A
Appraisal
An opinion of value developed and reported by a qualified appraiser in conformity with recognised standards. Distinct from an estimate, a market analysis, or an automated valuation.
Appraisal Review
A distinct assignment in which an appraiser develops an opinion about the quality of another appraiser's work. It is not a second appraisal — it evaluates whether the first one is credible and standards-compliant.
AQB
The Appraiser Qualifications Board of The Appraisal Foundation. It establishes minimum education, experience, and examination requirements for appraiser certification, and certifies USPAP instructors.
Assignment Conditions
The circumstances that shape a specific assignment: intended use, intended users, effective date, relevant characteristics of the property, and any assumptions or limiting conditions.
C
Chattel
Personal property, as distinct from real property. A manufactured home not permanently affixed and still titled through the motor vehicle division is chattel, and is appraised as personal property.
Comparable Sale
A transaction of a similar property used as evidence of value. Its usefulness depends on genuine similarity and on the appraiser's ability to support any adjustments made to it.
Cost Approach
A valuation approach estimating replacement or reproduction cost, less depreciation, plus land value. Frequently the most reliable approach for new construction and for special-purpose property with few comparables.
D
Date of Death Value
A retrospective value with an effective date equal to the decedent's date of death, used in estate settlement and estate tax reporting.
Diminished Value
The loss in market value that persists after a damaged asset has been repaired, because the market discounts a property or item with damage history.
E
Effective Date
The date to which the opinion of value applies. It is frequently not the date the report was written — retrospective assignments look backwards, and prospective assignments look forwards.
Extraordinary Assumption
An assumption, directly related to a specific assignment, which if found false could alter the conclusion. It must be disclosed prominently in the report.
F
Fair Market Value
The price at which property would change hands between a willing buyer and a willing seller, neither under compulsion and both reasonably informed. The standard for estate, gift, and most donation and divorce work.
Forced Liquidation Value
The estimated gross amount realised from a properly advertised public auction with the seller compelled to sell on a compressed timeline. Typically the lowest of the common value premises.
Functional Obsolescence
A loss in value caused by a deficiency or superadequacy in the property itself — an outdated floor plan, a bedroom with no closet, or an improvement the market will not pay for.
G
Going Concern Value
The value of an established, operating business including its tangible and intangible assets. Materially higher than the sum of the equipment sold piecemeal after closure.
H
Highest and Best Use
The reasonably probable use of property that is physically possible, legally permissible, financially feasible, and maximally productive. It must be determined before value is concluded.
Hypothetical Condition
A condition contrary to what is known to exist, but assumed for the purpose of analysis — for example, valuing a property as though a proposed renovation were already complete.
I
Income Approach
A valuation approach converting anticipated income into a value indication. Central to income-producing property and to most business valuation.
Intended Use
The use of the appraiser's opinion as identified by the appraiser at the time of the assignment. It drives the scope of work and the value premise, and is the first question NextPhase asks.
Intended User
The client and any other party the appraiser identifies as a user of the report. Parties not identified as intended users are not entitled to rely on it.
L
Liquidation Value
Value under a forced or time-constrained sale. Distinguished as orderly (reasonable exposure period) or forced (compressed, typically auction).
M
Market Value
The most probable price a property should bring in a competitive and open market under conditions requisite to a fair sale. Defined slightly differently across federal lending regulations.
Marketability Discount
A reduction applied to reflect the difficulty of selling an interest quickly and at full value — common in closely held business interests, and heavily scrutinised by the IRS.
Minority Interest Discount
A reduction reflecting a lack of control over an entity's decisions. Applied to non-controlling ownership interests, and must be supported by the governing documents and market evidence.
O
Orderly Liquidation Value
The estimated gross amount realised from a sale with a reasonable period to find purchasers. Sits between fair market value and forced liquidation value.
P
Personal Property
Identifiable tangible objects that are not real property — furniture, firearms, art, jewelry, equipment, and machinery. Not a state-licensed appraisal discipline in the United States.
Provenance
Documented history of ownership and origin. In art, antiques, and collectibles it can be the single largest driver of value, and its absence is itself material.
Q
Qualified Appraisal
An appraisal meeting the specific content and timing requirements of IRS regulation for noncash charitable contributions. Missing any required element can void the deduction entirely.
Qualified Appraiser
An individual meeting IRS-defined education, experience, and practice requirements for the type of property being valued, who signs the declaration on Form 8283.
R
Real Property
The interests, benefits, and rights inherent in the ownership of real estate. Appraisal of real property is a state-licensed activity in every US state.
Reconciliation
The process of analysing multiple value indications and arriving at a single conclusion, with the reasoning explained rather than averaged.
Replacement Cost
The cost to replace an item with one of like kind, quality, and utility, typically at current retail. The usual premise for insurance scheduling, and normally the highest common premise.
Reproduction Cost
The cost to create an exact duplicate using the same materials and methods. Distinct from replacement cost, and relevant to historic property.
Restricted Appraisal Report
A report format with limited content, usable only by the client and only where the client does not need the full narrative. Cheaper, but frequently rejected by third parties.
Retrospective Appraisal
An appraisal with an effective date in the past, developed using evidence available as of that date, without the benefit of hindsight.
S
Sales Comparison Approach
A valuation approach analysing sales of similar properties and adjusting for differences. The dominant approach in residential and much personal property work.
Scope of Work
The type and extent of research and analysis performed. It must be sufficient to produce credible results and must be disclosed in the report.
Subject Property
The property being appraised, as distinct from comparables used as evidence.
Substantial Improvement
In floodplain regulation, improvement of a structure where the cost equals or exceeds fifty percent of the structure's market value before the improvement — the FEMA 50 percent rule.
U
USPAP
The Uniform Standards of Professional Appraisal Practice. The ethical and performance standard for appraisers in the United States, developed by the Appraisal Standards Board.
V
Value in Use
The value of property to a specific user for a specific purpose, which may differ from market value. Relevant to installed industrial equipment in continued operation.
W
Workfile
The documentation an appraiser must retain supporting the analysis and conclusions. It is discoverable in litigation, and its adequacy is itself a compliance question.
A note on definitions
Several of these terms are defined slightly differently across USPAP, IRS regulation, and federal lending rules. Where that matters to your assignment, the report states which definition was applied. If a term here does not match what you have been told elsewhere, that is usually why — and it is worth a phone call.
Need something on this list explained?
Call and ask. Explaining the standards is literally what the principal does for a living.