The primary difference is that the 1004 (Uniform Residential Appraisal Report) is for single-family homes, while the 1025 (Small Residential Income Property Appraisal Report) is for 2–4 unit multi-family investment properties. The 1025 includes in-depth income analysis, rental comparables, and operating income statements not required in a standard 1004.
Keep in mind that Form 1004C is used for appraising single-family manufactured housing, while Form 1073 is used for condominium units. On the other hand, Form 1025 is for small multi-family investment properties.
Form 1025 is used to appraise small residential income properties, typically 2-4 units. It documents property details, income and expenses, comparable sales, and market value analysis.
The three main types of real estate appraisal approaches used to determine property value are the Sales Comparison Approach, the Cost Approach, and the Income Capitalization Approach, each offering a different perspective on value, with the Sales Comparison Approach being most common for residential homes and the others useful for unique or investment properties.
A URAR form, also known as Fannie Mae Form 1004, contains information needed to complete a full appraisal of a property using three primary approaches to determine value: cost approach, sales comparison approach and income approach.
New construction appraisal can remain valid for up to one year. FHA loan appraisals can be valid for up to 120 or 240 days if updated with a 1004D. A new assignment must happen if the FHA case number changes, even if the original appraisal is within the initial 120-day validity time frame.
Form 1025 is also used by appraisers to assess income properties. It differs from the 1007 in that it is used to assess duplexes, triplexes, and fourplexes. Form 1025 considers both rental income and fair market value of the comparable properties.
Cost Approach to Value
The cost approach can be used to appraise all types of improved property. It is the most reliable approach for valuing unique properties. The cost approach provides a value indication that is the sum of the estimated land value, plus the depreciated cost of the building and other improvements.
The "3-3-3 rule" in real estate isn't a single guideline but refers to different strategies: for buyers, it's about financial readiness (3 months savings, 3 months reserves, 3 property comparisons) or a financial affordability check (30% income, 30% down, 3x income); for agents, it's a marketing habit (call 3, note 3, share 3) or prospecting (talking to everyone within 3 feet). There's also a developer rule (1/3 land, 1/3 build, 1/3 profit), though it's considered outdated by some.
The most common types of appraisal are:
Form 1025 is used for small residential income property appraisals, which includes a comparable rent schedule.
When talking to a home appraiser, avoid pressuring them for a specific value, asking them to ignore issues, or trying to control their process, as this can be seen as manipulation; instead, provide factual details about upgrades and unique features while remaining polite and objective, letting them do their job. Don't say things like "I need it to appraise for X," "Zillow says my home is worth..." or "Can you leave out the short sales?" because appraisers must stay impartial and can be removed for undue influence.
Fannie Mae Form 1025 March 2005. The purpose of this summary appraisal report is to provide the lender/client with an accurate, and adequately supported, opinion of the market value of the subject property.
Likewise, in Los Angeles, California, the average fee for a 1004 appraisal increased from $351–$400 to $401-$450 from 2010 to 2017. This type of comparative data is available to all appraisers and industry stakeholders free of charge.
The Appraisal Update and/or Completion Report (Form 1004D) is used to update an appraisal or provide confirmation that the requirements or conditions in an appraisal report have been met (such as completion of construction or repairs).
The "7% rule" in real estate typically refers to a quick screening tool where an investor checks if a rental property's gross annual rent is at least 7% of its purchase price, indicating a potentially solid income investment, though it's not a substitute for detailed analysis; however, other "7 rules" exist, like those focusing on agent performance (top 7% of agents do most business) or key investment principles (due diligence, diversification, market awareness, clear strategy) for long-term success.
The "3-day appraisal rule" refers to requirements under the Equal Credit Opportunity Act (ECOA) for mortgage lenders to provide borrowers with a free copy of the appraisal (and other valuations) at least three business days before loan closing, and to notify them of this right within three business days of application; borrowers can waive the pre-closing timing, but the lender must still provide it promptly. This ensures borrowers see the property's value before committing to the loan, though the lender must also provide it promptly upon completion, even if the loan doesn't close.
Exterior improvements to increase home value for appraisal
States like California expressly prohibit basements from being counted as an extra story. However, this doesn't mean prospective buyers won't view it as such.
A property inspection waiver (PIW) mortgage is a type of home loan that doesn't require an appraisal for approval. Instead of getting a full home appraisal report, Fannie Mae and Freddie Mac — two government-sponsored entities that back mortgages — let lenders use existing property data.
In accordance with USPAP a 1004, or URAR, is completed when estimating the market value of a single-family dwelling complete with an exterior and interior inspection. It includes information about the property, the neighborhood, market statistics, comps, property photos, floor plans, and other pertinent details.