Condition Adjustment in same designation

[CANative]

I figured that part went without saying, but the upgrades or remodel of two similar quality homes would effect the quality differences as well as the condition of the home.

I explain it in the UAD condition addendum.

 

[J Grant]

I figured that part went without saying, but the upgrades or remodel of two similar quality homes would effect the quality differences as well as the condition of the home.

I disagree ( with exception) Two model match homes, built 20 years ago. One of them has recent upgrades, kitchen redone with granite counters and baths remodeled - the home has been upgraded, but the overall quality of the build and architecture has not changed - it still has same ceiling height, window openings, fenestration or lack of it, CBS or wood etc, as the non upgraded home.

Of course upgrades have a quality of their own which needs be commented on.. Some upgrades are more costly/ better materials/design than others.

Explain, wherever we apply the adjustment..

 

[Mr Rex]

I disagree ( with exception) Two model match homes, built 20 years ago. One of them has recent upgrades, kitchen redone with granite counters and baths remodeled - the home has been upgraded, but the overall quality of the build and architecture has not changed - it still has same ceiling height, window openings, fenestration or lack of it, CBS or wood etc, as the non upgraded home.

Of course upgrades have a quality of their own which needs be commented on.. Some upgrades are more costly/ better materials/design than others.

Explain, wherever we apply the adjustment..

Sounds like a textbook condition adjustment. Why go off the reservation for an adjustment?

 

[Tim Hicks (Texas)]

I disagree ( with exception) Two model match homes, built 20 years ago. One of them has recent upgrades, kitchen redone with granite counters and baths remodeled - the home has been upgraded, but the overall quality of the build and architecture has not changed - it still has same ceiling height, window openings, fenestration or lack of it, CBS or wood etc, as the non upgraded home.

Of course upgrades have a quality of their own which needs be commented on.. Some upgrades are more costly/ better materials/design than others.

Explain, wherever we apply the adjustment..

I realize you are not going to change the way you do things, but that is how the form was designed. Another case in point: Two 70 year old craftsman homes. One investor remodels one entire home with laminate, new veneer counter tops, new fiberglass bath/shower enclosures, new electrical and plumbing fixtures, new paint, etc. The other investor remodels the second entire home with hard wood floors, granite counters throughout, ceramic tile showers and bath enclosures, high end appliances, etc. Both are remodeled homes, both have a similar effective age. The difference is the quality of improvements as both have all new features, but one is has better upgrades. This is not a condition adjustment, this a quality adjustment. It does not need to be a separate line adjustment, the quality will still probably be the same quality rating as the bones and skin are basically similar, but the internal organs are better. Just explain the adjustment on the quality line.

 

[J Grant]

I realize you are not going to change the way you do things, but that is how the form was designed. Another case in point: Two 70 year old craftsman homes. One investor remodels one entire home with laminate, new veneer counter tops, new fiberglass bath/shower enclosures, new electrical and plumbing fixtures, new paint, etc. The other investor remodels the second entire home with hard wood floors, granite counters throughout, ceramic tile showers and bath enclosures, high end appliances, etc. Both are remodeled homes, both have a similar effective age. The difference is the quality of improvements as both have all new features, but one is has better upgrades. This is not a condition adjustment, this a quality adjustment. It does not need to be a separate line adjustment, the quality will still probably be the same quality rating as the bones and skin are basically similar, but the internal organs are better. Just explain the adjustment on the quality line.

You just said it...the quality of the IMPROVEMENTS ( the later aftermarket upgrades which dos not change the quality of the house. ( house quality is the craftsman architecture and building materials of that era, either maintained or restored )
Two 70 year old craftsman houses both have the same build quality call it C 3 here. The photos and comments on the style/era. explain it
The home that got crappy upgrades of veneer /laminate, I call it on grid Upgrades/ Inf. The home with the hardwood /better, I' call it Upgrades/sup. That shows the differences clearly on the grid, with additional narrative comment on them

Your way (imo) is more confusing, because it can mean to a reader a quality difference not just in the aftermarket upgrades, but between the houses /their construction. We each have our point of view, seems either is acceptable by users and the appraiser needs to explain and comment either way.

 

[norapp]

My typical comment would be similar to this: Condition adjusted 3-5% even within the same class based on photos showing upgrades/finishes. (Adjustment range differs per assignment) If more explanation is needed I do it explaining my comps. Many lenders are using the internet to see interior photos so if they want to see it they can.

 

[J Grant]

My typical comment would be similar to this: Condition adjusted 3-5% even within the same class based on photos showing upgrades/finishes. (Adjustment range differs per assignment) If more explanation is needed I do it explaining my comps. Many lenders are using the internet to see interior photos so if they want to see it they can.

3%? What a dinky adjustment, hardly worth making. Condition (not quality) is either equivalent or not, if equivalent, a 3-5 % range between properties is normal. However, if one is significantly updated or sig deferred maintenance: that is when an adjustment is warranted because that is when it tends to show up in price. After a certain threshold, the C rating can change.

I describe rather than show interior photos of the comps, I'd hate to see that become yet another lender expectation, and could infringe on MLS copyright/privacy etc. One thing to use an MLS ext photo with client permission, another to show personal interior with furniture etc. Plus if they view interior photos, a client can question our judgement - they think the wood cabinets and granite are just as nice why is appraiser adjusting for a difference etc, and teh time consumed by putting in the photos...A brief summation of what is adjusted for not a detail item by item...(typically enough)

 

[Dale Floyd]

It's pretty clear in the selling guide... Here's a copy and paste.

Note: Properties can have the same rating or description and still require an adjustment. It should be noted that this does not only apply to Condition and Quality ratings and can apply to other ratings or descriptions as well. For example, all water views may not be equal. In this instance, an adjustment should be made and explained in the Additional Comments section of the form or in an addendum.

 

[J Grant]

It's pretty clear in the selling guide... Here's a copy and paste.

Note: Properties can have the same rating or description and still require an adjustment. It should be noted that this does not only apply to Condition and Quality ratings and can apply to other ratings or descriptions as well. For example, all water views may not be equal. In this instance, an adjustment should be made and explained in the Additional Comments section of the form or in an addendum.

It does NOT say in the selling guide the adjustment must be made in that C or Q line! It just says properties can have a same rating and still require an adjustment.

The problem is poor form design. The view line ( other ) water etc allows room right there to make a comment , open , ocean etc. No room in the numerical ratings for that on the grid . And the C ratings are less confusing to do that on than the Q ratings, since the Q ratings is the ext and int and bones of the structure, not just aftermarket upgrades .

 

[Dale Floyd]

It does NOT say in the selling guide the adjustment must be made in that C or Q line! It just says properties can have a same rating and still require an adjustment.

I believe they were very clear. The section is talking specifically about the ratings involving those lines. If the intent was to utilize another section, I think it would have said that.

An adjustment can be made on the same grid line for properties with the same rating. For that matter, we did it that same way prior to the UAD rating codes. It just needs to be explained.