Deferred maintenance

[Laura Tisinai]

What does deferred maintenance mean to you? I am getting different reponses from all sorts of people, other than appraisers, of course. So I thought I would go right to the experts!!

Thanks in advance,
Laura Tisinai

 

[Colorado Guy]

Go to the source:

The Dictionary of Real Estate Appraisal - THIRD EDITION

Deffered Maintenance - Curable, physical deterioration that should be corrected immediately, although work has not commenced; denotes the need for immediate expenditures, but does not necessarily suggest inadequate maintenance in the past.

Any I used the work deffered maintenance in an appraisal I also comment on the effect on value, if any.

 

[Scott R Marshall]

Hello Laura,

I like Bob's definition. Myself personally I consider it anything beyond what would be considered normal wear and tear for a home of its age or anything that you yourself believe needs repair due to lack of maintenance. Going into a 100 year old home (if there are many homes like that in your area) you would expect more wear and tear than in a 5 year old home. A 100 year old home may have items that need immediate attention due to lack of upkeep, maintenance, or just general wear and tear, while some items you would expect to see in a 100 year old home with typical upkeep and maintenance. In a 5 year old home you would expect to see less signs of wear and tear and any items that appeared excessively worn out you might want to consider deferred maintenance, especially if your comparables are of similar age. This is just the way I handle it, on a case by case basis.

 

[Marcia Langley]

Laura,


I think it helps to sort deferred maintenance into the categories that coincide with Fannie guidelines and the check boxes on the forms.

1. Minor items of deferred maintence that do not rise to the level of requiring repair and can be accounted for in an 'as is' market value.

2. Items that need repair before closing and are associated with the third check box in the reconcilliation section (hypothetical condition).

3. Items you may not be qualified to determine that would be associated with the fourth check box (extraordinary assumption) and require an inspection by other experts.

These are all deferred or potential problems but not all require repair.

 

[George Hatch]

I generally stick to commenting about "condition", and I usually try to avoid commenting about "maintenance". The former is about what is, which I think is what's important in an appraisal; the latter is about how it got that way, which I think is just about irrelevant.

 

[Marcia Langley]

Good point.

 

[Lobo Fan]

To me deferred maintenance are issues that would make the property below "average". Examples would be damaged wainscoting, tired carpets, holes in the walls, accumulated debris, or overgrown landscaping. The list could go on and on but you get the point. It is when you have to hit it with a cost to cure.

Kinda like ****ography. I can't define it, but I know it when I see it.