C5 Condition Rating

[residentialguy]

I have to respectfully disagree. C1 maybe C2 could be considered absolute. The rest are up to some interpretation and opinion. C6 leaves a little less room for opinion. But still needs some opinion based conclusions. C3,4 &5 each have quite a bit of room for interpretation and/or opinion. The notes after each definition pretty much confirms it.

Notrav is correct. The ratings are an absolute scale...meaning they are not relative to the neighborhood, etc. A C4 on the west coast Bev Hills is the same exact condition as if it were in the slums of New York. While a C6 may be normal condition in the neighborhood, it does not mean it's a average condition home...it's still a C6

 

[Dublin ohio]

Notrav is correct. The ratings are an absolute scale...meaning they are not relative to the neighborhood, etc. A C4 on the west coast Bev Hills is the same exact condition as if it were in the slums of New York. While a C6 may be normal condition in the neighborhood, it does not mean it's a average condition home...it's still a C6

And where did I say or even infer relative to the neighborhood. A C1 by definition is absolute. New and not previously occupied. Has nothing to do with being relative to neighborhood. New is new. A C3 does not have a straight forward definition. For instance it says "Some components, but not every major building component may have been updated or recently rehabilitated". Words like some, may and recently do not sound absolute to me. What is recent? 1 year, 3 years, 5 years?. Who determines what recent means when doing the appraisal. Seems to me it is based on the OPINION of the appraiser. Did not know that opinions were absolute (except to the person with the opinion)

 

[residentialguy]

And where did I say or even infer relative to the neighborhood. A C1 by definition is absolute. New and not previously occupied. Has nothing to do with being relative to neighborhood. New is new. A C3 does not have a straight forward definition. For instance it says "Some components, but not every major building component may have been updated or recently rehabilitated". Words like some, may and recently do not sound absolute to me. What is recent? 1 year, 3 years, 5 years?. Who determines what recent means when doing the appraisal. Seems to me it is based on the OPINION of the appraiser. Did not know that opinions were absolute (except to the person with the opinion)

That's what is meant by relative vs absolute. If it is relative, that means it is compared to something else. The Condition and Quality ratings must be based on a holistic, or absolute, view of the property and any improvements. The appraiser must consider all the improvements to determine an overall Condition and Quality rating, selecting the rating that best reflects the property as a whole and in its entirety, rated on its own merits. This requirement also applies to the comparable sales. Obviously, one has an opinion on what a property falls under, but the bar to which they measure the property to is absolute and is not relative to anything.

UAD Append D states
"The condition rating for the subject property must describe the physical condition of the property as-of the effective date of the appraisal and the physical condition of each comparable property as-of the date of sale for the comparable properties on an absolute basis, not on a relative basis or how the properties relate to other properties in the neighborhood."

 

[Carnivore]

Time to time I read through the C ratings and Q ratings just to freshen what I already know. I agree the C Ratings are absolute. The 'C' definition uses the word 'some' which is the sticking point(maybe). Even though I know it means an unspecified amount or number, it seems that there are 'some' appraisers who interpret it(wrongly) meaning more than one. The way to look at this is one or more. While I sat here I tried to think of a physical condition that might help some appraisers. So here goes;

Hopefully this will clear the air about the misuse of the word relative and significant.

You finish your exterior inspection and don't see anything that alarms you other than maybe a little spot painting. Interior inspection is going well and your almost finished with interior inspection and at this point you have in your mind the Subject is a Q4 and condition is C4. You walk into bedroom and you see a hole in ceiling as you look up through hole you see daylight coming through the ceiling from the roof system. Your guess is a tree limb pinch a hole all the way through the roof into attic and also the bedroom ceiling. You go back outside and realize the hole in the roof is hidden from view for anyone walking around exterior.

That one item/defect makes the subject C5. NOTE: Some, many or almost all of you could/should make the argument that my example is actually C6.

Let me go further so it clear in one mind. Change the subject to a New Construction, never been lived in. It has one defect the hole in the roof system and ceiling. That's it, nothing else. Rating: Q1 / C5.

I hope I did not insult, demean or otherwise ridicule anyone. I admit I am not the sharpest knife in the drawer.

Please help me out. FIRE Away make me look like a Fool. Where or How am I wrong about this response.

 

[J Grant]

In your example of the one hole in the roof, it would make it c5- which is why many lenders require making appraisal for a c5 or c6 property subject to repair ( or inspection) to reach C4 . One hole in the roof in one room probably would not make a property into a C 6 ( severe enough to affect safety, soundness integrity of the dwelling- though if not repaired in a timely manor and water keeps coming in it could lead to c 6.

The ratings are absolute, but the condition and defects or upgrades of a property to qualify for each condition rating has to be observed and noted by the appraiser.

 

[J Grant]

I don't think you can go to C4. I do a ton of REO work and it's really difficult to go from C5 to C4, since the needed repairs would be to renovate to like new or good condition. I don't know your market, but 9 times out of 10 in my market the H&B use would be to renovate to C2/C3.

Correcting a defect to satisfy a condition rating is not the same as getting maximum value for a property to flip . Bringing a C 5 of c 6 into c 4 means repairing the defects only, not upgrading the rest of the house . A new roof can be put on but the c4 older but functioning kitchen, bath and floor left intact ( for example)

 

[timd354]

In your example of the one hole in the roof, it would make it c5- which is why many lenders require making appraisal for a c5 or c6 property subject to repair ( or inspection) to reach C4 . One hole in the roof in one room probably would not make a property into a C 6 ( severe enough to affect safety, soundness integrity of the dwelling- though if not repaired in a timely manor and water keeps coming in it could lead to c 6.

The ratings are absolute, but the condition and defects or upgrades of a property to qualify for each condition rating has to be observed and noted by the appraiser.

A hole in the roof (even if only one hole) negatively affects soundness and habitability and thus renders the property in C6 condition "as-is". However, I would think that such a property would typically be appraised subject to repair of the roof with the resulting property condition being something other than C6, unless there are other issues with the property

 

[Carnivore]

In your example of the one hole in the roof, it would make it c5- which is why many lenders require making appraisal for a c5 or c6 property subject to repair ( or inspection) to reach C4 . One hole in the roof in one room probably would not make a property into a C 6 ( severe enough to affect safety, soundness integrity of the dwelling- though if not repaired in a timely manor and water keeps coming in it could lead to c 6.

The ratings are absolute, but the condition and defects or upgrades of a property to qualify for each condition rating has to be observed and noted by the appraiser.

I am assuming you agree with me...because I agree with you 100% FTR I only brought up C6 to illustrate their is a difference. If I go back to the OP it reads like he did not in detail state in his original report the actual reason for the C5 and the remedy. ....He/she probably should have sent the report in Subject to repair, unless the Client wanted an AS-IS. In either situation the OP was obligated to report what he observed/discovered.

Just a side not; the addition of multi-layered system; Lender, AMC(layers within AMC), Appraiser complicates the issue.

 

[Carnivore]

A hole in the roof (even if only one hole) negatively affects soundness and habitability and thus renders the property in C6 condition "as-is". However, I would think that such a property would typically be appraised subject to repair of the roof with the resulting property condition being something other than C6, unless there are other issues with the property

Thank You. I was looking for that threshold where it crossed from C5 to C6. The last sentence of C6 is the one that throws me off occasionally. That's why I made the statement to argue with reason C5 to C6.

 

[TJSum]

C6 is pretty straight forward if any issue puts the safety of the occupants or dwelling itself in potential danger. A hole in the roof would qualify as putting the soundness of the structure in danger, hence C6. As to the original post and pictures, ongoing interior water damage qualifies as C6 as it threatens the soundness of the home.