Have you heard an appraiser use any of these terms? Did
you just hear one of our appraisers use it and you came
here to figure out what it meant? 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
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
GLA. "Gross Living Area," the sum of all above
grade floor space, including stairways and closet space.
GLA is often determined using exterior wall
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
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 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.
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
Walk-through. An inspection that includes a visit
to each part of the interior of the house used in