> ## Documentation Index
> Fetch the complete documentation index at: https://learn.hometrics.ai/llms.txt
> Use this file to discover all available pages before exploring further.

# Understanding the Report

> Reading and interpreting appraisal reports

Appraisal reports follow standardized formats that contain detailed information about the property, comparables, and value conclusion. Understanding how to read these reports helps property owners verify accuracy and understand how value was determined.

Borrowers are entitled to receive a copy of any appraisal they paid for.

## Report Sections

<AccordionGroup>
  <Accordion title="Subject section">
    Identifies the property being appraised:

    * Property address
    * Legal description
    * Owner of record
    * County and tax ID
    * Map reference
    * Census tract
    * Occupancy status
    * Property rights appraised

    Verify address and basic information is correct.
  </Accordion>

  <Accordion title="Contract section">
    For purchase appraisals, includes transaction details:

    * Contract price
    * Date of contract
    * Seller concessions
    * Financing type
    * Is property currently listed?
    * Prior sales history (last 3 years)

    Appraiser analyzes whether contract price is consistent with market.
  </Accordion>

  <Accordion title="Neighborhood section">
    Describes the surrounding area:

    * Location type (urban, suburban, rural)
    * Built-up percentage
    * Growth rate
    * Property values trend
    * Demand/supply balance
    * Marketing time
    * Predominant occupancy
    * Price range and age range
    * Land use percentages

    Neighborhood characteristics affect value and marketability.
  </Accordion>

  <Accordion title="Site section">
    Details about the land:

    * Lot dimensions and area
    * Shape
    * View
    * Zoning classification
    * Zoning compliance
    * Utilities available
    * Off-site improvements (street, sidewalk)
    * Flood zone designation
    * FEMA map information

    Site characteristics can add or detract from value.
  </Accordion>

  <Accordion title="Improvements section">
    Describes the buildings:

    * General description (units, stories, design)
    * Foundation type
    * Exterior description
    * Interior description
    * Heating and cooling systems
    * Amenities
    * Car storage
    * Gross living area
    * Basement details
    * Condition and quality ratings

    This section contains the most detail about the property itself.
  </Accordion>

  <Accordion title="Sales comparison grid">
    Heart of the appraisal showing comparables:

    * Comparable property details
    * Sale price and date
    * Location comparison
    * Site comparison
    * Design and quality comparison
    * Age comparison
    * Condition comparison
    * Room count comparison
    * GLA comparison
    * Basement comparison
    * Amenities comparison
    * Adjustments for each difference
    * Adjusted sale price

    Shows how appraiser arrived at value through comparison.
  </Accordion>

  <Accordion title="Reconciliation section">
    Appraiser's final analysis:

    * Summary of approaches used
    * Weight given to each approach
    * Final value conclusion
    * Effective date of value
    * Exposure time estimate

    Explains reasoning behind final value opinion.
  </Accordion>
</AccordionGroup>

## Reading the Comparable Grid

<AccordionGroup>
  <Accordion title="How adjustments work">
    Adjustments modify comparable sale prices to account for differences from subject property.

    **Adjustment direction:**

    * If comparable is BETTER than subject: Negative adjustment (subtract from comp price)
    * If comparable is WORSE than subject: Positive adjustment (add to comp price)

    Goal is to estimate what each comparable would have sold for if it were identical to subject.
  </Accordion>

  <Accordion title="Common adjustment categories">
    Typical adjustments include:

    | Category        | Typical Range                |
    | --------------- | ---------------------------- |
    | Location        | \$5,000 - \$50,000+          |
    | Site/lot size   | \$1,000 - \$20,000           |
    | Quality         | \$5,000 - \$30,000           |
    | Age             | \$1,000 - \$15,000           |
    | Condition       | \$5,000 - \$30,000           |
    | GLA (per sq ft) | \$30 - \$100 per sq ft       |
    | Basement finish | \$10 - \$50 per sq ft        |
    | Garage          | \$3,000 - \$15,000 per space |
    | Bathrooms       | \$3,000 - \$10,000           |
    | Fireplace       | \$1,000 - \$5,000            |
    | Pool            | \$5,000 - \$25,000           |

    Adjustment amounts vary by market.
  </Accordion>

  <Accordion title="Net vs gross adjustments">
    **Net adjustment:** Sum of all adjustments (positives and negatives combined)

    **Gross adjustment:** Sum of absolute values (all adjustments added regardless of direction)

    **Guidelines:**

    * Net adjustment over 15% raises questions
    * Gross adjustment over 25% suggests weak comparable
    * Individual adjustment over 10% needs support

    Large adjustments indicate comparable may not be ideal.
  </Accordion>

  <Accordion title="Adjusted sale price">
    After all adjustments, each comparable has an adjusted sale price.

    **Example:**

    * Comparable sold for \$350,000
    * Adjustments total +\$15,000
    * Adjusted sale price: \$365,000

    Appraiser considers range of adjusted prices to develop value conclusion.
  </Accordion>
</AccordionGroup>

<Note>
  The comparable requiring the fewest adjustments is typically given most weight. A comparable with minimal adjustments is more reliable than one requiring extensive modification.
</Note>

## Quality and Condition Ratings

<AccordionGroup>
  <Accordion title="Quality ratings (Q1-Q6)">
    **Q1:** Unique, highest quality

    * Custom architectural design
    * Highest quality materials
    * Exceptional craftsmanship

    **Q2:** High quality custom

    * Custom design
    * High quality materials
    * Above standard craftsmanship

    **Q3:** Above average

    * Good quality materials
    * Above average craftsmanship
    * Some custom features

    **Q4:** Average/standard

    * Standard materials and design
    * Adequate craftsmanship
    * Typical tract or production home

    **Q5:** Fair/basic

    * Economy materials
    * Basic design
    * Minimal features

    **Q6:** Poor/substandard

    * Below standard materials
    * Substandard construction
    * Significant quality issues
  </Accordion>

  <Accordion title="Condition ratings (C1-C6)">
    **C1:** New construction

    * Recently completed
    * No physical depreciation
    * All components new

    **C2:** Like new

    * Very recent construction or fully renovated
    * No deferred maintenance
    * All systems updated

    **C3:** Well maintained

    * Limited physical depreciation
    * Minor deferred maintenance
    * Regular upkeep evident

    **C4:** Average condition

    * Some physical depreciation
    * Minor repairs needed
    * Adequately maintained

    **C5:** Fair condition

    * Obvious deferred maintenance
    * Repairs needed
    * Some items at end of life

    **C6:** Poor condition

    * Significant deferred maintenance
    * Major repairs required
    * Substantial depreciation
  </Accordion>
</AccordionGroup>

## Common Report Elements

<AccordionGroup>
  <Accordion title="Gross living area (GLA)">
    Above-grade finished living space measured in square feet.

    **Included:**

    * All above-grade finished rooms
    * Finished attic areas meeting ceiling height requirements

    **Not included:**

    * Basement (even if finished)
    * Garage
    * Unfinished areas
    * Porches and decks

    GLA is primary size measure for residential appraisals.
  </Accordion>

  <Accordion title="Below-grade area">
    Basement square footage reported separately.

    * Total basement area
    * Finished basement area
    * Partially finished area
    * Unfinished area

    Below-grade space valued less per square foot than above-grade.
  </Accordion>

  <Accordion title="Effective age">
    Reflects property condition, not actual age.

    **Example:**

    * Actual age: 40 years
    * Effective age: 20 years (due to extensive renovation)

    Well-maintained homes have effective age below actual age. Neglected homes may have effective age above actual age.
  </Accordion>

  <Accordion title="Exposure time">
    Estimated time property would have been on market if offered at appraised value.

    **Typical ranges:**

    * Hot market: 30-60 days
    * Normal market: 60-90 days
    * Slow market: 90-180 days

    Longer exposure time suggests less marketable property.
  </Accordion>
</AccordionGroup>

## Verifying Accuracy

<AccordionGroup>
  <Accordion title="Property characteristics">
    Verify these details match your property:

    * Square footage
    * Room count
    * Bedroom and bathroom count
    * Garage spaces
    * Basement size and finish level
    * Year built
    * Lot size

    Errors in basic characteristics directly affect value.
  </Accordion>

  <Accordion title="Improvements noted">
    Confirm updates and improvements are captured:

    * Kitchen renovation date and scope
    * Bathroom updates
    * New roof, windows, HVAC
    * Addition or expansion
    * Finished basement
    * Other significant improvements

    Missing improvements may understate value.
  </Accordion>

  <Accordion title="Comparable selection">
    Review whether comparables are appropriate:

    * Are they truly similar properties?
    * Are they in same or competing neighborhood?
    * Are sale dates recent?
    * Are adjustments reasonable?

    Inappropriate comparables can skew value conclusion.
  </Accordion>

  <Accordion title="Photos">
    Check that photos accurately represent:

    * Current condition
    * Updates and features
    * Any issues noted

    Photos should support condition rating assigned.
  </Accordion>
</AccordionGroup>

<Warning>
  If you find errors in the appraisal report, document them and contact the lender. Factual errors can be corrected. Disagreements about value require formal reconsideration process with supporting evidence.
</Warning>

## Report Types

<AccordionGroup>
  <Accordion title="URAR (Form 1004)">
    Uniform Residential Appraisal Report. Standard form for single-family homes.

    * Full interior and exterior inspection
    * Complete comparable analysis
    * Most common residential form
    * Required for most mortgage transactions
  </Accordion>

  <Accordion title="Form 1073 (Condo)">
    Individual Condominium Unit Appraisal Report.

    * Specific to condo units
    * Includes project analysis
    * HOA and budget review
    * Condo-specific comparables
  </Accordion>

  <Accordion title="Form 1025 (Small Income)">
    Small Residential Income Property Appraisal Report.

    * For 2-4 unit properties
    * Includes income analysis
    * Rent comparables
    * Both income and sales approaches
  </Accordion>

  <Accordion title="Form 2055 (Exterior Only)">
    Exterior-only appraisal without interior inspection.

    * Used for lower-risk transactions
    * Cannot verify interior condition
    * Lower fee than full appraisal
  </Accordion>

  <Accordion title="Narrative report">
    Detailed written report without standardized form.

    * Used for complex properties
    * More explanation and analysis
    * Common for litigation and estates
    * Higher fee due to additional work
  </Accordion>
</AccordionGroup>

## Using Report Information

<AccordionGroup>
  <Accordion title="For buyers">
    Report tells you:

    * Independent value opinion (does price make sense?)
    * How property compares to others
    * Condition assessment
    * Neighborhood analysis
    * Potential concerns noted

    Use to confirm you're paying fair price.
  </Accordion>

  <Accordion title="For sellers">
    Report tells you:

    * Market-supported value
    * How your home compares to competition
    * Adjustments buyers consider
    * Features adding or detracting value

    Use to understand buyer's perspective on value.
  </Accordion>

  <Accordion title="For refinancing">
    Report tells you:

    * Current market value
    * Equity available
    * Loan-to-value calculation basis
    * How value has changed since purchase
  </Accordion>
</AccordionGroup>

***

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  <Card title="Next: Low Appraisals" icon="arrow-right" href="/service-categories/appraisers/low-appraisals">
    Options when value comes in below expectations
  </Card>

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    Research licensed appraisers in your area
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