Property Appraisers Reviews
Without being a real estate professional, you may hear some terms during the appraisal process that you may not understand. You’ve come to Cosden-Mishler to get a general understanding of some terminology.
We don’t mean to speak a foreign language, but any profession has its jargon. What res ipsa loquitur is to a lawyer and triple witching is to day traders, external obsolescence is to appraisers. Here are some examples of common appraiser jargon and their meanings:
Adjustment
When comparable properties have been identified, the appraiser adjusts the value of the subject property according to differences in 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 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. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for comparable selection.
Drive-by
An appraisal that is limited to examination of comparable sales and 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 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 aid in comparable selection and adjustment research.
Obsolescence
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.
Subject
Short for the property being appraised — the “subject 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 (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-through
An inspection that includes a visit to each part of the interior of the house used in estimating value.
