|
 Appraiser
jargon
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
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
seller would pay a willing buyer 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 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 appraisal standards.
Walk-through.
An inspection that includes a visit to each part of the interior of the
house used in estimating value.
Nevada Appraisals require an experienced Nevada
licensed, certified residential or certified general or MAI (not MIA)
commercial or residential appraiser.
|
