Here are some examples of common appraiser jargon and their meanings:
Adjustment. When 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.
Chattel. Personal property
that may be on the subject property, but does not figure into the considered opinion of value in the appraisal report.
Comparable or "comp”. Properties like the subject property nearby which have sold recently,
used as a source to determine the fair market value of the subject property.
An 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 noticeable 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 value. The
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. "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 defects. A 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. A Multiple Listing Service 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 assist in comparable
selection and adjustment research.
Obsolescence. The value of assets diminishes
as their capabilities degrade or more desirable options are developed. Functional obsolescence is the presence or absence
of a feature that renders the property undesirable. Obsolescence can also occur because the surrounding area changes,
making a feature of the property less desirable.
Subject. Short for the property
Useful life. The time during which a property can provide benefits to its owner.
URAR. Short for Uniform Residential Appraisal Report, Fannie Mae form 1004, it is the form most
lenders require if they need a full appraisal (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.
Walk-through. This is an inspection that
includes a visit to each part of the interior of the house. It is used in estimating value.