Condition- C4

[VALU8]

Before I ask I'll throw it out there, I'm new to the profession and still learning. I generally know how to handle things well enough to not ruffle feathers with the lenders (Follow the motions), but I really wanna learn why things are the way they are.

One thing I've noticed : Does anyone else feel that there should be more specific condition ratings? I do go through the definitions page and read it very carefully...but I find sometimes there is a bit of wiggle room in the definitions.

I find myself wishing there were C4+ C4 and C4-.

One house that had a little old lady living in it that has everything styled from the 80's that was well taken care of and in good condition falls under C4, while a house built in 2010 that is still current in fashion and is in good condition, but hasn't had any recent maintenance also falls under C4. At the same time a house that doesn't quite meet C5, but is in rough shape, also falls under C4.

How do you account for this "wiggle room" within the conditions? Does anyone give separate adjustments from comp to comp? Or is that a bad idea?

Same thing with C3- houses that were simply given "new lipstick": new carpet, flooring and countertops can fall under the definition of C3 while at the same time houses with more extensive, but not enough to really qualify as C2, (new HVAC, Roof, and remodeling) also get C3.

Side note: I've also noticed C6 is almost never used- C5, the banks think is somehow damning and want you to do a lot of extra work like take photos of whatever is "wrong" (ie missing bathroom vanity) tell them how much it would take to repair it. Do you guys often use C5?

Thanks

 

[Carnivore]

I find myself wishing there were C4+ C4 and C4-.

One house that had a little old lady living in it that has everything styled from the 80's that was well taken care of and in good condition falls under C4, while a house built in 2010 that is still current in fashion and is in good condition, but hasn't had any recent maintenance also falls under C4. At the same time a house that doesn't quite meet C5, but is in rough shape, also falls under C4.

How do you account for this "wiggle room" within the conditions? Does anyone give separate adjustments from comp to comp? Or is that a bad idea?

Same thing with C3- houses that were simply given "new lipstick": new carpet, flooring and countertops can fall under the definition of C3 while at the same time houses with more extensive, but not enough to really qualify as C2, (new HVAC, Roof, and remodeling) also get C3.

Side note: I've also noticed C6 is almost never used- C5, the banks think is somehow damning and want you to do a lot of extra work like take photos of whatever is "wrong" (ie missing bathroom vanity) tell them how much it would take to repair it. Do you guys often use C5?

Thanks

So you answered your own question a little bit. In your reconciliation you explain the Qualitative differences between the subject and the comparable.

So this is what I do almost always. I make all quantitative adjustments first, i.e. Date of sale - Time adjustment ; SPLP ratio adjustment ; Site Adjustment
Major feature adjustment i,e subject 2 stall garage/comp 1 stall garage, etc you get the idea here

After all the quantitative adjustments I then make qualitative comments of the difference between the comp and the subject sort of like the bolded comments you made above in the reconciliation.

My way is not perfect but it sure helps separate the wheat from the chaff

As soon as the really smart guys/gals wake up you will then get better advice than mine

 

[VALU8]

So you answered your own question a little bit. In your reconciliation you explain the Qualitative differences between the subject and the comparable.

So this is what I do almost always. I make all quantitative adjustments first, i.e. Date of sale - Time adjustment ; SPLP ratio adjustment ; Site Adjustment
Major feature adjustment i,e subject 2 stall garage/comp 1 stall garage, etc you get the idea here

After all the quantitative adjustments I then make qualitative comments of the difference between the comp and the subject sort of like the bolded comments you made above in the reconciliation.

My way is not perfect but it sure helps separate the wheat from the chaff

As soon as the really smart guys/gals wake up you will then get better advice than mine

Haha Thank you, Yeah I am a bit of a night owl- I hadn't realized I posted so late until you pointed it out.

So you make adjustments based on the comp, not the condition you gave it (IE all C3's get a -$15,000 adjustment from C4)

 

[jay trotta]

Before I ask I'll throw it out there, I'm new to the profession and still learning. I generally know how to handle things well enough to not ruffle feathers with the lenders (Follow the motions), but I really wanna learn why things are the way they are.

One thing I've noticed : Does anyone else feel that there should be more specific condition ratings? I do go through the definitions page and read it very carefully...but I find sometimes there is a bit of wiggle room in the definitions.

I find myself wishing there were C4+ C4 and C4-.

One house that had a little old lady living in it that has everything styled from the 80's that was well taken care of and in good condition falls under C4, while a house built in 2010 that is still current in fashion and is in good condition, but hasn't had any recent maintenance also falls under C4. At the same time a house that doesn't quite meet C5, but is in rough shape, also falls under C4.

How do you account for this "wiggle room" within the conditions? Does anyone give separate adjustments from comp to comp? Or is that a bad idea?

Same thing with C3- houses that were simply given "new lipstick": new carpet, flooring and countertops can fall under the definition of C3 while at the same time houses with more extensive, but not enough to really qualify as C2, (new HVAC, Roof, and remodeling) also get C3.

Side note: I've also noticed C6 is almost never used- C5, the banks think is somehow damning and want you to do a lot of extra work like take photos of whatever is "wrong" (ie missing bathroom vanity) tell them how much it would take to repair it. Do you guys often use C5?

Thanks

My bold, this trade requires one to continually learn (way more so since 2007-08 implosion) there are way to many fingers in the pie; expand your research, talk with agents to get a feel for market reactions via public input. The C3 / C4 etc input is for the computer only and IMO limits your ability for input. Prewritten definitions are not reality in some instances.
Good Luck

 

[Carnivore]

Haha Thank you, Yeah I am a bit of a night owl- I hadn't realized I posted so late until you pointed it out.

So you make adjustments based on the comp, not the condition you gave it (IE all C3's get a -$15,000 adjustment from C4)

Not really! Exclude C & Q initially. In other words lets do it this way, narrow down all comparable to the most similar as possible. That's a typical and logical practice. Obviously if you have three model matches except for condition and quality then its fairly easy. Its when you don't have three model matches that it gets more difficult. This is where I start separating out all the easier extractable adjustments. i.e time, GLA, car storage, bath count., site etc (not necessarily in that order)

C & Q adjustments can get rather subjective. That is when qualitative narration of the differences in the final reconciliation can be your friend and frankly the only way to weight the comparable.

Michigan CG put up an example of his work on how he reconciled all the comparable on quality features.differences with narration instead of dollar amounts. Simply he used all zero's for adjustments and floated around by weighting.

I am not good at explaining this method in writing.

Like I said some really smart appraisers will chime in here soon and clear up what I am trying to say.

 

[residentialguy]

The ratings are general, just as the old average conditions. The ratings are used to give the reader a general idea of the properties. You still can adjust for variances of quality or conditions with properties with the same ratings.
Personally, I wish they would use Superior, Similar, & Inferior, since we are comparing them to the subject. Alas...but if we did that, the data that they steal wouldn't be meaningful to use against us.

 

[hastalavista]

Personally, I wish they would use Superior, Similar, & Inferior, since we are comparing them to the subject. Alas...but if we did that, the data that they steal wouldn't be meaningful to use against use.

That would be a better solution, IMO.
I would even say that rating the subject by one of the definitions is fine (that makes some sense). Then ranking the comparables against the subject's C rating with whatever adjustments are appropriate eliminates all this confusion and worry about calling the comparable a C4/C3 or wondering if someone is going to question a dollar adjustment for the same C rating.

 

[Deleted member 130081]

That would be a better solution, IMO.
I would even say that rating the subject by one of the definitions is fine (that makes some sense). Then ranking the comparables against the subject's C rating with whatever adjustments are appropriate eliminates all this confusion and worry about calling the comparable a C4/C3 or wondering if someone is going to question a dollar adjustment for the same C rating.

1000 Dittos.

...now if there were only an organization of appraisers who had some clout, who FNMA could consult and receive such a fine suggestion from...lol

...and then again, as RES has pointed out, there are ulterior motives in play here, so your logical solution aint gonna happen.

 

[Deleted member 130081]

Before I ask I'll throw it out there, I'm new to the profession and still learning. I generally know how to handle things well enough to not ruffle feathers with the lenders (Follow the motions), but I really wanna learn why things are the way they are.

One thing I've noticed : Does anyone else feel that there should be more specific condition ratings? I do go through the definitions page and read it very carefully...but I find sometimes there is a bit of wiggle room in the definitions.

I find myself wishing there were C4+ C4 and C4-.

One house that had a little old lady living in it that has everything styled from the 80's that was well taken care of and in good condition falls under C4, while a house built in 2010 that is still current in fashion and is in good condition, but hasn't had any recent maintenance also falls under C4. At the same time a house that doesn't quite meet C5, but is in rough shape, also falls under C4.

How do you account for this "wiggle room" within the conditions? Does anyone give separate adjustments from comp to comp? Or is that a bad idea?

Same thing with C3- houses that were simply given "new lipstick": new carpet, flooring and countertops can fall under the definition of C3 while at the same time houses with more extensive, but not enough to really qualify as C2, (new HVAC, Roof, and remodeling) also get C3.

Side note: I've also noticed C6 is almost never used- C5, the banks think is somehow damning and want you to do a lot of extra work like take photos of whatever is "wrong" (ie missing bathroom vanity) tell them how much it would take to repair it. Do you guys often use C5?

Thanks

While I am often long-winded, the other posters have done a fine job of explaining the details, so I'll (try) to be short.

The C and Q ratings are not entirely inclusive and you are 100% right, there is room to land in the middle. They are however, IMO, more descriptive and less ambiguous than the old methods of average, superior, etc. While the old way worked too, I believe this new way is better, because it is in fact a tangible definition of what the property is.

It is ok to make an adjustment for the same rating, but you will need to explain it. This is better than trying to fudge a rating, so your grid looks prettier and the reviewers don't get ruffled. It can be tempting to do that, but don't - it's misleading.

I will often explain in the comments that the property is a mix of ratings, then explain that it is most appropriately rated at a specific rating. It is not uncommon here to have a home that has elements of Q2, Q3 and Q4, but usually, the property is best rated as only one of these. Explaining this also helps to ease the proud homeowner, who is super proud of their high-end remodeled bathroom, while over-looking their outdated kitchen.

 

[J Grant]

One house that had a little old lady living in it that has everything styled from the 80's that was well taken care of and in good condition falls under C4

Okay, sounds like C 4

, while a house built in 2010 that is still current in fashion and is in good condition, but hasn't had any recent maintenance also falls under C4.

No! This is a C3 . Read the entire definition, it references life cyle in replacement of components. You just said the 2010 build house is in good condition, so it is well maintained. But it has no updates in 10 years, but its components and appliances etc are 10 years old , still recent enough and in mid life cycle to be C3. The C 4 is for components nearing the END of their life cycle ( 20-25 + years depending )e

At the same time a house that doesn't quite meet C5, but is in rough shape, also falls under C4.

If it;s in "rough shape" and needs some repair shows enough deferred maintenance for you to call it that, it probably is a C 5. Sometimes it is borderline , in that case see below.

Yes there is some "wiggle room" in the C ratings comment on them and any comp with same C rating as subject to the subject for condition or varainces of comp and subject with same C rating (if same C rating can line item the difference /adjustment as upgrades/updates )

Your problem is not about wiggle room, it is imo lack of holistic understanding of the condition adjustments or perhaps lack of experience inspecting properties. I see lack of understanding in the above., which I addressed