Appraiser jargonDon't you just hate jargon? You've maybe heard an appraiser use terms you don't understand, or simply heard terms used in conversation and were too afraid to ask the question... Fear not, we've compiled a list of some commonly used terms in appraising that you will find helpful.
AdjustmentWhen comparable properties have been identified, the appraiser makes adjustments to the Sales Price of each of the comparables to bring them into equivalency with the subject property, accounting for differences in location, construction quality, living area, acreage, frontage, amenities and the like. This is where the professional expertise of an appraiser is most valuable.
ChattelPersonal property that may be on the subject property but which does not figure into the opinion of value in the appraisal report.
Comparable or "comp"Properties like the subject property nearby which have sold recently, used as a basis to determine the fair market value of the subject property.
Drive-byAn appraisal that is limited to an exterior-only examination of the Subject to make a determination that the property is actually there and has no obvious defects or damage visible from the outside. Fannie Mae's form for this type of appraisal is its 2055, so you may hear a drive-by referred to as a "2055."
Fair market valueThe appraiser's opinion of value as written in his or her appraisal report should reflect the fair market value of the property -- what a willing buyer would pay a willing seller in an arm's-length transaction.
GLA aka "Gross Living Area"The sum of all above grade floor space, including stairways and closet space. GLA is often determined using exterior wall measurements.
Latent defectsA defect on the property that is not readily apparent but which impact the fair market value. Structural damage or termite infestation might be examples.
MLS or "A Multiple Listing Service"MLS is a proprietary listing of all properties on the market in a given area and their listing prices, as well as a record of all recent closed sales and their sales prices. Created by and used primary by real estate agents, many appraisers pay for access to these databases to aid in comparable selection and adjustment research.
Obsolescence. The value of assets diminishes as their capabilities degrade or more desirable alternatives are developed. Functional obsolescence is the presence or absence of a feature which renders the property undesirable. Obsolescence can also occur because the surrounding area changes, making a feature of the property less desirable.
SubjectShort for the property being appraised -- the "subject property."
Useful lifeThe time during which a property can provide benefits to its owner.
URAR or "Uniform Residential Appraisal Report"It is the form most lenders require if they need a full appraisal (that is, with walk-through inspection).
USPAP short for "Uniform Standards of Professional Appraisal Practice"USPAP promotes standards and professionalism in appraisal practice, and is often enacted into law in a state. It is promulgated by the Appraisal Foundation, a non-governmental entity chartered by Congress to, among other things, maintain appraisal standards.
Walk-throughAn inspection that includes a visit to each part of the interior of the house used in estimating value.
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