Effective Age Quiz

[Blue1]

Well, not REALLY a quiz just some input if y'all don't mind.....

SFR built in 1948.

1) 1 year old roof
2) Original exterior siding but, newly painted
3) Original tile in kitchen counters, good condition.
4) 3 year old flooring
5) All new vinyl, dual pane sliding windows
6) Upgraded bath

What's the effective age?

Thanks......

 

[Willie]

:rofl: 10 years B)

 

[The Bob]

There's no way to tell from the information you've given. Effective age has as much to do with supply/demand forces in the neighborhood as it does with physical condition. I think this is one area most appraisers could use more training.

 

[John SRA]

Blue,

Your question cannot be answered with the data provided. You have supplied only physical information. Properly applied, effective age is an economic concept that includes physical factors. It is not simply a matter of physical condition.

Two properties may be virtually idenical but have very different effective ages because of relevant market influences.

Best Wishes

JC

 

[Ross (CO)]

Kind of.....doesn't matter what we think, for we have not seen the house, and you have. The call is all your's, and that's what is nice about that field in the report form. Difficult for someone to say you're wrong. As actual age of the home goes up (by the decade) it is certain that renewals and replacements of key aspects will happen due to normal weathering or wear-and-tear, but the slate is not always cleared with the home returning to some single-digit age. It is however quite logical that a range of effective age could be given and one might easily say something like "15-20yrs." Some aspects are ageless, like the 55-yr. old tile counters in the kitchen and still being "good". Vinyl windows too. If they are of reasonable quality it would not matter if they'd been in for 10 years or 10 weeks, the important fact is that they are there. Of course, what if your house had single pane aluminum frame windows from 1948 ? No two houses are the same....just adds to the fun.

 

[Pamela Crowley (Florida)]

I'm going to go at this in a different way.

If for the cost approach, I'll up the total life expectancy rather than play too much with the effective age. For a house that has had those items redone, keeping in mind that most of those are mainly basic maintenance items and would have to be done just to keep it in 'average' condition, I might give it an effective age of 45+/- with a total life expectancy of maybe 80. I would have to see it and the immediate neighborhood to figure that out.

Effective age, to me, includes ceiling height, layout/floorplan, etc. Unless the house has had major updates so that it looks more like a newer house, I don't deal in effective age on the sales comparison at all. (For the most part, I think of that as a number hitter ploy). The rest of that stuff would go under condition and be explained.

JMHO

 

[Restrain]

The simple answer is that it is extracted from the market.

If a home in your market will last, say, 80 years with normal maintenance but no significant repairs or updating, at which time it will give little or no value to the overall property. That gives an overall life expectancy of a home at 80 years.

You have a house that has similar updating. It sold for $80,000, with a site value of $20,000, so you have an $60,000 contributory value for the improvements. The overall cost new is estimated at $80,000. 60/80= 3/4 x 80 years = 60 years remaining or an effective age of 20 years.

Just a simple example.

Depreciation, effective ages, etc is best obtained from the market.

Roger

 

[Don Clark]

B) You could always use the formula one of my students told me about when I taught a CE Class for McKissock in 1994. We were having a discussion about effective age, used several formulas, some common sense scenarios.....then his hand shot up...."Naw sir, that ain't the way we do it here". Oh, says I! And how duz we do do it her? " 20 years he sez". 20 years says I? "Yep, 20 years on all appraisals". Gee, life sure is simple in his world.

Also, had a student in a pre-license course in 1990 that had been in business for 20 years as an appraiser. We were discussing GMRM's. After a few moments he spoke up...."Oh, that's how you do it". Of course I had to ask, well, how do you do it? I"I just use 115 he sad".

Ah, this licensing stuff sure has complicated things.


Don

 

[Thomas N. Morgan]

The effective age is the same as the actual age: 55 years. I do not use the effective age concept in my work. In the case cited, I would deal with age by simply saying YEAR BUILT: xxxx My approach is much like Pam's.

There is no formula for deriving effective age that does not assume that at least one of the quanities is a known quantity.

The literature is full of discussions about effective age. There not much agreement on what it is. No one seems to know how and when it came into use in appraising.

It is a convenient concept for achieving the desired result.

The other nice thing about it is that no one can prove your effective age is incorrect.

Regards,

Tom

 

[wyecoyote]

I will take a shot at this. See how much I get flamed for the response. If you are talking about the effective age for the sales comparison approach. Then I would consider how long a house will last in your area. Here I use about 65. Then Consider 1 remodeling and updating to the house like you supplied. The newer some of the items are the lower the effective age for the cost approach.

As far as the sales comparison grid goes. I like doing it 90% of the time like this. Will use straight age and consideration of the long lived items (drywall, stud walls, foundation, windows, plumbing, & wiring). Then use condition for the short lived items (floor covering, paint, roof covering, appliances, countertops, etc..). Thypically the only time I use effective age in the sales comparison grid is when dealing with an older house that has been extensively remodeled then I consider effective age in the grid.

This way has worked well for me and been away to seperate the long lived items from the short lived items.