Appraiser's Glossary...

What did you say?!  It may sound like 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 obsolesce is to appraisers.  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.

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-by: 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 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 most probable price a property should bring in a competitive and open market.

GLA: "Gross Living Area," the sum of all above grade floor space. GLA is often determined using exterior wall measurements.

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 value of assets diminishes as their capabilities degrade or more desirable alternatives are developed. Functional obsolescence is the presence of a feature or condition which 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 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/Interior Inspection: An inspection that includes a visit to each part of the interior of the house used in estimating value.

If you have a question about any of these terms or need an explanation of an item on your appraisal, feel free to contact Steve Souza Appraisals.