At what point does C2 got C3

[challenger]

Condition rating C2 Dwellings that are almost new. Just figuring typical wear and tear is this 5 years 10 years and then it goes to C4. There doesn't seem to be a natural progression from one rating to the next. I have a 7 year old house in average condition. With a couple of comps that are new C1's. Very limited comps in the market. If I had all comps that were between 5-10 years of age I would rate them a C4 all the way across and adjust for any differences. Very rare a 10 year old house has been renovated. Wondering how others are handling this.

 

[Deleted member 128537]

This is how I do it:
1) C1- new
2) C2- 1 to 5 year effective age. (home is in nearly new condition)
3) C3- 5-15 year effective age. (little but some wear and tear; very well maintained)
4) C4- 15 to 30 year effective age. (more significant wear and tear and components are dated).
5) C5- 30-40 year effective age.some things need repair because they are not adequate; and may be at the end of economic life.
6) C6-40-50 year effective age. Many things need repair.

Note there is some overlap. But if most of the components in a home are like new I say C2. If most are in good condition, but not new then C3. If 1/3 of the components in a home are just in adequate condition (show wear and tear, but are functional) then I say C4.

This is a judgment call and every appraiser will see it different. The problem arises in a home that is dated yet is well maintained. I tend to say a dated home is a C4 even though well maintained since condition is a matter of effective age. But again I know some appraisers that do it differently.

The biggest issue is for you to be consistent within your own reporting.

 

[challenger]

I hate this system. It's just not very clear although that is what they are trying to achieve with it. I understand FNMA is going to track the ratings and compare to other appraisals and your previous and they are looking for consistency. But it's a moving target and everyone sees it a little different. What use to be fairly simple and easy to understand is vague. I can't wait to someone calls me and says well everyone else is calling a C4 or something.
Thanks for your advice.

 

[timd354]

Condition rating C2 Dwellings that are almost new. Just figuring typical wear and tear is this 5 years 10 years and then it goes to C4. There doesn't seem to be a natural progression from one rating to the next. I have a 7 year old house in average condition. With a couple of comps that are new C1's. Very limited comps in the market. If I had all comps that were between 5-10 years of age I would rate them a C4 all the way across and adjust for any differences. Very rare a 10 year old house has been renovated. Wondering how others are handling this.

You post indicates that you are going about this the wrong way. The condition & quality ratings for the subject property and each individual comp are not dependent on the condition of other properties, including other comps. It does not matter if you have comps that are new homes in C1 condition, the subject property should be rated as whatever rating definition it most closely meets.

Here is the current UAD C2 definition:
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.

I highly doubt that a typical 7 year house that state is in average condition would meet the above definition...a seven year old property is not almost or
relatively new.

I suggest that you carefully read the UAD quality and condition ratings and read the numerous materials that Fannie & Freddie have published on the UAD quality & condition ratings which consistently say that the UAD condition and quality ratings are not relative ratings.

 

[challenger]

So at what age would you consider a house to be C4 two years or more? One year?

 

[J Grant]

?? C4, imo is a house typically around 15 years or older...though a newer house, if built of original poor quality and very used hard could be c4 more quickly.

In my market area, I usually find I am not putting C4 for a house till it reaches around 20 years or older, but there is no hard of fast rule. It depends how much an owner has replaced, what they replaced, or if they did no replacements in a home. Read the descriptions, they literally tell you what to look for. The advice from Fannie is a holistic look at the overall picture of the home... putting in one new appliance in an otherwise C4 home is not enough to make it a C3, for example.

Use narrative to explain a bit why you arrived at your rating.

 

[sputnam]

C2, C3, C4, C5, & C6 aren't about the age of the improvements. The ratings are about condition. I have seen 100 year old dwellings that were C2 & C3. And I've seen 5 year old dwellings that needed renovation... with a bulldozer.

 

[Thomas Fiehler]

Challenger: The condition rating is based on condition and not age.

 

[J Grant]

I agree. However, in the avg maintained house, there is often a correlation... the OP was asking for help on the matter so I gave some "age appropriate " examples...note I also stated that it depends what the owner replaced in the house, the holistic whole condition, etc.

As most things in appraising, it is a judgment call.

 

[challenger]

I understand it's based on condition. C3 and C4 and C2 when renovated make sense. But a house that is lived in for 5 years, carpets vacumed on regular basis, has clean owners that just keep it clean. There is no need to replace a stove or dishwasher or ac condensor unit. Is it a C2 or C4. By defination it appears it ought to be a C4. But on the other hand it looks like new house. I know that Marshall and Swift has a deprecitation guide or effective age guide for appliances and ac systems, but if most items are just maintained according to manufactures recommendation they will last 20 to 30 years. I have seen stove 35 to 40 years old that work fine. Not energy efficient. Heat and air systems the same. And I realize a cheap house used hard after 3-5 years can be a C4 or C5. My real issue is from a C2 to a C4. I a house is 5 years old and maintained properly it could be either according to the definition. Can it not?