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Real Estate Appraisal Forms

Real Estate Appraisal Forms

For homeowners or clients who have limited knowledge of appraisals, here is a list of the different types of appraisal forms that us appraisers typically use. While some of these forms do not apply to every property, these are the typical real estate appraisal forms used by most appraisers in most situations.

Residential Property Forms

Appraisal forms can be divided into a few categories, but the main two are residential and commercial forms. Residential forms are used for residential properties.

Properties that are considered residential properties include: single family homes, condominiums, mobile homes, and 2-4 unit properties.

Interior and Exterior Inspection Forms

1004

The 1004 form is probably the most common and widely used appraisal form for residential appraisers. That is because it is the form for single family residential properties.

The 1004 is used when an appraiser is required to do an interior and exterior inspection. It is typically used when a lender is ordering an appraisal for a refinance or purchase transaction.

1073

The 1073 form is probably the second most commonly used real estate appraisal form for residential properties. That’s because it is utilized for condominiums. It is essentially the same form as the 1004 and serves the same purpose.

However, it is modified for condominiums. This means that it includes fields that relate specifically to the condo project the subject is in, and other attributes that single family homes don’t have.

Exterior Only Inspection Forms

The forms above are generally used if the property has been inspected in person.

These following two forms are for when the property is only inspected from the exterior; what they call an “Exterior Only” appraisal.

These are however both still considered appraisal forms for residential properties.

2055

The 2055 form is an exterior only form for single family homes and it is only used when it is requested by the client. The exterior only single family form is typically used when there are tenants living at the property and won’t cooperate with the owner.

1075

The 1075 is basically the same as the 1073 form for condominiums but like the 2055 above, is for exterior-only inspections.

Interior or Exterior Inspection

This is where it gets kind of confusing.

Although a property is actually not required to be inspected at all to perform an appraisal, these following two forms can be used for either an interior or exterior inspection.

Typically they are used for full inspection appraisals.

1004C

Like the 1004 and 1073 forms, the 1004C is also for residential properties, but of a different sort. The 1004C form is for mobile homes. You know, like the ones that belong in mobile home parks.

1025

The 1025 form is a little different than the previous three, but I included it the residential forms section because it is used what is still considered a residential property. That is a 2-4 unit property. Like I said, this form is a little different in that it is laid out with different sections, including rental comparables before the sales comparables and value indicators below the sales comparables.

Now that we have covered the residential appraisal forms, we will get into the commercial ones. Don’t worry; there aren’t nearly as many.

Commercial Property Forms

There are only a few commercial appraisal forms since the majority of commercial properties are appraised with written appraisal reports.

However, if the property is on the smaller side, or the client doesn’t want to pay for an appraisal report, then a form will typically be utilized.

71A & 71B

These two forms are both used for the same type of property, multi-family properties (5 or more units). Both of these forms have the same “skeleton” and come up with the same results, in the same way, the 71A is just a much more in-depth report.

Typically I prefer to use the 71B since it is a heck of a lot shorter and still has the same outcome.

GP Commercial

The third and only other commercial appraisal form is the GP Commercial form. GP forms will be explained better in the following section but what “GP” stands for is “General Purpose.”

With this name, you can get the idea that this form can basically be used for any type of commercial property that isn’t overly complex.

I have appraised everything from office buildings, religious facilities and single room occupancy buildings on the GP Commercial form.

It is very versatile and very easy to work with, to say the least.

General Purpose (GP) Forms

Now, to go a little more in-depth with the General Purpose (GP) forms… The GP forms are a great series of forms that include a special form for each type of property.

A lot of times these forms are used when the client just wants to know an estimate of the market value of a property. They are also the forms you would want to use for estate related appraisals.

GP Residential

The GP Residential is for single family properties, like the 1004 form.

GP Condominium

The GP Condo form is like the 1073 form, for condominiums.

GP Commercial

The GP Commercial form as explained above is for non-complex commercial properties. This form can be used for a wide variety of commercial properties.

GP Land

The GP Land form is the form that is typically used if the client is looking to find the value of a parcel of land. Usually it is used for residential land, but can also be used for commercial land as well.

GP 2-4 Unit

The GP 2-4 unit is used for income properties that have 2 to 4 units. It is similar to the 1025 form.

Other Forms

The major appraisal forms are pretty much summed up above, but there are some additional forms that serve other purposes.

1004D

The 1004D is utilized when a client wants the appraiser to either a) verify that the value has not changed since the effective date of the appraisal, or b) go back and reinspect the property to verify that something has been repaired or replaced.

217/1007

The 217/1007 forms are used as a supplement to any of residential forms talked about above. These two forms are typically used for rental properties and are used to display rental comparables and a simplified income statement.

Real Estate Appraisal Terms

Real Estate Appraisal Terms

Every job field has their set of terms that most of the time, no normal person has any idea what they mean. These kinds of terms just become part of your everyday vocabulary after working in a certain field for awhile and eventually you don’t even realize that no one has any idea what you are talking about when you use them. Here is a list of real estate appraisal terms.

I put together this list of terms that appraisers frequently use, so that people who are unfamiliar with them can have a better understanding of what we are talking about all of the time.

This list is a working list so I will add to the list every so often.

Enjoy.

Adjustment

The term “adjustment” is used when talking about comparable properties in the appraisal report.

Once the appraiser has identified the comparable properties that are most similar to the property that is being appraised, he will make “adjustments” to the sale or list price of each comparable. These adjustments are made in the form of dollar amounts and are used to bring the comparable properties into equivalency with the subject property.

“As Is”

“As Is” a term that is used when discussing the condition of property. All it refers to is the property in it’s current state. The majority of appraisals are written for the “As Is” quality and condition of the property.

“As Completed” or “Subject To”

These terms can be used interchangeably, but sometimes mean different things in different circumstances. Sometimes an appraisal can be written on a property that is not complete yet, or that is suffering from items that need to be repaired before further action can be taken.

Both of these terms refer to the property as if it has been completed or repaired.

Comparable or “Comp”

Comps! This is the one word of appraiser jargon that you will most likely hear the most and probably already hear a million times if you have ever dealt with an appraiser. Comparables, or “Comps” for short, are the comparable properties that the appraiser uses to compare to the subject property being appraised.

*Many times clients will request a “comp check” ahead of the appraisal to see if the property is worth the value they need to make the loan.

Cost Approach

There are three approaches to value that can be used to estimate the value of property.

Typically, the sales comparison approach is always used. But the Cost Approach is another approach to value that is used in most residential appraisals as well. The basis for the Cost Approach is basically how much the subject property would cost if it were to be reproduced at that point in time.

Drive-By

The term Drive-By (No, not a drive-by shooting) is a pretty simple one that needs little if no explaining. It refers to an exterior only inspection. It is called a “Drive-By” because all the appraiser has to do is drive by and take pictures of the property.

Effective Date

The effective date is an important date in an appraisal report because it is the date of when the value is effective. The effective date is typically the date that the appraiser went out and inspected the property, but when an appraisal is being done for an estate, a common effective date in this situation is the date of death.

Grid

The grid is an essential part of the sales comparison approach (Discussed further down this page). It is where all of the comparable properties are laid out, each with their property traits, such as lot size, square footage, bedroom/bathroom count, and more. The grid is where the adjustments are made to bring the comparable properties into equivalency with the subject property.

Income Approach

As mentioned before there are three approaches to valuing a property. The income approach is one of these three and is typically only used when a property is making income or will be in the future.

Inspection

Inspections are what the appraiser typically does before writing the appraisal report. Inspections can be done in the form of a full inspection or an exterior only inspection. A full inspection is when the appraiser comes out to measure the property and inspect the interior. An “exterior only” or “drive-by” inspection is where the appraiser just takes photos from the exterior and doesn’t measure the property.

GLA

GLA is a simple acronym that stands for Gross Living Area. GLA is all of the above grade floor space inside your home. The appraiser will typically determine the GLA of a property by measuring its exterior dimensions.

GBA

GBA is also a simple acronym that stands for Gross Building Area. Not to be confused with Gross Living Area, Gross Building Area is all of the space including below grade space, as long as it is finished. GBA is typically used when referring to 2-4 unit properties and commercial properties. Not so much with single family residential properties.

MLS

The Multiple Listing Service is basically like Google for residential real estate. Brokers use the MLS to list properties for sale, so all of the listings, sales, expirations, cancellations and more are shown on the MLS. This is where the majority of our information comes from when writing a residential appraisal report.

Obsolescence

Obsolescence occurs when a property is no longer desirable because there are more desirable alternatives available. There are two kinds of obsolescence in real estate appraisal practice. These can be divided into functional obsolescence and external obsolescence.

Functional obsolescence is obsolescence that pertains to the property itself. Functional obsolescence is divided into two categories, curable and incurable. Curable means that the cost of “curing” the obsolescence is less that the value it will add back to your home. Incurable means that the cost of “curing” the obsolescence is more than the value it will add back.

External Obsolescence is a little different because it is outside factor that is out of your control and affects the value of your property. This is typically something like a busy road or commercial building that is adjacent to the property.

PUD

Planned unit development, or PUD’s for short, are communities of homes that can include single family homes, condos, and even commercial properties. All the homes are built around the same time, and there are typically only a few different floor plans, so they all look similar. Planned Unit Developments are similar to condominium complexes in the fact that they have an HOA, but they are different in the way repairs and other maintenance issues are handled. PUDs are extremely common in urban and suburban areas, especially where I live in Southern California.

Sales Comparison Approach

The third and most commonly used approach to value is the Sales Comparison Approach. This is the approach that you think of if you have ever had any exposure to appraisals. The sales comparison approach is performed by finding comparable properties and making adjustments to these comparable properties to come to an opinion of value for the subject property. These comparable properties and their specific traits are laid out in a grid, where the adjustments are made.

Scope of Work

The scope of work essential consists of six key parts including the client and intended users, intended use of the report, the definition of the value, any hypothetical conditions or extraordinary assumptions, the effective date, and the salient features of the property. But all you need to know is that the scope of work is just explaining the need for the appraisal and why it was ordered in the first place.

SF

This is a unit of measurement that you will see it a lot when you are communicating with appraisers. It stands for square foot and is a measurement that appraisers use all the time, whether it is referring to lot size or the size of the home itself.

Subject

Subject Property, or subject for short, is the property that is being appraised. A lot of times appraisers will just refer to it as the subject since it is easier than saying subject property.

URAR

URAR stands for Uniform Residential Appraisal Report. This is an appraisal form used to appraise single family homes. This is arguably the most common and widely used appraisal form for real estate appraisers.

USPAP

This is another appraisal acronym that stands for Uniform Standards of Professional Appraisal Practice. You could call it the law of appraisal practice. Basically what USPAP is, is a lengthy book of quality control guidelines for real estate appraisal practice.

UAD

The acronym UAD stands for Universal Appraisal Dataset. Simply put, UAD is the acceptable terms and values allowed on an appraisal report. It is a set of standard rules and abbreviations for use in appraisal reports.

However, there are only a select few UAD forms that are in use. These include the 1004, 1073, 2055, and 1075 forms. These four forms are otherwise known as the forms used to appraise single family residential properties and condominiums.

Walk-Through

A Walk-Through is what an appraiser does when he comes to inspect the property. He “walks-through” the home to mark down the rooms on his sketch, take pictures of each room, take note of the finishes and other necessary details. A walk-through is part of the appraisal inspection (Talked about further up the page).

What to Expect From a Home Appraisal

What to Expect From a Home Appraisal

Before setting up an appraisal for direct clients, we are almost always asked how the appraisal process goes and what one should expect from a home appraisal.

The answer is almost always the same, which is why I decided to write this guide.

One thing to note ahead of time is that the majority of the work is done behind the scenes. All the client ever actually sees is the inspection (If you are the client), and the final report.

All the rest of these following steps go into the appraisal.

1. Order

The appraisal process always starts with an order. Whether the order comes from the bank that the homeowner is getting a loan through, an appraisal management company (AMC), or directly through us, the order is always the first step.

Typically, if the order comes from a bank or an AMC, they provide us with all the information we need to get in touch with you and to learn what property we will be appraising.

This information typically includes the property address, a phone number, and an email address.

Once we have all this information and we have confirmation to move ahead with the appraisal, the process goes on to step two which is scheduling the appraisal.

2. Scheduling

Talking on the PhoneThe next step in the process is scheduling. To write an appraisal report, the appraiser almost always will have to inspect the property first (See more about inspections in the following step).

On a good day, we can make a single call and have our inspection set up within minutes. On a bad day, it can take days or even a week or more to get in touch with the contact.

Many factors can skew the scheduling process, such as when the client needs the report by, when the contact is available, or even just simply being unable to reach the contact by phone or email.

More often than not, the biggest problem is being unable to connect with the contact, be it wrong numbers, old emails, or just simply not picking up the phone.

So if you are expecting an appraisal, make it easy on us and just pick up the phone and choose a time that works for both of us!

Once the appointment had been scheduled, it’s time for step three, the inspection.

3. Inspection

Taking PhotosThe physical inspection is required in most cases because the appraiser needs to get a good feel for the property so that he can produce an accurate appraisal report.

Although, an inspection is technically not required to perform an appraisal, 99% of the time is necessary.

The appraisal inspection will be done at the time of the appointment you scheduled ahead of time (Step 2). Our appraisers will always arrive on time, and most of the time, early. If for any reason we are going to be late, we will let the contact know ahead of time.

The inspection consists of two main elements: photos and measuring.

During the inspection, the appraisal will measure around the exterior of the property to get the correct dimensions for the sketch that will be used in the appraisal report.

The appraiser will also need to take photos of the entire property.

As far as the exterior photos go: Photos of the front and rear, the sides, backyard, pool/spa, and other important exterior elements will be taken.

As far as interior photos go: Photos of every major room will be taken. These photos include the kitchen, living room, family room, bathrooms, bedrooms, and other distinct rooms. No closet photos will be necessary.

In my opinion, it is important for homeowners to at least do a little bit of cleaning before the appraiser comes to inspect the property because it leaves the appraiser feeling like you maintain the property better than someone who looks like a slob with stuff all over the house.

While this sounds like a lot of work, the entire inspection will only take around 15 to 30 minutes depending on the size and complexity of the property.

4. Report Writing

Once the appraiser has inspected the property, it is time for them to write the appraisal report.

A common misconception is that the appraisal inspection is what takes the most amount of time when really it is the writing of the report that takes up the majority of the time.

Appraisal Report Writing PhotoWriting of the report consists of inputting all of the data about the property, inserting the photos taken during the inspection, producing a sketch with the dimensions and rooms of the property (Almost like a blueprint), researching comparable properties, making adjustments, etc.

There is a lot of work that goes into the writing of the report, which is why the bulk of our time is spent doing it.

5. Delivery

Once the report has been written and proofread, it is then submitted to the client. Depending on who the client is, minor corrections will typically need to be made. Once we make these changes, then the report is considered to be complete.