C5 vs C6

[mp2277]

I inspected a 115 yo house yesterday, a large 4000 sf home in an historic town. I do no do many C5 homes and rarely a C6. The C6 properties I have done are obviously in need of a bulldozer and a dump truck LOL. This is an FHA reverse mortgage situation. It is occupied. In a nut shell, serious roof issues and a bathroom ceiling fallen in, attic is showing water damage and possible mold. Severe peeling interior and exterior paint and crumbling/missing brick support pillars in the basement and crawl areas. I feel although occupied and not condemned by the municipality it is C6. It is a tough call. Advise appreciated, especially from anyone with experience appraising distressed properties. Thanks in advance!

 

[J Grant]

I inspected a 115 yo house yesterday, a large 4000 sf home in an historic town. I do no do many C5 homes and rarely a C6. The C6 properties I have done are obviously in need of a bulldozer and a dump truck LOL. This is an FHA reverse mortgage situation. It is occupied. In a nut shell, serious roof issues and a bathroom ceiling fallen in, attic is showing water damage and possible mold. Severe peeling interior and exterior paint and crumbling/missing brick support pillars in the basement and crawl areas. I feel although occupied and not condemned by the municipality it is C6. It is a tough call. Advise appreciated, especially from anyone with experience appraising distressed properties. Thanks in advance!

IDK- since none of us has seen the property, how can we make that call?

But...1) read the definitions again, see which most closely applies, and 2) for me, a dividing line is...if it costs more to fix it than the property is worth, it is C 6, It is C 5 when it needs extensive repairs but the repairs are worth making because it is economically feasible with enough value left in the house to make expensive/extensive repairs worthwile.

Sounds like it needs inspections if it is called a C 5...

 

[TerryRohrer]

IDK- since none of us has seen the property, how can we make that call?

But...1) read the definitions again, see which most closely applies, and 2) for me, a dividing line is...if it costs more to fix it than the property is worth, it is C 6, It is C 5 when it needs extensive repairs but the repairs are worth making because it is economically feasible with enough value left in the house to make expensive/extensive repairs worthwile.

Sounds like it needs inspections if it is called a C 5...

Read the definitions again. They don't mention the cost of repairing deferred maintenance as a criterion for classification.

 

[Zoe]

IDK- since none of us has seen the property, how can we make that call?

But...1) read the definitions again, see which most closely applies, and 2) for me, a dividing line is...if it costs more to fix it than the property is worth, it is C 6, It is C 5 when it needs extensive repairs but the repairs are worth making because it is economically feasible with enough value left in the house to make expensive/extensive repairs worthwile.

Sounds like it needs inspections if it is called a C 5...

Girl. it is health and safety related. get a grip.

 

[Zoe]

Okay JGrant, you could care less about health and safety of any of occupants. Is that you?

It doesn't really matter to me C5 or C6. I care about the occupants and cost to cure.

 

[Zoe]

Well I do have to worry about FHA and the lender because they have dough and money in game and they are my client. The client has skin in the game.

 

[J Grant]

Read the definitions again. They don't mention the cost of repairing deferred maintenance as a criterion for classification.

I am aware of that fact about the definitions I was telling the OP a method I use when I am not sure whether to call it a C 5 of C 6. HBU would be torn down a C 6 due to not being habitable , and incurable due to the cost of repair not being feasible to recoup.

 

[Zoe]

I am aware of that fact about the definitions I was telling the OP a method I use when I am not sure whether to call it a C 5 of C 6. HBU would be torn down a C 6 due to not being habitable , and incurable due to the cost of repair not being feasible to recoup.

I'll pin you because I like you.

MV definition and H&B use analysis. You know client is FHA/lender.

How will you determine if H&B use is demolish or improve without expert licensed and bonded estimate like engineer or whoever?

 

[Surf Cat]

Remember...... as it currently stands, if any portion of the dwelling is rated a C6, the whole dwelling must be rated a C6.
The items you mention are beyond ordinary deferred maintenance and points to extensive deterioration and safety concerns as Zoe mentioned.

A way to approach this would be to describe it as a probable C6 condition rating with supporting observations, rather than stating it as an absolute if you want to stay conservative. To stay on the safest appraisal footing, you could also note that the property appears to have condition deficiencies consistent with C6 and may require significant repairs before it would satisfy FHA reverse mortgage requirements.

Good luck....

 

[J Grant]

For lending work, many clients have instructions to call them if the appraiser thinks a property is C 5 or C 6. The lender will often cancel the assignment at that point. If not, good luck...