social media platform.  Obviously, the listing agent may post a video of the property after obtaining written authorization from the property owners and the listing brokerage. However, the Division has significant and appropriate concerns when a licensee posts a video of a property that is not their own listing and without the property owners’ written authorization.

The Division has investigated a few cases involving this type of advertising, and two licensees have been sanctioned. Each sanctioned licensee received a civil penalty of $5,000 for violating one or more of the following Statutes or Administrative Rules:

R162-2f-401b.  Prohibited Conduct As Applicable to Licensed Individuals.

(1)  An individual licensee may not:

(q)  advertise or offer to sell or lease property without the written consent of:

   (i)  the owners of the property; and

            (ii)  if the property is currently listed, the listing broker;

R162-2f-401b.  Prohibited Conduct As Applicable to Licensed Individuals.

(1)  An individual licensee may not:

(a)  engage in any of the practices described in Section 61-2f-401 and the following sections, whether acting as agent or on the licensee's own account, in a manner that:

(i)  fails to conform with accepted standards of the real estate sales, leasing, or management industries;

(ii)  could jeopardize the public health, safety, or welfare;

This topic was recently addressed in the annual Division CARAVAN presentations. Several licensees mistakenly believed this was an acceptable practice because of the MLS agreement regarding IDX feeds. 

Remember, you must have written authorization from the sellers to advertise any property. And don’t forget to include your brokerage information in all advertising. Stay safe and lawful out there!

For the past eight years, sales agents working for a property management (“PM”) company under a Dual Broker have been allowed to perform both PM and real estate sales activities (however, only if authorized as a Property Management Sales Agent (PMSA)).  

To remind you and help you better understand this licensing structure, you should recall that a dual broker is the only real estate broker able to simultaneously supervise and manage two separate brokerages under two different company names. A dual broker can supervise a full-service real estate brokerage, which has the ability to perform both sales and PM transactions and supervise a PM company. However, the PM company is restricted to exclusively performing only PM transactions, thus confining licensees from performing any real estate listing or sales activities while affiliated with the PM business.  This singular circumstance only arises with a PM company under a Dual Broker. 

As mentioned in the first paragraph of this article, there is a unique circumstance where a licensee affiliated with the property management company can also affiliate with the real estate firm of the dual brokerage.  Section 61-2f-102(22) of the Utah Code states:

"Property management sales agent" means a sales agent who:

(a) is affiliated with a dual broker through the dual broker's property management company and

(b) is designated by the dual broker as a property management sales
agent

Section 61-2f-206(7) further outlines how this process occurs:

(c) A sales agent who is affiliated with a dual broker may act as a property management sales agent if:

(i) the dual broker designates the sales agent as a property management sales agent and

(ii) the sales agent pays to the division a property management
sales agent designation fee (currently $50) as determined by rule

(d) A property management sales agent may simultaneously provide both
property management services and real estate sales services under the
supervision of a dual broker as provided by the commission with the
concurrence of the division by rule

The PMSA designation does not allow a licensee to work for two different brokers.  

Licensees affiliated with the PM company of a Dual Broker who are interested in obtaining this PMSA designation need to fill out an application that can be found  here: 

https://realestate.utah.gov/wp-content/uploads/2023/03/property-management-sales-agent-designation.pdf

The sales agent or associate broker must have their broker sign the application, which must be submitted to the Division with a $50.00 application fee. 

The Division believes that with the introduction of the PMSA designation, licensees affiliated with a PM brokerage of a Dual Broker now have the ability to provide the full range of brokerage services that any other licensee affiliated with a real estate brokerage can perform.

When the Division of Real Estate notifies you that a complaint has been submitted, you will be asked to provide a written statement concerning the allegations and a copy of all relevant documents, otherwise known as “The Transaction File,” for the property and client. You have 10 days to submit a copy of your written statement and transaction file to the division once notified of a complaint; see Utah Code 61-2f-401(18) and Utah Admin. Code R162-2f-401a(25). 

Your brokerage is the primary repository for obtaining a transaction file because brokers have record-keeping requirements, see Utah Admin. Code R162-2f-401k, and are responsible for keeping and maintaining records. Each licensee must submit the following records for retention with their broker:

1. Any document submitted by a licensee affiliated with the principal broker or affiliated with the principal broker to a lender or underwriter as part of a real estate transaction; 
2. Any document signed by a seller or buyer with whom the principal broker or licensee is required to have an agency agreement and
3. Any document created or executed by a licensee over whom the principal broker has supervisory responsibility. 

All transactions differ, so what documents do you submit to your broker? Let’s start with the basics: 

1. Agency agreements;
2. Purchase contracts;
3. Multiple contracts for purchase;
4. Disclosures, including Seller’s Disclosures;
5. Settlement Statements;
6. Change Forms;
7. All communications with relevant parties, including email and text messages;
8. Other pertinent transaction documents as necessary; and
9. All Failed Transaction Documents.

Many licensees won’t collect their commission check until their office manager receives the required broker documents for retention. Submitting these records to your broker is a built-in safety valve for licensees because having these records fully executed and in your brokerage file will keep you protected from unsubstantiated complaints. 

The Division is concerned that each licensee informs their clients of the responsibilities outlined in the transactional paperwork required by each broker. If you take the time to fill out each transaction document, explain each document to your clients, and have them sign that they received the documents, you will be protected from many potential issues. 

Collecting and Submitting Complete Transaction Files

Utah law may hold you personally accountable if you don’t turn in all transaction documents to your broker. Utah Code Subsection 61-2f-401(9) describes the records required to be made available for inspection when requested by the Division, including: 

1. the names of buyers, sellers, lessees, and lessors;
2. the identification of real estate; 
3. the sale or rental price;
4. money received in trust;
5. agreements or instructions from buyers, sellers, lessees, and lessors; and
6. any other information required by rule.

If you don’t turn in these records to your broker, you may be violated for not keeping transactional records available to submit to the Division. 

Time Management for Administrative Tasks

If you struggle with managing your transactional paperwork and are not submitting a complete transaction file to your broker for each sale, try some time management techniques for administrative tasks. Set a clear plan to submit all records to your broker by allocating specific time blocks for administrative tasks and transaction file collection each week. You’ll be amazed at how quick and simple this process of maintaining your files is. 

You could use a schedule like this: 

Making transaction file maintenance part of your weekly routine will improve professionalism with your clients and broker. It’s imprudent and embarrassing to ask your client to sign an important document that includes mid-transaction disclosures at settlement. Clients need time to carefully consider disclosures about a transaction to make informed decisions during the contractual period. Producing unsigned disclosures to your clients is a “red flag” that fiduciary duties to your client might be compromised…..and we do get complaints about late disclosures presented by licensees to clients at the settlement table. 

Use your brokerage checklist or create a checklist to track the individual documents required in a transaction file to ensure that all documents are fully executed and turned in to your broker on time.  Back up your good work by submitting your primary mode of communication, texts, and emails to your broker. Texts and emails are written notifications, proving many complainants' allegations incorrect. 

If you receive a complaint, having a complete transaction file ready for submission can often resolve it quickly. When the Division reviews the transaction file, we frequently close the complaint without issue because the documents in your transaction file demonstrate that you have fulfilled your fiduciary duties and fully represented your client.

Recently appointed Division Director Leigh Veillette led Division staff members Kadee Wright (Chief Investigator), Mark Fagergren (Licensing & Education Director), Sandra Bargas (Real Estate Education Coordinator), and Lark Martinez (Mortgage Education Coordinator) on a training tour throughout the state of Utah. This year, the CARAVAN training tour included nine stops.

Director Veillette opened CARAVAN by introducing herself to the attendees and speaking a bit about her educational and professional background.  Director Veillette then highlighted meaningful statutory changes that occurred and several that failed in the 2024 General Legislative Session.  The legislation discussed has a meaningful or potential impact on the real estate, mortgage, and appraisal industries that the Division regulates.

Kadee Wright presented enforcement statistics and numerous interesting yet troubling enforcement cases involving licensees in the real estate, mortgage, and appraisal industries. 

Mark Fagergren discussed the phase-out of the Real Estate Licensing System (RELMS) and the rollout of the new My License One (ML1) Licensing System. He then shared important changes and helpful reminders impacting the real estate, appraisal, and mortgage industries.

The interactions, discussions, and feedback held before, during, and following each CARAVAN session provided evocative insights into the concerns and interests of our many stalwart licensees.  These are challenging and difficult times with constant changes and new opportunities for success in our business careers, in our communities, and society in general.

The Division thanks those attendees, both “first timers” and regulars, many of which have been attending CARAVAN sessions for decades.  We applaud and thank each of you and wish you all the best now and in the future.  See you again next year!

In late 2021, a wave of change swept the Federal National Mortgage Association (Fannie Mae) as they got serious about prohibited language in reports.  They announced a crackdown on subjective terms and language related to protected classes like race and ethnicity.  The message was clear: reports should stick to the facts, not personal opinions or language relating to protected classes, subjective terms, or terms suggesting exclusivity.  Initially, due to Fannie Mae’s crackdown, over 1,500 appraisers found violation letters in their inboxes highlighting unacceptable phrases and statements.

Over the past three years, a handful of complaints about bias have reached the Division. Fannie Mae flagged the following words within Utah appraisals:  “Gentrification,” “Regentrification,” and “Temple.”

Have you ever wondered what other words might raise a red flag in Fannie Mae and Federal Home Loan Mortgage Corporation (Freddie Mac) reports?  The Division compiled a list from Fannie Mae and Freddie Mac guides in response to Utah appraiser requests. 

• Affordable
•  Amenities geared toward specific race, ethnicity, or religious groups
•  Average (without foundation for analysis and context)
•  Baby Boomer
•  Bad (without foundation for analysis and context)
•  Birthplaces of residents within the property or neighborhood
•  Church
•  Considerations of age
•  Considerations of color
•  Considerations of disability
•  Considerations of familial status
•  Considerations of gender identity
•  Considerations of marital status
•  Considerations of national origin
•  Considerations of race
•  Considerations of religion
•  Considerations of sex/ sexual orientation
•  Crime rate or related data
•  Desirable / Undesirable
•  Diverse school system
•  Exclusive
•  Exercise of any federally protected civil right
•  Fair (without foundation for analysis and context)
•  Fast (without foundation for analysis and context)
•  Generation X
•  Gentrification / Gentrified / Regentrification
•  Good (without foundation for analysis and context)
•  High (without foundation for analysis and context)
•  House of Faith, House of Worship
•  Inexpensive
•  Inner City
•  Integrated
•  Low (without foundation for analysis and context)
•  Millennials
•  Prestigious
•  Pride of Ownership, no pride, lack of pride
•  Poor (without foundation for analysis and context)
•  Preferred Community
•  Rapid (without foundation for analysis and context)
•  Safe (without foundation for analysis and context)
•  Slow (without foundation for analysis and context)
•  Strong (without foundation for analysis and context)
•  Students
•  Temple
•  Up and coming
•  Well kept
•  Weak (without foundation for analysis and context)
•  Within walking distance of a school
•  Within an easy drive
•  Working Class

This list is a good starting point, but it’s not the be-all and end-all.  This list highlights some potential pitfalls, but the key is to focus on quantifiable facts whenever possible.  Skip the online copy-and-paste process of demographic data.  Who needs subjective opinions when you have objective, cold, hard data at your fingertips?

For additional resources, see:

Fannie Mae:

B4-1.1-04, Unacceptable Appraisal Practices

Appraiser Update March 2024

Appraiser Update June 2023

Freddie Mac:

Guide section 5603.4.

New and Insights Unacceptable Practices

The good news is that appraisers have gotten the message to remove all prohibited language within appraisals.  Remember those initial warning letters that went out in the Fall of 2021?  In 2022, a whopping 79% of appraisers who received a letter showed compliance, with no new bias flags in their reports.  But it gets even better!  By 2023, that number jumped to a stellar 91%.  Freddie Mac also reports a steady decline in “trigger rates” – that fancy term for how often reports get flagged for potentially biased words or subjective language.  The downward trend continued throughout the latter half of 2023.

The takeaway?  Appraisers are making big strides toward objective reporting for everyone.  But here is what appraisers should be aware of moving forward.

Danny Wiley, at the Spring 2024 AARO conference, announced a new major pivot for Freddie Mac.   The focus?  Moving beyond simply flagging words in reports.  The new game plan focused on the process, analysis, and adjustments within appraisals.

Nationwide, property values soared after the COVID outbreak. Freddie Mac identified a curious trend during that period. While home prices were on the rise, there was a surprising 15% drop in the price per square foot, GLA adjustment within appraisals. This trend doesn’t match the overall price increase, states Freddie Mac, so Freddie Mac is digging deeper.

What is Freddie Mac’s response?  Forget the implied expectation of “trust me” for appraisal adjustment explanations, states Mr. Willey.  In a major shift, Freddie Mac is putting the kibosh on unsubstantiated report adjustments.  Their new mantra? “SHOW ME YOUR WORK!”

From now on, appraisers won’t get a pass on flimsy justifications or relying on “appraiser knowledge” for an explanation of adjustments.  Freddie Mac will be on the hunt for concrete evidence to support market condition analysis and adjustments.  This means reports must be backed by solid data on market conditions, clear explanations, and not just gut feelings.

Freddie Mac’s Chief Appraiser recommends, “Appraisers should perform a market condition analysis every time, in every market.”

Imagine crafting an appraisal report that’s thorough and powered by cutting-edge tools.  Think about it - tools and technology for market condition analysis, development of adjustment support, and property inspection can revolutionize the appraisal process.  By leveraging these innovations, you can ensure that your report is comprehensive and consistent with measurements and floor plans. 

But why is this a big deal? One word: transparency!  By clearly outlining the tech toolbox used throughout the appraisal process, you lend support for your adjustments and allow others to see the data-driven foundation of your work.  This transparency doesn’t only justify your valuations; it elevates the entire appraisal process, making it more reliable, credible, and insightful for all readers of your report.   

So, what can appraisers do moving forward?  Start by examining your report.  Can it stand on its own without you there to explain the process or results?  If not, it’s time to add the story of what you did, why you did it, and how you did it.

Remember, “Show Me Your Work” is the new motto moving forward.  By clearly narrating the steps you took, the reasons behind your decisions, and the methods you employed, you ensure that your report is not only informative but also transparent and trustworthy.  This approach doesn’t just strengthen your appraisal; it enhances its credibility and value and keeps you in compliance and out of hot water, making it a powerful tool that speaks for itself.

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