C1 or C2

[sailorboy]

I recently appraised a high rise condominium where the building was completed in 2007 with the subject unit interior finished in 2013. It has never been occupied so I have the decision to make as to how to classify condition. I chose C1 for this instance. My reasoning was that the overall shell of the building had nothing to do with the interior, which was arguably C1 condition. The issue may be that since the shell was about 8 years old, the HOA would most likely have repairs and replacements that would be sooner than that of a completely new building. In this case, all comparables were in a similar situation where the buildings were built several years ago and the unit interiors completed when they had a purchase contract. No condition adjustments but I may have an issue with my condition rating with FNMA. Anyone else run into this? I was torn between the C1 and C2 ratings and maybe should have gone with the C2. Explained my reasoning in the report.

 

[Pam Wyant]

(as to not have the property sit vacant).

Clearly C2. The seller/builder won't care as long as the appraisal hits the sale price. Of course, that may be the real problem?

 

[J Grant]

That is a good question on a condo....imo, since the building was relatively recently built and unit never occupied C 1 is okay

 

[Peter LeQuire]

If it's occupied, the C2 is appropriate. The necessity for and adjustment for a C1 comp is for the appraiser to determine. I've seen new/C1/not previously houses that were in condition inferior to a new house that had been moved into. Most happy owners of new houses clean the thing - particularly kitchen and baths - before occupying the house, regardless of the builder final clean up. I've seen houses which the purchasers bought with the yard seeded and strawed, and the weekend after settling the furniture had sodded part of all of the yard.

 

[residentialguy]

I'd put C1.5

 

[notasalesman]

I had a similar property last year, the homeowners were in the process of moving in, no window treatments, still had longtime house in same suburb. I decided that there is a difference between previously occupied and currently occupied. I believe the rule as written is flawed (imagine that). Anyway the review appraiser had to take water as the rule states previously and not currently. Call it a C1 unless someone has damaged it.

 

[hastalavista]

Since the C1 condition rating can only be used once (if the appraisal is as-is), maybe the appraiser should ask, "Has this property been appraised previously" before assigning a rating?


And, yes, that was tongue-in-cheek.
Not so tongue-in-cheek is this: You would think that as long as the appraiser explained her/his rationale, there wouldn't be so much angst over calling it C1 or C2. But there is.