A Condition Rating Question

[Terrel L. Shields]

makes it less about geo neighborhood and more about finding a property with similar attribute

Exactly, but to the point of the neighborhood, if a person looks at 10 different places in disparate areas, and the "best deal" was in one particular neighborhood that hardly eliminates the others as comparable. As for school district, as I point out in some places (Little Rock for instance) you don't get to choose the school unless you go to a private one and adjacent houses may send kids to schools far away.

And even a rapidly growing place like Bentonville, AR (which if including BV, Centerton and Cave Springs) has quadrupled in 20 years. The school system remains one, and a clear demarcation between values inside and outside the school district are distinct to the west, but invisible to the east (Rogers). And that school district is approaching 20 miles from far corner to far corner. These value drivers are distinct from the decision making process that proceeds it. If a party wants to stay in the Bentonville School district they have a huge number of options...yet we are dinged for not looking at only the most proximate regardless that one of those "proximate" sales might be in the Gentry, Decatur or Gravette school districts? Not that they are bad schools, it is that they are incredibly inconvenient for people who work in Bentonville for Walmart or one of its vendors. If a child gets sick it could mean driving 40 miles round trip to pick them up, whereas if the child was in Bentonville schools it might be from 2 to 10 miles round trip. Ditto for school events.

I doubt 50% of buyers have school age children. And the demographic bears out that the average age of the buyer in Bentonville is younger than surrounding towns. So how can school district be such a dominant factor that the search area gets shoehorned into a one mile radius?

If "they" don't' trust appraisers (based on the bad actors esp during the boom),the feeling is mutual

Amen. But to expand on that. We need to stop thinking about what happened 2000-2007 in hindsight mode. What did the appraisal world look like then. Today it may look like fraud. But in the context of that time, the banks and Fannie mae was getting exactly what they wanted and what they asked for. They did not want to slow the process of printing money with MBSs so they did not vet the crap pedaled to them by banks who in turn, were perfectly happy to accept the work of appraisers, often when their own reviewers were red flagging them. But the bigger issue was that no price was too high and ALL appraisers were buying into it or they didn't work. They didn't necessarily inflate an appraisal so much as to use inflated sales - sales that they could not tell were inflated because there was no "smoking gun" to tell them, no clue in the MLS, no way of determining that these prices were very much inflated. And how many appraisers - not dinks but real appraisers, especially in the hot areas of Las Vegas, Phoenix, Florida, and S. California came into this site and remarked that prices had been increasing by 3 - 10% PER MONTH. Logic tells me such a price increase is not market, rather is irrational and unsustainable. But for many appraisers it was the situation at least temporarily. So look today and what happened? Those same areas crashed the worst, and recovered the fastest with many of them right back on track to doubling in one or two years....with a predictable end sometime in the unspecified future.

blatant mis representation of quality of condition

To some agents a tear down is "average" condition and every thing else is in "good" condition no matter how dated the appliances and carpet may be. If an appraiser does not use the database feature, and when they reuse a comparable changed the C rating or Q rating, that may not represent a deliberate fraud, but rather a subconscious attempt to make the data fit conform to the project and often (again) that "C" or "Q" rating is part one and part the other and thus subjective regardless. That is a result of an anchor bias, a bias we all possess but rarely recognize. It is a decision the appraiser makes because it seems to fit, not because it actually does fit.

 

[TRESinc]

i called it C2.

The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category are either almost new or have been recently completely renovated and are similar in condition to new construction.
Note: The improvements represent a relatively new property that is well maintained with no deferred maintenance and little or no physical depreciation, or an older property that has been recently completely renovated.

this makes sense as the only item not replaced is the roof which still have more than 2/3s of it's life left. when i look at C3:

The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well maintained.
Note: The improvement is in its first-cycle of replacing short-lived building components (appliances, floor coverings, HVAC, etc.) and is being well maintained. Its estimated effective age is less than its actual age. It also may reflect a property in which the majority of short-lived building components have been replaced but not to the level of a complete renovation.

i can't imagine how anyone would call a down-to-studs renovated house, including all new electrical and plumbing, a C3 based on the sole item of an 11 year old roof that does not need any updating/rehabilitation. a 30+ year roof is not a short-lived building component.