Help settle an argument-RE condition ratings

[Mutyger]

My partner and I were having a discussion on the condition ratings for homes. He says that if he is appraising a 40-50yr old home in a neighborhood of 40-50yr old homes that is in fully rehabbed condition that the best condition it could ever be is average + because he only consider homes to be in good condition that are new-to-3yrs old period. My thoughts are that the condition rating are based on what the neighborhood and its surrounding homes have to offer. So my point is that it may be a 40-50yr old home but if it is fully rehabbed then it is in good condition relative to its neighborhood.

What are your thoughts?

 

[DTB]

My partner and I were having a discussion on the condition ratings for homes. He says that if he is appraising a 40-50yr old home in a neighborhood of 40-50yr old homes that is in fully rehabbed condition that the best condition it could ever be is average + because he only consider homes to be in good condition that are new-to-3yrs old period. My thoughts are that the condition rating are based on what the neighborhood and its surrounding homes have to offer. So my point is that it may be a 40-50yr old home but if it is fully rehabbed then it is in good condition relative to its neighborhood.

What are your thoughts?

Your partner is nuts!

 

[Kevin Mc]

Your partner in wrong. Effective age dictates everything, not actual age.

 

[Elliott]

What Kevin said. If I, or the market, walks into a really nice, clean,
rehab/remodeled home, they don't say, "Oh look this home is
average," they say, "Wow, this home is in really, really good
condition, its almost like a new home."

 

[David Beasley]

My partner and I were having a discussion on the condition ratings for homes. He says that if he is appraising a 40-50yr old home in a neighborhood of 40-50yr old homes that is in fully rehabbed condition that the best condition it could ever be is average + because he only consider homes to be in good condition that are new-to-3yrs old period. My thoughts are that the condition rating are based on what the neighborhood and its surrounding homes have to offer. So my point is that it may be a 40-50yr old home but if it is fully rehabbed then it is in good condition relative to its neighborhood.

What are your thoughts?

I agree with you, a home of any age can be "good" relative to its neighborhood or even "good" relative to the comps if the subject and comps are spread out and not even in neighborhoods.

 

[Edward OConor]

In some areas that I service a completely renovated home could sell for almost as much a new construction.

 

[Mike Kennedy]

In some areas ......a completely renovated or restored older home can, and often do, sell for More than New similar style homes (due to superior craftsmanship and "guts").

Actual Age often means........nothing. A 5 year old house can have an effective age of 30 with poor, fair, or average condition; a 50 year old house can have an effective age of 5 and Excellent, Very Good, or Good condition.

As with all, "it depends". I agree with those who totally disagree with your partner. Methinks he doth "***-u-mes to mucheth". Predisposition and unsupported conclusions impact impartiality - the Market dictates buyer reaction to Actual Age, Effective Age, and Condition - for each assignment. IMO your partners' assertion and practice is no different than adhering to a "laundry list of standard adjustments".

 

[xmtpedprl]

Effective Age is *definitely* where it's at. That, too, is often times quite subjective, but it shouldn't be all that tough to clearly state your reasoning.

We had a client just this week *demand* that we lower our 'Average to Good' rating on a home that was precisely that to an 'Average' rating. Fact is, it had some areas needing a little o' this and a little o' that, but other areas had been tastefully updated, hence our mid-road rating. They wouldn't hear of it, and because of *their* interpretation of the provided photos (we probably give too many) they demanded we lower it. They even stated it to be unacceptable, and would likely have withheld payment, it was that serious an issue for them. I mean, STUPID.

We then also lowered the comparables, as well, so that everything remained 'equal,' as I just didn't feel like fighting that battle given the amount that have become daily as of late. A rare instance of us 'giving in,' but we're trying to keep what/who we have intact, probably like many of you. Sometimes you get a reviewer from a lender just trying to justify their existence, I dunno.

Dave...

 

[c w d]

There are 100+ year old homes in Riverside, a historic district, that would put some 2 year old homes to shame.

 

[Appraisal Santa Fe]

I deal with 100 year old homes in my area as well, when fixed up are extremely desirable in this market and I have no problem calling them Good-Remodel.