I agree with Randolph. However, most appraisers do not have the experience or background to determine "fair as opposed to average quality." Furthermore, what distinguishes "fair" is typically inside the walls, inside the materials and is often exacerbated by poor workmanship. That said, I have often seen excellent quality but put together with poor workmanship. What many appraisers might do is to equate CONDITION to QUALITY. If it meets local codes, it is more than likely Average or better quality. Lumber, for example, to meet local codes must be rated standard or better and it is stamped on each board. ALL approved materials are rated by ICBM (International Congress of Building Materials inspectors). Concrete is required to be of a certain mixture ratio.....on and on. So, unless you can PROVE that inferior materials were used throughout the building, do not place a FAIR tag on it. And, yes, you can be sued for mis-identifying the rating.
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Fair Quality of Construction
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I agree with Randolph. However, most appraisers do not have the experience or background to determine "fair as opposed to average quality." Furthermore, what distinguishes "fair" is typically inside the walls, inside the materials and is often exacerbated by poor workmanship. That said, I have often seen excellent quality but put together with poor workmanship. What many appraisers might do is to equate CONDITION to QUALITY. If it meets local codes, it is more than likely Average or better quality. Lumber, for example, to meet local codes must be rated standard or better and it is stamped on each board. ALL approved materials are rated by ICBM (International Congress of Building Materials inspectors). Concrete is required to be of a certain mixture ratio.....on and on. So, unless you can PROVE that inferior materials were used throughout the building, do not place a FAIR tag on it. And, yes, you can be sued for mis-identifying the rating.
fifteen
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That's known webbed, but how do you reconcile it to the lenders requirement. If you don't you killed a loan, even if the value is there - as fair quality is the kiss of death. We have both sides tugging at our perceptions of the word "fair". There is no word for "fair quality" or "low quality" in the lenders language. Until they learn these foreign terms "fair and low quality" and loan on them, we're caught up in a translation quandary.
To me, for the sake of expediency, "average" quality is perception in much the same way "rural" is when dealing with an english language impaired lender. The report is being prepared for them and it has to be understood by them. I wonder if they went to a special school to unlearn the terms fair and low as it relates to quality. Brains were probably wiped with drugs lol, cheaper and faster
To me, for the sake of expediency, "average" quality is perception in much the same way "rural" is when dealing with an english language impaired lender. The report is being prepared for them and it has to be understood by them. I wonder if they went to a special school to unlearn the terms fair and low as it relates to quality. Brains were probably wiped with drugs lol, cheaper and faster
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Semantics.....not translation.
Randolph Kinney
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Fair quality housing has been built for decades. Buyers bought those houses new and lenders financed them using the word "fair".
Fair quality housing has been refinanced for decades. Lenders have refinanced them using the word "fair".
What has changed is some lender's sensitivity to the word "fair". Fair quality is equated with the word "cheap" and the words "low income". It is just another way for some lenders to red line neighborhoods as they will not make loans on fair quality construction.
It is not an appraiser's problem. It is a lender problem.
Webbed Feet
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Fantastic! So try explaining to me how using a relative, pulled out of your *** word for a rating instead of a published reference source for it that describes the meaning of the word you used, is going to pull your fat out of the fire on that one?
"Fair" in M&S does NOT mean "inferior." It simply describes a level of construction quality. The real battle here is due to poor reporting skills of appraisers and lenders fearing investors that don't comprehend what is being said by the appraiser.
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BUT.....in whose opinion is it fair? Beauty is in the eye of the beholder. If entire tracts were built using "fair" materials, does not that make all those homes in that tract of average quality?
Webbed Feet
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If entire tracts of houses have all slid off their foundations due to an earthquake, doesn't that mean all of them are in "Average" condition?
If entire tracts of houses have all slid off their foundations due to an earthquake, doesn't that mean all of them are in "Average" condition?
Funny, Webbed! No, but if they all slipped off their foundations I would hardly call them "fair." You would have the even more controversial term Poor" involved.
Randolph Kinney
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My bold.
No. The appraisal 1004 form is asking for the construction quality of the subject both in the sales grid and the cost approach. You base your opinion of construction quality, for example, using as source like M & S on both.
............assuming you are employing the cost approach you could reference M&S as your source for your opinion. I guess you could use it for your source even if just using the market approach. However, if they are 40-50 year old houses and they are still standing and fully functional, I would call them average quality for the neighborhood. How much responsibility should we take in educating fannie and freddie. Even FHA has changed their definition of FAIR to AVERAGE if they meet MPS.
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