Portland Area Real Estate Appraisal Discussion

Portland Appraiser Suggests UAD Definitions for Functional Utility
February 24th, 2014 4:29 PM

The Uniform Appraisal Dataset (UAD) came out a few years ago with rules that standardize inputs for certain fields in appraisal reports used for most lending transactions. For example, home appraisers now use defined C1 through C6 for Condition, rather than using less defined terms like Very Good, Good, Average, and Fair. The new rules were resisted by some residential appraisers because of other complications that can come up in practice. However, when used properly, I think UAD is a step forward for appraisers in terms of appraisal consistency, credibility, and regression analysis (statistical regression works well with quantifiable rankings).

A short time after the release of UAD, an appraisal management client questioned a non-UAD report field (called Functional Utility); because, we entered an undefined term like “Average.” In response, and with no published guidance on the topic, I somewhat jokily developed our own UAD-like definitions to use in that report field. The client was satisfied and, as a result, I began using Functional Utility definitions in all appraisal reports. I continue to do so to this day.

Portland Home Appraiser Comp Grid


As it turns out, the Functional Utility definitions we developed work quite well at displaying information clearly. No reviewer has ever questioned the Functional Utility definition use and many appraisal clients have since complimented them. The following are the Functional Utility definitions that I developed and use in all A Quality Appraisal’s reports:

F1: Sets today’s standard for maximally functional with almost no functional obsolescence for the typical buyer.


F2: Suffers from minimal functional obsolescence in the eyes of the typical buyer and can be easily cured.


F3: Suffers from some functional obsolescence (the kind that is typical in older properties or properties with less popular floor plans) that is not easily cured, but satisfactory for many buyers.


F4: Suffers from obvious and/or severe functional obsolescence that may or may not be curable and negatively affects the overall livability of the improvement for most buyers.


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Thanks for reading,


Great explanation of determining total economic life. I know several Realtors in Portland and whenever a need arises I do not hesitate to refer Gary. He is an excellent, professional, knowledgeable appraiser.

Posted by Jeff Hamric on March 4th, 2014 11:15 AM
This is a great idea! If there was anything on the grid that needed to be qualified, it was functional utility.

Posted by Jacqueline Watson on March 24th, 2015 11:27 AM
Thank you Jacqueline for the comment. I hope that in the next update of UAD, Fannie will use my suggestion.

Posted by Gary Kristensen on March 24th, 2015 11:40 AM
Hi Gary: I was researching guidance for UAD Functional Utility line item and came across your solution to the problem. Apparently, UAD guidelines still do not address this topic and after God knows how many completed appraisals that I have completed over the years since UAD has come out, a management company is taking issue with the term average in this non guided field. Do you have any objection with this solution being used by other appraiser's? If not, I would like to incorporate it into our UAD self defined data set to alleviate the present problem. Please let me know your feelings on the subject. Thanks, Gary La Carrubba 631 983 8260 Certified R.E. Appraiser NY State

Posted by Gary La Carrubba on September 6th, 2016 9:41 PM
I'm glad you found our website Gary. You're welcome to use our functional ratings and I would love to see Fannie Mae adopt our ratings for use with UAD.

Posted by Gary Kristensen on September 6th, 2016 11:47 PM
This is the best idea I've seen in a long time. Thank you for allowing us to use your definitions.

Posted by Mardi Brendt on February 4th, 2018 2:06 PM


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