Real Estate Appraisal Glossary

A professional process for analyzing relevant information and developing an opinion of value or another assignment result for a stated purpose and date.

Also searched as: valuation, appraisal process

A specific appraisal or review engagement accepted by an appraiser. It identifies the property, problem, intended use, users, and conditions.

Also searched as: assignment

A person who develops and communicates an appraisal or appraisal review. Virginia appraisers must work within the scope of their state credential.

Also searched as: licensed appraiser

A written communication of the appraiser’s analysis, opinions, and conclusions for the assignment and its intended use.

Also searched as: report

An assignment that examines another appraiser’s work for quality, completeness, or support; it may or may not include a new value opinion.

Also searched as: review appraisal

An appraiser’s supported conclusion about value for a particular property interest, effective date, and value premise.

Also searched as: opinion of value

The real estate identified in the assignment and analyzed by the appraiser.

Also searched as: subject

A property used as evidence because its characteristics and market context make it relevant to the subject.

Also searched as: comparable, comp

Land and items permanently attached to it, including buildings and improvements, subject to applicable law.

Also searched as: real property

Land, attached improvements, and legally recognized ownership interests or rights associated with them.

Also searched as: real estate

Movable property not part of the real estate interest being appraised. Classification can depend on attachment and assignment context.

Also searched as: chattel

The amount paid or agreed in a particular transaction. It is evidence about that sale, but does not automatically establish market value.

Also searched as: sale price

The amount spent or estimated to create, acquire, or replace something. Cost and market value can differ.

Also searched as: replacement cost

A value set by a public assessor for property taxation under local rules. It may differ from an appraisal opinion.

Also searched as: tax value

A computer-based model that estimates value from available data. It is not the same as an appraiser’s property-specific analysis.

Also searched as: automated estimate

An agent’s analysis of listings and sales, often used for pricing discussions. It is different from a real property appraisal assignment.

Also searched as: CMA

A broker’s estimate of likely price or value for a requested purpose. It is distinct from an appraisal assignment.

Also searched as: BPO

The party who engages the appraiser. The client is not automatically the only intended user.

Also searched as: appraisal client

The purpose for which an appraisal or appraisal review is prepared, as identified in the assignment.

Also searched as: purpose

A person or entity identified by the appraiser as an intended recipient of the assignment results.

Also searched as: report user

The research and analysis needed for credible results, potentially including inspection, data verification, methods, and reporting.

Also searched as: work scope

The appraiser’s record of information, analyses, communications, and support for the assignment results.

Also searched as: appraisal file

The date to which the value opinion or other conclusion applies. It may be past, current, or future and differ from the report date.

Also searched as: valuation date

The date the appraisal report is completed or issued. It is not necessarily the date the value conclusion applies.

Also searched as: date of report

A viewing or examination of property to observe features relevant to the assignment. Its extent depends on scope and requirements.

Also searched as: property inspection

A condition affecting the appraisal problem or analysis, such as an assumption, hypothetical condition, law, or client requirement.

Also searched as: condition

A premise accepted as true for the analysis. It should be reasonable and relevant to the assignment.

Also searched as: appraisal assumption

A premise about uncertain information treated as true; if it proves false, the assignment results could change.

Also searched as: EA

A condition assumed for analysis that is contrary to what is known to exist on the effective date.

Also searched as: HC

A legal situation where a specific law conflicts with part of USPAP; the appraiser follows the law and explains its effect.

Also searched as: law and USPAP

The knowledge and experience needed to complete an assignment competently, including acquiring needed knowledge before proceeding.

Also searched as: competency rule

Objective development and communication of results, without advocacy for a party or outcome.

Also searched as: objectivity

The obligation to protect confidential assignment information, subject to law, client authorization, and professional requirements.

Also searched as: confidential information

Previous work by the appraiser involving the subject property. Disclosure requirements depend on current standards and the assignment.

Also searched as: previous appraisal

Conclusions and opinions supported by relevant evidence and reasoning to a degree appropriate for the intended use.

Also searched as: credible results

Uniform Standards of Professional Appraisal Practice, the U.S. professional standards for appraisal practice. Current editions and law govern.

Also searched as: Uniform Standards

The Appraisal Foundation board responsible for developing and amending USPAP.

Also searched as: ASB

The USPAP rule addressing ethical conduct, including impartiality, advocacy, confidentiality, and misleading acts.

Also searched as: professional ethics

A USPAP reporting option that communicates assignment results with information suited to the intended use and intended users. It is different from the name of a lender form.

Also searched as: USPAP appraisal report

A USPAP reporting option with restricted intended use and audience. Its limited content may not be appropriate for readers who are not identified intended users.

Also searched as: restricted report

The appraiser’s opinions and conclusions developed during an assignment. Results can include opinions other than a value conclusion.

Also searched as: appraisal results

A value opinion developed under a stated condition that specified repairs or corrections will be completed. The report should identify the work assumed and the effective date.

Also searched as: subject-to condition

A value opinion developed under a stated condition that proposed construction or improvements will be completed as described. Plans, specifications, and assignment assumptions matter.

Also searched as: proposed construction

A value premise defined by the assignment or applicable program. Its assumptions matter; it is not simply contract price or tax assessment.

Also searched as: value

A phrase used in tax, legal, and other contexts whose governing definition may depend on purpose or jurisdiction.

Also searched as: FMV

A value term used under particular accounting, legal, or statutory frameworks. The applicable framework controls its meaning.

Also searched as: accounting value

The value of a property to a particular investor, reflecting that party’s objectives and expectations rather than a typical market participant’s.

Also searched as: worth to investor

Value associated with a property’s use to a particular owner or operation under the relevant valuation framework.

Also searched as: use value

A value premise involving a constrained disposition. Assumptions and definition must be identified for the assignment.

Also searched as: forced sale

A value measure for insurance purposes under a policy and valuation instructions. It may exclude land or uninsured items.

Also searched as: insurance value

A value conclusion based on the property’s condition and completion as of the effective date, subject to assignment conditions.

Also searched as: current condition

An opinion of value as of a past date, using relevant historical market and property information.

Also searched as: historical value

An opinion of value as of a future date, based on stated assumptions about future conditions.

Also searched as: future value

The reasonably probable use that is legally permissible, physically possible, financially feasible, and most productive, analyzed as vacant and improved when relevant.

Also searched as: HBU

A use allowed by zoning, law, restrictions, permits, and other land-use controls, subject to verification.

Also searched as: legal use

A use that the site and improvements can physically support, considering size, shape, access, utilities, and topography.

Also searched as: physical use

A use expected to produce economic benefits sufficient to support its costs and risks under relevant market conditions.

Also searched as: feasibility

Among financially feasible uses, the one producing the highest value indication for the property interest appraised.

Also searched as: most productive use

The estimated period the property interest would have been offered before a hypothetical sale at the concluded value on the effective date.

Also searched as: market exposure

An estimate of how long a property may take to sell at the appraised value after the effective date, under stated conditions.

Also searched as: sale time

An opinion of rent supported by relevant rental evidence for a specified property, date, and lease assumptions.

Also searched as: rental value

Rent stated in an existing lease. It may be above, below, or similar to market rent.

Also searched as: lease rent

A value opinion reflecting a property after proposed construction or improvements are completed as described, under the assignment’s stated assumptions and effective date.

Also searched as: completed value

An approach analyzing sales and other market evidence from competitive properties, accounting for relevant differences.

Also searched as: market approach

An approach considering land value and the cost to create improvements, less applicable depreciation.

Also searched as: replacement cost approach

An approach converting expected income benefits into a value indication using methods suited to the property and market.

Also searched as: income approach

An income method converting stabilized net operating income into a value indication using a supported capitalization rate.

Also searched as: cap rate method

An income method forecasting cash flows over time and discounting them to present value at a selected rate.

Also searched as: cash flow analysis

The estimated cost to build a substitute improvement with similar utility using current materials, design, and standards.

Also searched as: cost to replace

The estimated cost to build an exact or near-exact duplicate of an existing improvement with similar materials and design.

Also searched as: replica cost

The current cost to construct an improvement before deducting depreciation under the selected cost premise.

Also searched as: new construction cost

A loss in improvement value from physical deterioration, functional obsolescence, or external obsolescence; not automatically tax depreciation.

Also searched as: accrued depreciation

Wear, damage, or deferred maintenance that reduces an improvement’s utility or value.

Also searched as: physical depreciation

Loss in usefulness or appeal due to a design, layout, or feature that is inadequate or less desirable in the market.

Also searched as: functional depreciation

Loss in value caused by influences outside the property, such as adverse surroundings or broader market conditions.

Also searched as: economic obsolescence

Depreciation for which correction is economically supported by expected gains in value or utility.

Also searched as: curable item

Depreciation that is not economically practical to correct, even if physical correction is possible.

Also searched as: incurable item

Property income after operating expenses and vacancy allowance, before debt service and income taxes.

Also searched as: net income

Income a property could produce at full occupancy and market rents before vacancy losses and expenses.

Also searched as: PGI

Potential income adjusted for vacancy, collection loss, and other income items under the analysis.

Also searched as: EGI

An allowance for income lost from vacant units, nonpayment, or similar interruptions.

Also searched as: vacancy loss

A rate used to convert stabilized income into value, supported by evidence and consistent with the income definition.

Also searched as: cap rate

A ratio of sale price to gross rent for a stated period, used as a simplified comparison measure when market-supported.

Also searched as: rent multiplier

A market-supported amount applied to comparable evidence for a relevant difference from the subject. It reflects market reaction, not necessarily repair cost.

Also searched as: comparable adjustment

The amount a feature adds to the whole property’s value in its market context, which may differ from the feature’s cost.

Also searched as: added value

A comparison of sales differing in a key feature to help isolate how the market responds to that feature.

Also searched as: matched pair

Reasoned analysis of the relative strength and applicability of value indications leading to the final opinion or conclusion.

Also searched as: final analysis

Emphasis assigned to evidence based on relevance, reliability, and comparability. It does not necessarily mean a mathematical average.

Also searched as: relative weight

An estimate of the expense to correct a specified physical issue. It is not automatically equal to a value adjustment; market reaction and assignment scope matter.

Also searched as: repair cost, cure cost

A closed transaction selected as relevant evidence. Similarity, verification, timing, and market context matter more than distance alone.

Also searched as: closed comp

An active or pending listing showing current competition. Its asking price is not a completed transaction price.

Also searched as: listing comp

A property under contract but not yet closed. It may give current context, with caution about unverified terms and final price.

Also searched as: under contract

A property currently offered for sale. It shows competition and seller expectations, not a completed sale.

Also searched as: for sale

The date buyer and seller reach a binding agreement, subject to its terms. It can matter in market-condition analysis.

Also searched as: agreement date

The date a transaction closes or is recorded, depending on data source and assignment convention.

Also searched as: closing date

An adjustment for a supported market change between a comparable’s relevant transaction point and the subject’s effective date.

Also searched as: market conditions adjustment

A credit, payment, or benefit from a transaction party that may affect a buyer’s effective price or financing costs.

Also searched as: sales concession

A sale where relationships, compulsion, unusual motivation, or other circumstances may affect price or terms.

Also searched as: related-party sale

The broader geographic and economic area from which a property draws competition and relevant market evidence.

Also searched as: competitive area

A smaller grouping of properties with shared characteristics; boundaries should reflect the assignment and market evidence.

Also searched as: submarket

Dividing a market into groups of properties that compete because of similar location, utility, price range, or demand.

Also searched as: buyer segment

The pace at which properties are sold or leased in a market over a specified period, using a stated supply and demand measure.

Also searched as: sales pace

An estimate of how long current inventory would take to sell at a recent sales pace, assuming conditions do not change.

Also searched as: inventory supply

A measure of marketing duration based on local MLS definitions and relisting rules.

Also searched as: marketing days

The midpoint of sale prices in a defined sample. It describes the group, not an individual home’s value.

Also searched as: price statistic

A comparison of closed prices with listing prices, interpreted with timing, concessions, and market segment in mind.

Also searched as: list-to-sale ratio

Selecting comparable evidence above and below a subject feature or value indication. Bracketing alone does not prove an adjustment.

Also searched as: range comparison

A transaction between parties acting independently, without a relationship or pressure that materially affects the price or terms.

Also searched as: typical sale

The difference between a purchase contract price and an appraisal value conclusion. It may affect negotiations or financing, depending on the transaction.

Also searched as: price-to-value gap

A national standard for calculating and reporting square footage in detached and attached single-family homes when applicable.

Also searched as: ANSI measurement

Finished dwelling area above ground level reported using UAD 3.6 terminology. Legacy reports may use gross living area; follow the applicable format.

Also searched as: above-grade finished area, GLA

A familiar term for above-grade finished dwelling area in legacy reporting. UAD 3.6 uses updated area terminology, so the report format matters.

Also searched as: finished area above grade

Finished dwelling space classified below grade under applicable measurement and reporting rules. It is reported separately from area above grade.

Also searched as: basement finished area

A level or portion of a dwelling classified below ground under the applicable standard. A walkout basement may still be below grade.

Also searched as: basement level

Finished space that does not meet one or more standard criteria, such as ceiling height, but may contribute utility or value.

Also searched as: NSFA

Finished area attached to the main dwelling without direct interior access, reported separately under relevant UAD 3.6 guidance.

Also searched as: noncontinuous area

Space that does not meet applicable finished-area criteria. It may still provide utility or contributory value.

Also searched as: unfinished space

For applicable two- to four-unit reporting, finished area across units and levels under the lender’s measurement rules.

Also searched as: GBFA

A building level partly or fully below ground. Finish, access, light, ceiling height, and utility are analyzed separately from area above grade.

Also searched as: below-grade area

A basement with exterior access, often due to sloping terrain. The walkout feature does not itself make the level above grade.

Also searched as: daylight basement

The vertical distance from finished floor to ceiling. Requirements and sloped-ceiling treatment depend on the applicable standard.

Also searched as: sloped ceiling

A drawing showing room layout and relationships. It is not automatically a measurement-compliant appraisal sketch.

Also searched as: layout

A drawing of the building’s exterior shape and dimensions used to support area calculations and describe its footprint.

Also searched as: building sketch

A secondary living area on the same parcel as a primary home, attached, within, or detached. Legal status, facilities, access, and market acceptance matter.

Also searched as: in-law suite

A separate building on the site, such as a shed or detached garage, analyzed separately when appropriate.

Also searched as: accessory structure

An estimate of an improvement’s age based on observed condition and utility; it can differ from calendar age.

Also searched as: condition age

The estimated period an improvement is expected to contribute value, considering physical and market factors.

Also searched as: economic life

Repairs or upkeep that have been postponed. Treatment depends on observed condition, assignment scope, and market reaction.

Also searched as: needed repairs

Materials, design, and workmanship level under the applicable reporting system.

Also searched as: quality rating

A classification of physical condition under a particular reporting system. Labels and definitions depend on the form or dataset.

Also searched as: property condition

The set of legal rights associated with ownership, such as use, control, exclusion, and transfer, subject to law and agreements.

Also searched as: ownership rights

A broad ownership interest with rights of possession and use, subject to governmental powers and private restrictions.

Also searched as: fee simple

A landlord’s ownership interest subject to a lease, including the right to receive rent under its terms.

Also searched as: landlord interest

A tenant’s right to use property under a lease, subject to its terms and duration.

Also searched as: tenant interest

An ownership interest lasting for the life of a specified person, after which rights pass to another party.

Also searched as: life tenancy

A legal right for another party to use part of a property for a defined purpose, such as access or utilities.

Also searched as: right of way

A physical improvement crossing a property boundary or extending into another property or easement area.

Also searched as: boundary encroachment

A recorded limitation affecting how property may be used or developed.

Also searched as: restrictive covenant

Local regulation of land use, density, building placement, and development standards.

Also searched as: land use regulation

A use or structure lawful when established but inconsistent with current zoning. Local law governs continuation or change.

Also searched as: grandfathered use

A formal description identifying a parcel’s boundaries or location for legal and recording purposes.

Also searched as: parcel description

A defined unit of land recognized in public or legal records. Tax parcel lines may not equal surveyed boundaries.

Also searched as: lot, tract

Land that may be separated and sold or developed independently while retaining utility for the existing property, subject to feasibility.

Also searched as: surplus land

Land that adds utility to the existing property but is not independently usable enough to be excess land.

Also searched as: extra land

An item attached or adapted to real estate in a way that may make it part of the real property. The legal test and contract matter.

Also searched as: attached item

Legal ownership and the rights or claims associated with property. An appraisal is not a title examination.

Also searched as: ownership

A legal claim or security interest against property that may affect transfer or financing.

Also searched as: encumbrance

A mapped flood-risk classification used by agencies and insurers. It is not itself a conclusion about value or insurability.

Also searched as: FEMA flood zone

A location or surrounding factor that may affect utility or buyer response, such as traffic, view, waterfront setting, or nearby uses.

Also searched as: location factor

Property with direct physical frontage on water. Access, shoreline rights, condition, and market segment affect contribution.

Also searched as: waterfront property

A view of water without necessarily having direct frontage or access.

Also searched as: view amenity

Standardized data definitions and reporting requirements for certain mortgage appraisals delivered to Fannie Mae and Freddie Mac.

Also searched as: UAD

An earlier reporting specification used with legacy mortgage forms. Its labels and abbreviations differ from UAD 3.6.

Also searched as: legacy UAD

An updated data specification and redesigned residential reporting framework with revised fields and terminology. Adoption timing depends on lender requirements.

Also searched as: new UAD

A residential report format used in mortgage lending. Its data structure is being redesigned through the UAD transition.

Also searched as: 1004

A former industry label for eligible loans that may not require a traditional appraisal. Fannie Mae now uses value acceptance.

Also searched as: waiver

Fannie Mae’s current term for an eligible loan case where a lender may not need a traditional appraisal, subject to program criteria.

Also searched as: appraisal waiver

A business coordinating appraisal assignments for lenders or clients, subject to applicable state requirements.

Also searched as: appraisal management

An appraisal ordered through or for a lender to support a lending decision. The lender controls ordering and acceptance requirements.

Also searched as: mortgage appraisal

An appraisal commissioned by a private client for a stated use, such as listing guidance, estate administration, divorce, or a personal decision.

Also searched as: non-lender appraisal

An appraisal assignment completed without the appraiser physically inspecting the property, when allowed by scope and requirements.

Also searched as: remote appraisal

An appraisal with a limited observation from outside the property, when permitted by the assignment and applicable requirements.

Also searched as: drive-by appraisal

An appraisal where anot her party collects some property data while the appraiser analyzes the assignment and develops conclusions.

Also searched as: third-party inspection

A service documenting whether specified construction or repairs appear complete. It does not automatically include a new value opinion.

Also searched as: final inspection

A new assignment or service updating prior work under stated conditions, not merely changing a date on an old report.

Also searched as: update appraisal

A request for an appraiser or lender to review a value conclusion or relevant data. Process rules depend on the client and program.

Also searched as: value reconsideration

Mortgage insurance on some conventional loans, subject to loan and servicer cancellation rules. An appraisal alone does not guarantee cancellation.

Also searched as: PMI

The loan amount compared with a property value or purchase price under lender calculation rules.

Also searched as: LTV

A private appraisal obtained before marketing a home to inform pricing discussions. It does not guarantee the eventual sale price.

Also searched as: listing appraisal

An appraisal for an estate-related use, such as administration, planning, or tax work. Confirm the required value definition and date.

Also searched as: estate valuation

A retrospective appraisal with an effective date tied to a person’s date of death when required for an estate or related purpose.

Also searched as: DOD appraisal

An appraisal developing value as of a past date using relevant historical market and property information.

Also searched as: historical appraisal

A private appraisal for divorce-related use, such as discussion of a buyout or property division. Identify users and required date.

Also searched as: marital property appraisal

An appraisal for a bankruptcy-related use and date identified by the client or counsel. Confirm court requirements with an attorney.

Also searched as: bankruptcy valuation

An appraisal requested in connection with a borrower’s PMI cancellation inquiry. The servicer determines acceptable process and requirements.

Also searched as: mortgage insurance removal

An appraisal for a purchase-related decision, with client and intended use identified.

Also searched as: purchase valuation

An appraisal associated with a proposed refinance. For lender work, the lender generally controls the order and report type.

Also searched as: refinancing appraisal

An appraisal prepared to support a property tax appeal under local rules, deadlines, and required valuation date.

Also searched as: assessment appeal

Analysis or advice about valuation issues that may not itself produce an appraisal opinion. The engagement should identify the service provided.

Also searched as: valuation consultation