“Appraiser talk” and appraisal reports can contain words or phrases that the average everyday homeowner may not be familiar with. So as a way to assist homeowners and appraisal report readers, some common terminology along with their definitions are listed below.

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.

ANSI: The American National Standards Institute (ANSI) is a private, non-profit organization that administers and coordinates the U.S. voluntary standards and conformity assessment system. Per Fannie Mae, “Appraisers are now required to use the Square Footage-Method for Calculating: ANSI^® Z765-2021 (American National Standards Institute^®) measuring standard for measuring, calculating, and reporting above and below grade square footage(s) to determine gross living area (GLA) and non-GLA areas of subject properties for appraisal requiring interior and exterior inspections”

“As-is” Appraisal: This is the most common appraisal report as it reflects the subject property in its current state on the effective date of the appraisal. If a subject property has required repairs or inspections, this would make the report “subject to” instead of “as-is”. In that case, the repairs or inspections would need to be completed then the appraiser would come back to the subject property to verify the work was completed.

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. 

Deferred Maintenance:  Deferred maintenance are repairs that should be fixed but are not yet repaired. This type of maintenance can vary from flooring repairs, broken or cracked windows, leaks, stained or soiled carpet, peeling paint or wallpaper, damaged walls, etc. Typically these repairs are considered as cosmetic.

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.”

Effective Date: The date to which an appraiser’s analyses, opinions, and conclusions apply; also referred to as date of value.

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.

Intended User: The client and any other party as identified, by name or type, as users of the appraisal or appraisal review report by the appraiser, based on communication with the client at the time of the assignment.

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.

Market Value:  Per Fannie Mae, “Market value is the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: buyer and seller are typically motivated; both parties are well informed or well advised, and each acting in what they consider to be in their own best interest; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable there to; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

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. The purpose of USPAP is to establish and maintain public trust in appraisal practice. Following USPAP means that appraisers develop and communicate their analysis, opinions, and conclusions to intended users of their services in a manner that is meaningful and not misleading. 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.