Effective Age

[redfish]

FHA appraisal of a property built in the 1940's. Original foundation, original plumbing, original electrical, original walls/exterior and interior plaster, possible asbestoes siding, original windows... and the list goes on. I am of the school of thought that the main construcution components of a structure are the most pertinent in determining effective age. If the foundation is 65 years old, the windows are 65, plumbing/electrical 65 yrs old (everything functioning)..... with minor cosmetic updating over the years... The effective age of the subject property is near its actual age. Any cosmetic updating does not affect the effective age, but rather the marketability.

Just looking for thoughts on effective age or apprasiers with a rule of thumb, or a scale that provides support for cosmetic updating contributions to lowering effective age.

 

[Mr Rex]

Your definition of effective age seems not to address the remaining economic life. So does it have a total economic life of 65 or perhaps 100, since @ 65, it still functions as a home, or is it time for the wrecking ball? If you have M&S, refer to page E-1.

 

[Don Clark]

Effective Age: The age of a building based on actual wear and tear and maintenance, or lack of it, that the building has received.

I would not base effective age primarily on how old the structure and components are. I would base it on what age it appears to be based on any maintenace, upgrades, rehabilitation, modernization that go beyond cosmetic changes.

Given what you have described, I would agree with you. However, if any of the above have been done, that might affect the effective age. It is, after all, a matter of opinion.

 

[RSW]

Effective age is based upon the current condition of the subject or how it will be after repairs have been made if subject to. Updating of the improvements on a property can have be big impact on the effective age of the dwelling. HUD will not accept anything with an effective age older than 30 years.

 

[Mr Rex]

Incorrect, HUD will not accept a property if the remaining economic life is less than the term of the loan.

 

[Fred]

The rule of thumb on EA is that everyone has a different thumb.

 

[Mr Rex]

Examples

 

[Doug Trites]

How old is the roof and the conditon? Has the interior been kept up with painting, cleaning, etc? Have the windows been taken care of, IE painted, putty etc? While the electrical could be an issue due to size of amp, I have been in a lot of older homes that have orginal foundations, walls and windows and they are not near the end of the useful life.

 

[Jason Barber]

The effective age is always 1/2 the actual age.

Sincerely,

 

[Doug Trites]

The effective age is always 1/2 the actual age.

Sincerely,

Now I know what I have been doing wrong all these years.:laugh::laugh: