Age Of A House

[Mike Garrett RAA]

Some like to consider age adjustment to be basically incurable and condition adjustment to be cureable....all of which is, very subjective. I have developed an adjustment for age which seems to work well within specific markets and price ranges IN MY MARKET. It also is subjective and subject to debate. Remember, this is not a science, it is an art with some scientific principles mixed in.

 

[Elliott]

Most older homes were either built in 1900 or 1930,
that's what's on most assessor cards. I'm sure
1900 must have been a boom year for new
construction.

If I don't know the year built, I put "Est A:XX E:XX"
I've never based my adjustments on the actual age,
only on the effective age.

elliott

 

[Jo Ann Meyer Stratton]

An adjustment might be warranted between a 100 year old home versus a 50 year old home because of design, room lay out and ambiance and not have a thing to do with condition and effective age is immaterial. That is way I treat age and condition as two completely separate items that are considered in the market. When a buyer is trying to decide between two houses, they are thinking on #1 I will need to put a new roof on in less than five years but interior is in excellent shape, #2 has a new roof but interior will need paint, flooring, cabinets, counter top, etc they are not considering "effective age", they are considering condition. The reaction to the difference in chronological age would be because the 1950 house has a good traffic flow where the 1905 house has no hallways, you have to walk through several rooms to get to one specific room, etc, etc. Again those view points of the buyer have nothing to do with effective age. I never put an effective age in the sales comparison grid because in that part of the report I am reporting buyer's reaction to various items. If the original year of construction on the front is 1900 but the effective age on the front is 20-30 years--then the condition in the sales comparison grid would be noted as good or above average. Detailed explanation would be in my report of why.

 

[Don Clark]

B) I agree Jo Ann,

I see reports where appraisers estimate the effective age of the comps without ever having gone inside them. That is insane. That is akin to looking at a car and saying it runs good, then getting in only to discover it has no engine :lol: I have appraised houses where the original portion was built in the early 1800's, another part in the early 1900's, and another part in the 1950's. Beats the hell out of me what the effective age would be. But, after inspection, I know the condition of the property. BTW, the original owner of the house is buried next to the garage, tombstone very visible

 

[CANative]

So, are you saying that the original owner is fully depreciated?

I don't try to put effective age on the comparables either. Isn't estimating effective age a tool for arriving at an opinion of depreciation in the cost approach?

I could probably support my adjustments to the comparables for condition because I use the condition rating indicators in the depreciation section of Marshall & Swift as a guide for making the determination and then using an estimated cost to bring the condition up to or down to the subject's observed condition. My cost estimate is tempered by my estimate of the market reaction to that cost and further adjusted by the individual market or even the neighborhood.

Not science, but it's defensible.

(if anyone reading this does not have a Marshall & Swift and wants to read the condition ratings and their descriptions, just post and I'll put them into this thread.)

 

[Elliott]

Greg & Don,
Estimating effective age is "insane"?
Marshall & Swift's deprciation page is a good way of
estimating depreciation?

I don't think so. I like to estimate effective age
based on my experience and if I thought pulling a number
out of a book could tell me depreciation, I'd also think
AVMs were the greatest invention since sliced bread.

elliott

 

[CANative]

There are a bunch of formula's and methods in Section E.

I was just talking about a published set of descriptions of condition that could be used as an objective guide for classifying the condition of the subject and the comparables.

 

[dblbogey]

In my county, when they don't know when it was built, they put 1960 as the year built since that's when the most houses were built back then. The problem, I don't which ones were REALLY built in 1960!

Effective age is certainly the area to adjust for age differences.

 

[Mister Ed]

I guess you could do it like a tree...

Saw it down and count the rings...

Sorry, that was the first thought that popped into my head when I saw it. I guess I am having "Twisted mind syndrome" today.

I have not run into that problem here as the tax records have pretty good detail.

-ed-

 

[Mike Boyd]

Elliott and Rick......how do you determine the effective age of the comp if you have not inspected the interior? You cannot make an adjustment based on an assumption. Certainly, you can develope an opinion of the effective age of the subject, if you inspected the interior. However, rountine maintenace such as paint, or a new roof when needed, would not, by themselves, change the effective age. Major updating such as cabinets, plumbing fixtures, insulation....attic and floor, double glazed windows, taking laundry facilities out of the basement and putting them in a more convenient location, modifying room size and floor plan, a modern heating/cooling system along with a new roof and paint wouled be grounds for a younger effective age.