Appraisal Terminology

Appraisal:   A reasoned opinion of a defined type of value as of a given point in time, supported by facts gathered in the appropriate marketplace.

Appraisal Review:  The act or process of developing and communicating an opinion about the quality of another appraiser's work. The review could be the complete report or part of the report, the work file or a combination.

Appraiser:  One who is expected to perform valuation services competently and in a manner that is independent, impartial, objective and unbiased. This person must be competent in appraisal principles, methodology and techniques of developing the opinions or
conclusions.

Appraiser's Peers:  Other appraisers who have expertise and competency in the same or similar type of assignment.

Appreciable Property: Property that increases in value over time.

Assignment Results:  An appraiser's opinions and conclusions developed specific to an assignment.

Assumption:  That which is taken to be true.

Central Value Tendencies:  Methods that allow the most representative value to be selected from a large group of
comparable sales. (Mean, Median, Mode)

Client:  The party or parties who engage an appraiser (by employment or contract) in a specific assignment.

Comparable Property:  A property of the same kind as the subject property and has value characteristics identical or sufficiently similar to that property.

Cost:  The amount of money paid

Credible:  Worthy of belief.

Current Appraisal:  When the effective date is around the same time as the date of the report.

Date of Report:  The date on which the appraisal document was prepared and signed.

Date of Inspection: The date or dates that the property was examined by the appraiser.

Depreciable Property:  Property that decreases in value over time.

Effective Date:  The date as of which the values apply.

Expert Witness:  A person duly and regularly engaged in the practice of a profession who has had professional training
and experience, possesses special knowledge or skill about the subject they are called to testify about.

Extraordinary Assumption:  An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions or conclusions.

Fair Market Value:  A specific type of market value that is defined by a legal or regulatory jurisdiction and varies with individual jurisdictions.  Note: Fair market value is a hypothetical value that assumes reasonable knowledge by both parties, no compulsion to act and neither the buyer or seller are under duress. The property will not actually sell. The owner retains title. Fair market value sales must take place in the most common market in which the sales for that item takes place. Fair market value assumes an open retail market.

Highest & Best Use:  The reasonable and legal use of a property that will result in the properties greatest value.

Hypothetical Appraisal:  An appraisal in which the value conclusion is based strictly on a condition, which is contrary to what exists but is supposed for the purpose of the analysis.

Intended Use:  What the appraisal is being used for.

Intended Users:  The client and any other party identified, by name or type as users of the appraisal.

Limiting Conditions:  Conditions or circumstances that could affect the appraisal development, process and possibly
the appraiser's analyses, opinions or conclusions.

Mean:  The average value of the observations observed. (Add all the observation numbers and divide by the number of observations)

Median:  The middle value where an odd number of values are arranged according to size.

Mode:  The value that occurs most frequently in a group of comparable sales.

Most Common Market:  The marketplace in which the subject property is most commonly bought and sold.

Price:  The amount of money being asked for an item.

Principle of Regression:  A valuable item of property will suffer a loss of value when placed in a sale along with less valuable properties.

Prospective Appraisal:  When the effective date of the appraisal occurs after the date of the report.

Provenance:  The origin and history of the property.

Public:  The ultimate consumer.

Retrospective Appraisal:  When the value opinions are effective prior to the date of the report. Note: A retrospective appraisal goes back in time to the effective date and applies only the data of that earlier date and not after. Many estates are retrospective appraisals. The effective date is as of the date of death.

Sales Comparison Approach:  A value approach that bases the value of a subject property on recent sales of identical or similar properties or on current asking prices of identical or comparable items.

Substantial Evidence: Such evidence as a reasonable person might accept as adequate to support a conclusion.

USPAP:  The acronym for the Uniform Standards of Professional Appraisal Practice.

Value:  The monetary worth of an item as of a particular point in time within a given market.

Work File:  The documentation necessary to support an appraiser's analyses, opinions and conclusions.

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