FAIR condition

[ttaM kooC]

Keep in mind that Lowe's doesn't stock "Average condition paint" that is already soiled and slightly worn. The point is that rather than giving them a cost to cure that will elevate the subject to average condition you are going to improve the subject to good or better condition.

Thank you, Ted. That has always been one of my bugaboos. I suppose if the 15-yr-old appliances don't work and the 7-yr-old carpeting has come loose you could repair the appliances (rather than replace them) and reattach the carpeting (rather than replace it) but in the real world, most of the conditions we see that would be rated "fair condition" are going to go from "fair" to "excellent" or "very good" (replace the appliances and carpeting with new).

I suppose you could have really bad carpeting in a couple of rooms, replace it, and the OVERALL condition of the house would then be "average."

Guess it depends.

 

[Mr Rex]

Matt, that was the point of my earlier comment that a coat of paint doesn't change the overall quality rating. All of the components need to be evaluated to come up with an "average" of the condition of the individual components, and that "average" provides the overall condition. A new HVAC system in a Fair Quality house, doesn't make it Average, Good or Excellent quality. It makes it a Fair condition house with a new HVAC system. Similarly, for a house to be in Excellent or Very good condition, it would have almost all components new or newer etc. The easiest thing to do in any house is to paint and replace the floor coverings. Doing so doesn't make it Good, Very Good, or Excellent unless the roof, siding, windows and doors, electrical, plumbing, HVAC etc are also in Good, Very Good, or Excellent condition. As a Home Inspector, I don't know if I can ever call a house in Excellent condition again as an Appriaser unless I have crawled through the attic and crawlspace and did a little poking. If its a new house, I say new, that doesn't equate to excellent when you see what I have seen.

 

[Mike Boyd]

I agree with the bass fisherman.

 

[Jack D. Pratt]

I second Mike Garrett: good info

 

[Tina]

Is your subject "average" for the neighborhood?

A $40,000 home could be "average", a $150,000 home could be "average", and a million dollar home could be "average" when compared to other homes in the neighborhood.

If the appraisal is subject to the Fannie Mae guidelines; note that, since the 04-04 Announcement Letter, "The appraiser must report the condition of the improvements in factual, specific terms". The condition is not supposed to be reported in terms of condition relative to other properties in the neighborhood.

I'm having a hard time reconcilling this....

TB

 

[Couch Potato]

I'm having a hard time reconcilling this....

TB

That would be because, although the position Mike stated is common, it is not an acceptable practice to FNMA. What is suppose to be happening is the appraiser uses a standard for all properties, like the one you posted from M & S.

 

[robert higgins]

I have always seen this as a flowed and confusing guideline, condition is (...), what it should be is based on 2 conditions, overall condition based on it's effective age of the subejct in whole and the other compared to other homes in the neighborhood.

The subject is rated in very good condition overall, subject dwelling has been updated and well maintained with a low effective age overall..., subject is rated average compared to other homes found in the neighborhood.

Form should have

Quality of Const - average
Actual Age - 60yrs
Eff Cond. - very good
Ngbr Cond. - average
Overall Cond. - avg/good

 

[Otis Key]

I assume (oh boy) that everyone is referring to fannie guidelines. So, the best I could find is:

XI, 202: Status of Construction (08/24/03)
Generally, we require the improvements for the subject property to have been completed when the mortgage is delivered to us. For specific information concerning manufactured homes, please refer to Part VII, Section 102.07. We do, however, make some exceptions to this for properties other than manufactured homes and, in such cases, an appraisal report should be developed in accordance with the following criteria:

<snip>

•Existing construction. An appraisal may be based on the "as is" condition of the property if minor conditions that do not affect the livability of the property exist—such as minor deferred maintenance—as long as the appraiser's opinion of value reflects the existence of these conditions. The lender must review carefully the appraisal for a property appraised in an "as is" condition to ensure that the property does not have any physical deficiencies or conditions that would affect its livability. If there are none, the lender does not need to require minor repairs to be completed before it delivers the mortgage to us.

When there are incomplete items or conditions that do affect the livability of the property—such as a partially completed addition or renovation—or physical deficiencies that could affect the soundness or structural integrity of the improvements, the property must be appraised subject to completion of the specific alterations or repairs. In such cases, the lender must obtain a certificate of completion from an appraiser before it delivers the mortgage to us. The certification does not need to include photographs of the property unless those that accompanied the original appraisal report are no longer representative of the completed property.

My Bold
Now, while it doesn't directly answer the question, it does tell me that it has to do with the "actual" condition of the property and it does not tell me that that it is "in reference to the competing properties in the market" (I believe that was an old rule from many years ago).

So, I say report it like it is with regards to (as VA used to say but I don't do VA's anymore) "safe, santitary and soundness". Not to the lender (typically LO for a MB) screaming demands. Besides, if you include photos, how can they question it?

 

[Mike Garrett RAA]

Fannie Mae has lots of inconsistencies in their guidelines. Remember I was talking about units of comparison.

I think the safe and sanitary was actually an FHA thing???

 

[Lobo Fan]

I think that comparing it to the neighborhood is a fair comparison. What features would a buyer expect to see? In some neighborhoods, formica counters, cheap carpet, vinyl flooring and low end appliances are standard. In others, granite counters, SS appliances, high end tile floors and radiant heating are standard features.

What is average in one neighborhood might be fair to poor in another. Or vice versa, a superimprovement.

You have to be prepared to defend anything below an average description. If you choose to take it to fair, it might have signifianct issues. Obvious roof leaks, mold appearing substances, foundation cracks, other structural issues. Dirty carpet and crayon on the walls I don't think should drop it to fair. A C2C for new carpet and a professional paint job maybe.

I have done it over pet odors. It was really bad and in every room. You could tell it had soaked into the subflooring and was never coming out.