Definition
The Uniform Residential Appraisal Report (URAR) is a standardized form utilized by real estate appraisers to formally document the appraisal of residential properties. It is specifically required by major secondary mortgage purchasers, such as Fannie Mae and Freddie Mac. The URAR provides a detailed analysis and a definitive conclusion on the value of a dwelling. Various checklists, definitions, and certifications are incorporated within the form (Fannie Mae Form 1004) to ensure consistency and completeness in reporting.
Examples
- Primary Residence Valuation: A homeowner seeks refinancing options. An appraiser evaluates the property and records the relevant data—such as property condition, neighborhood quality, and recent comparable sales—on the URAR to determine its market value.
- Pre-Sale Appraisal: Before placing a home on the market, a seller hires an appraiser to ascertain a fair selling price using the URAR, providing a clear and standardized form that potential buyers and mortgage companies can trust.
Frequently Asked Questions
What is the purpose of the URAR?
The URAR serves to standardize the appraisal reporting process, ensuring that residential property valuations are consistent, thorough, and accurate. This consistency is particularly critical for secondary mortgage buyers like Fannie Mae and Freddie Mac.
Who uses the URAR?
The URAR is primarily used by licensed real estate appraisers. Mortgage underwriters, lenders, and secondary mortgage purchasers utilize the appraised value documented on the URAR for lending and purchasing decisions.
Which form is used for the URAR?
The precise form for the URAR is Fannie Mae Form 1004, although similar forms like Form 2055 may be used under specific circumstances.
Fannie Mae Form 1004: The specific form associated with the URAR, used to document appraisals of single-family homes.
Freddie Mac: A government-sponsored enterprise and critical secondary mortgage purchaser, requiring standardized forms like the URAR for consistency in mortgage purchasing.
Comparative Market Analysis (CMA): A method used to estimate the value of a property by evaluating similar properties that have recently sold within the same area.
Appraisal Management Company (AMC): An intermediary entity that works with lenders and appraisers to facilitate the appraisal process while ensuring impartiality and adherence to standards.
Online Resources
References
- Fannie Mae. “Residential Appraisal Report Forms and Guidelines.”
- The Appraisal Foundation. “Uniform Standards of Professional Appraisal Practice (USPAP).”
Suggested Books
- The Appraisal of Real Estate by The Appraisal Institute
- Real Estate Valuation by G. Stacy Sirmans and Wayne R. Archer
- Principles of Real Estate Practice by Timothy W. Bellisima and Charles J Jacobi
### What is the primary purpose of the Uniform Residential Appraisal Report (URAR)?
- [x] To standardize the appraisal reporting process for residential properties.
- [ ] To set property tax rates.
- [ ] To register new residential properties.
- [ ] To list properties for sale.
> **Explanation:** The primary purpose of the URAR is to standardize the residential property appraisal reporting process, ensuring consistency and accuracy, especially for secondary mortgage purchasers.
### Who primarily uses the URAR to document property values?
- [x] Licensed real estate appraisers
- [ ] Real estate agents
- [ ] Property managers
- [ ] Homebuyers
> **Explanation:** Licensed real estate appraisers use the URAR to document property values. These professionals are trained to make objective assessments of a property's value.
### Which form corresponds to the Uniform Residential Appraisal Report (URAR)?
- [x] Fannie Mae Form 1004
- [ ] Fannie Mae Form 2055
- [ ] Fannie Mae Form 2106
- [ ] Fannie Mae Form 2006
> **Explanation:** The specific form that corresponds to the URAR is Fannie Mae Form 1004, used for single-family home appraisals.
### What does the URAR include to ensure consistency in appraisal reporting?
- [x] Checklists and definitions
- [ ] Property tax information
- [ ] Real estate sales contracts
- [ ] Mortgage rates
> **Explanation:** The URAR includes various checklists, definitions, and certifications to ensure consistent and accurate appraisal reporting.
### Who commonly requires the use of the URAR for report submission?
- [x] Secondary mortgage purchasers like Fannie Mae and Freddie Mac
- [ ] Real estate brokerages
- [ ] Homeowner associations
- [ ] Property insurers
> **Explanation:** Secondary mortgage purchasers such as Fannie Mae and Freddie Mac require the use of the URAR for standardizing appraisal report submissions and ensuring reliability for mortgage investments.
### Can the URAR be used for commercial property appraisals?
- [ ] Yes, it is universally applicable.
- [x] No, it is specifically for residential properties.
- [ ] Only if the commercial property has a residential component.
- [ ] Only in select circumstances.
> **Explanation:** The URAR is specifically designed for residential property appraisals and is not applicable for commercial property appraisals.
### Which secondary mortgage purchaser commonly uses the URAR?
- [x] Fannie Mae
- [ ] FHA
- [ ] HUD
- [ ] Veterans Affairs (VA)
> **Explanation:** Fannie Mae is a secondary mortgage purchaser that commonly uses the URAR for standardized residential appraisals.
### What type of value assessment is typically concluded on the URAR?
- [x] Market value of a residential property
- [ ] Insurance value of a residential property
- [ ] Renovation cost of a residential property
- [ ] Land value of the property
> **Explanation:** The URAR typically concludes the market value of a residential property, which is crucial for lending and purchasing decisions.
### When would an appraiser use Form 2055 instead of the actual URAR?
- [ ] Always for multi-family homes
- [x] For exterior-only appraisals
- [ ] For properties over $500,000
- [ ] Only for rural properties
> **Explanation:** Form 2055 is used for exterior-only appraisals, which provide a limited scope compared to the full URAR.
### What essential component must an appraiser include in the URAR to substantiate their valuation?
- [x] Comparable sales
- [ ] Building permits
- [ ] Occupancy history
- [ ] Zoning reports
> **Explanation:** Appraisers must include comparable sales in the URAR to substantiate their valuation, providing a concrete basis for the property's estimated market value.
