Portland Area Real Estate Appraisal Discussion

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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