C1 or C2?

[Vermonter]

New construction, owner moved in last week and is refying out of construction loan. Under condition, I gave it a C1.

UW quoted the C1 definition-
"The improvements have been recently constructed and have not been previously occupied" and says it can't be C1.

I disagree, mainly due to the other part of the definition- "The entire structure and all components are new and the dwelling features no physical depreciation."

I was planning to just comment in the addendum and leave it a C1....or I guess you could make it a C2 and make no adjustments to the C1 comparables...but that just seems wrong to me.

What say you?

 

[Michigan CG]

New construction, owner moved in last week and is refying out of construction loan. Under condition, I gave it a C1.

UW quoted the C1 definition-
"The improvements have been recently constructed and have not been previously occupied" and says it can't be C1.

No one PREVIOUSLY has lived in the home. UW is an idiot. Condition does not change the first day someone moves into a home.

 

[EddieB]

Common sense says C1, but when has that mattered in the Brave New World of Appraising...

Remember the article from this summer from one of the "architects" of Fannies Q&C ratings that stated that C3 was the new average and claimed that his 12/14 year old house with no updates should be a C2....

 

[residentialguy]

No one PREVIOUSLY has lived in the home. UW is an idiot. Condition does not change the first day someone moves into a home.

What are you talking about? The buyer now owns it and has moved in. It IS previously owned. Technically, it's C2 and the UW is correct. That doesn't mean it's worth less. That's a market question.

I agree that it doesn't sound right....welcome to Wally World UAD

 

[J Grant]

As soon as a buyer moves in, even if they only lived there a day, the house has been (previously) occupied. Odd language but what language could they use.. A house could be occupied, then the owners move out, leaving it vacant but previously occupied.

Now of course condition is not going to change much if at all from very recent occupancy. If appraiser does not adjust for C1 vs C2 because of that, explain why.

Remember though we are appraising for market reaction to condition. Of course the components are not going to be affected by a week or month or 3 months of occupancy. Still, the home has been lived in...how does the market view that? Even a bit of wear, scuff marks from moving /tread on carpet can make a subtle difference. Sometimes the buyers won't care, other times research shows they do.

as with anything, market specific...appraiser has to research it, ask RE agents, look at new homes sold after very brief occupancy etc. I dislike new construction because of these kinds of issues makes me sweat doing them!

 

[Mr Rex]

A C1 house that has been lived in for less than a week is C2. That ought to illustrate the strength of the UAD/UCDP/Collateral Underwriter review program Fannie is touting as the next best thing since sliced bread...woohoo

 

[444nutman]

Sorry but it is C2.

 

[J Grant]

Fannie's Alice in Wonderland through the looking glass upside down world...

 

[Mr Rex]

Sorry but it is C2.

What if they haven't finished moving in and haven't slept there yet?

 

[J Grant]

Then it is C1.5