Uniform Residential Appraisal Report
The Uniform Residential Appraisal Report (URAR) is a standardized appraisal form used by real estate appraisers to evaluate single-family residential properties. Developed by the Federal Housing Administration (FHA) and adopted by Fannie Mae and Freddie Mac, the URAR is widely used in the mortgage industry to assess the value of residential properties for lending and underwriting purposes.
The URAR provides a structured format for appraisers to document their analysis and conclusions regarding the market value of a property. The report typically includes the following sections:
1. Subject Property Information: Details about the property being appraised, including its address, legal description, property type, and characteristics such as size, age, and construction type.
2. Neighborhood Description: Information about the neighborhood or area in which the subject property is located, including trends in property values, market conditions, and other factors affecting value.
3. Comparable Sales Analysis: Analysis of recent sales of
comparable properties (comps) in the same or similar area to determine the
market value of the subject property. This section typically includes details about the
comps, such as sale price, sale date, location, size, and features, as well as adjustments made to account for differences between the subject property and the comps.
4. Cost Approach: An estimate of the value of the subject property based on the cost of replacing or reproducing the improvements, minus
depreciation, plus the value of the land. This approach is often used for new or relatively new properties where
comparable sales data may be limited.
5. Sales Comparison Approach: An estimate of the value of the subject property based on recent sales of
comparable properties in the area. This approach relies on the principle of substitution, which states that a
buyer will pay no more for a property than the cost of acquiring a comparable substitute property.
6. Income Approach (if applicable): An estimate of the value of the subject property based on its income-generating potential, typically used for rental properties or income-producing properties such as multi-family dwellings or commercial properties.
7. Final Reconciliation and Opinion of Value: The appraiser’s final opinion of the
market value of the subject property, based on their analysis of the market data and the three approaches to value.
The URAR provides lenders, underwriters, and other stakeholders with a standardized and comprehensive assessment of a residential property’s value, helping to ensure informed lending decisions and mitigate risk in mortgage transactions. Additionally, the URAR helps ensure consistency and uniformity in the appraisal process, which is essential for maintaining the integrity and reliability of real estate valuations.
