Appraisal Changes Coming November — How Are You Preparing for AI-Driven Valuations?

[Irene Hunter]

I wanted to start a conversation with investors, flippers, and landlords who are actively refinancing or planning exits in the near future.

I recently got off the phone with Pennsylvania Association of Realtors (PAR), and one of the topics we discussed was the upcoming appraisal changes rolling out this November. Appraisers will be required to use a new, significantly more detailed reporting format (UAD 3.6).

From what I understand, these reports are not just a minor update they’re extremely comprehensive and will be stored in a national database. That means the level of detail captured about a property’s condition, quality, and deficiencies will be far more transparent and permanent than what we’ve seen in the past. This is about how your property is documented and how that data may influence future valuations, especially as AI and automated systems become more integrated into the appraisal process.

For those of you flipping properties or planning to refinance:

• How are you preparing your projects knowing that condition and quality will be documented at a much deeper level?
• Are you changing your scope of work or standards on renovations?
• Are you being more proactive with pre-listing inspections or documentation?
• For BRRRR investors are you concerned about how these reports could impact your ability to recycle capital?

From my perspective, this feels like a shift toward full transparency, where shortcuts (cosmetic flips, overlooked repairs, or inconsistent workmanship) may become more visible. On the other side homeowners may take a huge hit on valuations of their homes, who are unable to keep up with maintenance. These ultra detailed reports using AI may impact valuation outcomes longer term.

Curious to hear how others are thinking about this.
Are you adjusting your strategy, or do you see this as a non-issue?

[Doug Smith]

This is UAD 3.6, which is a reporting overhaul, not an AI valuation mandate. The big change is standardized, more granular data capture, especially around condition, quality, and features, with mandatory adoption for GSE loans on Nov 2, 2026. Appraisers still determine value; what’s different is that the data they submit is cleaner, more structured, and easier for automated review systems to analyze. For investors, the takeaway isn’t ‘AI will kill values,’ it’s that deferred maintenance, inconsistent workmanship, and weak documentation are less likely to be glossed over. Well-executed renovations should be neutral to positive; sloppy cosmetic flips will be more visible.