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Definition
noun) the act or process of developing an opinion of value; an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services.
Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value). |
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Term
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Definition
valuation services performed by an individual acting as an appraiser, including but not limited to appraisal and appraisal review.
Comment: Appraisal practice is provided only by appraisers, while valuation services are provided by a variety of professionals and others. The terms appraisal and appraisal review are intentionally generic and are not mutually exclusive. For example, an opinion of value may be required as part of an appraisal review assignment. The use of other nomenclature for an appraisal or appraisal review assignment (e.g., analysis, counseling, evaluation, study, submission, or valuation) does not exempt an appraiser from adherence to the Uniform Standards of Professional Appraisal Practice. |
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Term
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Definition
the act or process of developing and communicating an opinion about the quality of another appraiser’s work that was performed as part of an appraisal or appraisal review assignment.
Comment: The subject of an appraisal review assignment may be all or part of a report, workfile, or a combination of these. |
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Definition
one who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective.
Comment: Such expectation occurs when individuals, either by choice or by requirement placed upon them or upon the service they provide by law, regulation, or agreement with the client or intended users, represent that they comply. |
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| other appraisers who have expertise and competency in a similar type of assignment. |
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| 1)An agreement between an appraiser and a client to provide a valuation service; 2) the valuation service that is provided as a consequence of such an agreement. |
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Definition
An appraiser’s opinions or conclusions developed specific to an assignment.
Comment See PREAMBLE and Advisory Opinion 21, USPAP Compliance.
Assignment results include an appraiser’s:
• opinions or conclusions developed in an appraisal assignment, not limited to value;
• opinions or conclusions, developed in an appraisal review assignment, not limited to an opinion about the quality of another appraiser’s work; or
• opinions or conclusions developed when performing a valuation service other than an appraisal or appraisal review assignment. |
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| that which is taken to be true |
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| a preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an assignment. |
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| an entity pursuing an economic activity. |
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| the interests, benefits, and rights inherent in the ownership of a business enterprise or a part thereof in any form (including, but not necessarily limited to, capital stock, partnership interests, cooperatives, sole proprietorships, options, and warrants). |
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Definition
the party or parties who engage, by employment or contract, an appraiser in a specific assignment.
Comment: The client may be an individual, group, or entity, and may engage and communicate with the appraiser directly or through an agent. |
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Definition
information that is either:
• identified by the client as confidential when providing it to an appraiser and that is not available from any other source; or
• classified as confidential or private by applicable law or regulation*.
*NOTICE: For example, pursuant to the passage of the Gramm-Leach-Bliley Act in November 1999, some public agencies have adopted privacy regulations that affect appraisers. As a result, the Federal Trade Commission issued a rule focused on the protection of “non-public personal information” provided by consumers to those involved in financial activities “found to be closely related to banking or usual in connection with the transaction of banking.” These activities have been deemed to include “appraising real or personal property.” (Quotations are from the Federal Trade Commission, Privacy of Consumer Financial Information; |
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Definition
the amount required to create, produce, or obtain a property
Comment: Cost is either a fact or an estimate of fact. |
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worthy of belief
Comment: Credible assignment results require support, by relevant evidence and logic, to the degree necessary for the intended use. |
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Definition
estimated length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal.
Comment: Exposure time is a retrospective opinion based on an analysis of past events assuming a competitive and open market. |
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Term
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Definition
an assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinions or conclusions.
Comment: Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. |
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Definition
| a study of the cost-benefit relationship of an economic endeavor. |
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Definition
a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.
Comment: Hypothetical conditions are contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. |
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| INTANGIBLE PROPERTY (INTANGIBLE ASSETS): |
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Definition
| nonphysical assets, including but not limited to franchises, trademarks, patents, copyrights, goodwill, equities, securities, and contracts as distinguished from physical assets such as facilities and equipment. |
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| the use or uses of an appraiser’s reported appraisal or appraisal review assignment opinions and conclusions, as identified by the appraiser based on communication with the client at the time of the assignment. |
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| : the client and any other party as identified, by name or type, as users of the appraisal or appraisal review report by the appraiser on the basis of communication with the client at the time of the assignment. |
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| an assignment condition established by applicable law or regulation, which precludes an appraiser from complying with a part of USPAP. |
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Definition
a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal.
Comment: Forming an opinion of market value is the purpose of many real property appraisal assignments, particularly when the client’s intended use includes more than one intended user.
The conditions included in market value definitions establish market perspectives for development of the opinion. These conditions may vary from definition to definition but generally fall into three categories:
1. the relationship, knowledge, and motivation of the parties (i.e., seller and buyer);
2. the terms of sale (e.g., cash, cash equivalent, or other terms); and
3. the conditions of sale (e.g., exposure in a competitive market for a reasonable time prior to sale).
Appraisers are cautioned to identify the exact definition of market value, and its authority, applicable in each appraisal completed for the purpose of market value. |
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| : the process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing. |
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| a mathematical expression of how supply and demand factors interact in a market. |
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| identifiable tangible objects that are considered by the general public as being “personal” - for example, furnishings, artwork, antiques, gems and jewelry, collectibles, machinery and equipment; all tangible property that is not classified as real estate. |
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Definition
the amount asked, offered, or paid for a property.
Comment: Once stated, price is a fact, whether it is publicly disclosed or retained in private. Because of the financial capabilities, motivations, or special interests of a given buyer or seller, the price paid for a property may or may not have any relation to the value that might be ascribed to that property by others. |
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Definition
| an identified parcel or tract of land, including improvements, if any. |
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Definition
the interests, benefits, and rights inherent in the ownership of real estate.
Comment: In some jurisdictions, the terms real estate and real property have the same legal meaning. The separate definitions recognize the traditional distinction between the two concepts in appraisal theory. |
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Definition
any communication, written or oral, of an appraisal or appraisal review that is transmitted to the client upon completion of an assignment.
Comment: Most reports are written and most clients mandate written reports. Oral report requirements (see the RECORD KEEPING RULE) are included to cover court testimony and other oral communications of an appraisal or appraisal review. |
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Definition
| the type and extent of research and analyses in an appraisal or appraisal review assignment. |
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| personalized evidence indicating authentication of the work performed by the appraiser and the acceptance of the responsibility for content, analyses, and the conclusions in the report. |
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services pertaining to aspects of property value.
Comment: Valuation services pertain to all aspects of property value and include services performed both by appraisers and by others. |
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Definition
the monetary relationship between properties and those who buy, sell, or use those properties.
Comment: Value expresses an economic concept. As such, it is never a fact but always an opinion of the worth of a property at a given time in accordance with a specific definition of value. In appraisal practice, value must always be qualified - for example, market value, liquidation value, or investment value. |
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Definition
| documentation necessary to support an appraiser’s analyses, opinions, and conclusions. |
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