Sphinx · Glossary

Glossary

The terms a finding uses, and the appraisal vocabulary it rests on.

Appraisal Concepts

1004 Form: Fannie Mae's Uniform Residential Appraisal Report. The standard form for single-family residential appraisals, covering both as-is and subject-to-completion scenarios.
After-Repair Value (ARV): The appraised value of a property assuming completion of proposed renovations. This is the value RTL lenders underwrite against for rehab loans.
As-Is Value: The market value of a property in its current condition, before any repairs or improvements are made.
Subject-to-Completion: An appraisal approach where value is estimated assuming planned improvements are finished. The appraiser relies on a scope of work to project the completed condition.
Scope of Work: The detailed renovation plan that defines what improvements will be made to the property. Appraisers use this to project the completed condition and estimate ARV.
Review Appraisal: A formal USPAP Standard 3 engagement where a licensed appraiser reviews another appraiser's work. Sphinx does not produce review appraisals. A Sphinx finding is analytical review of the appraisal document — arithmetic, consistency, comparison to public data — not an opinion of value.

Condition & Quality Ratings

UAD Condition Rating (C1–C6): Uniform Appraisal Dataset ratings describing property condition. C1 is new construction, C6 requires significant renovation. Most RTL subjects are C5 or C6 as-is.
UAD Quality Rating (Q1–Q6): Ratings describing construction quality. Q1 is unique/custom, Q6 is basic/economy. These ratings affect comparable selection and adjustments.
Condition Spread: The difference between the subject's current condition and its projected post-renovation condition. A C5-to-C2 spread represents significant value creation.

Comparable Analysis

Comparable Sale (Comp): A recently sold property similar enough to the subject to serve as evidence of value. Appraisers adjust comp prices to account for differences from the subject.
Adjustment: A dollar amount added or subtracted from a comp's sale price to account for differences from the subject (e.g., smaller lot, worse condition, more bedrooms).
Net Adjustment: The sum of all adjustments for a comparable. High net adjustments (typically >15% of sale price) indicate the comp may not be well-matched to the subject.
Gross Adjustment: The sum of absolute values of all adjustments. High gross adjustments (typically >25%) suggest the comp differs significantly from the subject in multiple ways.
Bracketing: The practice of selecting comparables that bracket the subject's characteristics—some larger, some smaller; some better condition, some worse—so adjustments trend toward the subject from different directions.

RTL Lending Terms

Residential Transition Lending (RTL): Short-term loans for property investors acquiring, renovating, or stabilizing residential real estate. Includes fix-and-flip, ground-up construction, and bridge loans.
Fix-and-Flip: A rehab loan strategy where an investor purchases a distressed property, renovates it, and sells for profit. Loan term typically 12–18 months.
Ground-Up Construction: New construction financing where the collateral is unimproved land plus the value of improvements as they're built. Higher risk than rehab due to longer timeline and construction risk.
Bridge Loan: Short-term financing used to "bridge" between property acquisition and permanent financing or sale. Often used for stabilization of recently renovated properties.
Loan-to-Value (LTV): The ratio of loan amount to property value. RTL lenders typically cap at 70–75% of ARV to maintain cushion against value variance.
Loan-to-Cost (LTC): The ratio of loan amount to total project cost (purchase price plus renovation budget). A secondary constraint alongside LTV.

Sphinx Terms

Underwriting the Appraisal: Testing the appraisal the way the borrower, the property and the deal are already tested: whether its comparables, adjustments and budget support the value it states. The activity Sphinx performs. Not a review appraisal (see above).
Finding: The document Sphinx returns for each appraisal underwritten: the value the file supports, the range around it, and the flags ranked by dollar effect, each citing a check in the Sphinx Standard. Built to be filed with the loan and reproduced later without access to Sphinx.
Supported Value: The value the appraisal's own evidence holds up once fired checks with a dollar effect are applied, as distinct from the value the appraisal states. Always shown with a range.
Flag: A check that fired on a file. Each cites its check and is one of three kinds, matching the standard's output types: a correction, which moves the supported value by a dollar effect; a range widener, which widens the supported range without moving the value; or a flag, which does neither. A finding ranks them by dollar effect.
Confidence: How firmly the file supports its number, shown out of 100 with a band: 80 and above high, 60 to 79 moderate, below 60 low. Not a probability and not extraction accuracy. It falls when the underlying evidence is thin — few comparables, stale sales, heavy adjustments, a long project timeline, a volatile submarket — and when a field a check depended on could not be read cleanly. Low confidence is not a flag; a clean appraisal in a thin market can score 60 with nothing wrong. Low confidence doesn't mean wrong — it means the file supports its number less firmly.
Supported Range: The range around the supported value, stated with its coverage: at 80% coverage, four times in five the value the evidence supports falls inside it. It starts from a base width for the submarket and project type and is widened by fired checks that thin the evidence. Driven by the same inputs as confidence, so the two never disagree.
The Sphinx Standard: Published methodology of 56 checks across comparable selection, adjustments, the after-repair value, subject and file integrity, and appraiser performance. Transparent and versioned so lenders know exactly what's being evaluated.
Check Family: A group of related checks in the standard. Families: Comparable selection (RTL-C), Adjustments (RTL-A), After-repair value (RTL-V), Subject & file integrity (RTL-S), and Appraiser (RTL-P).

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RTL-STD-001 v1.0 · published · this page last updated 2 September 2026 · status

The Sphinx standard describes analytical review of an appraisal report. It is not an appraisal, not a valuation, and not a review appraisal under USPAP Standard 3. Outputs are internal analytical inputs for credit decisioning. They are not communicated to appraisers and are not a basis for requesting revision to any report.