How to determine effective age?

[Richard Carlsen]

If the Effective Age is not a basis for making a condition adjustment, what would be the basis used in making the condition adjustment? In other words, what does Average Condition mean and how does it relate to Good Condition? On what basis do you make a -$5000 or a -$10,000 condition line adjustment? What is the standard of measurement used in such an adjustment?

In doing reviews, I've seen too many reports where the condition adjustment appeared to be arbitrary with no justification for the size of the adjustment made. At least if I use the Effective Age differences with a stated standard to which I'm making the adjustment, there is some logical measurement being applied which, in my market, has fairly good support based on the markets reaction to overall condition.

 

[COUGIT]

Eff.age: 28

 

[Webbed Feet]

<snip>................
But otherwise, I use total economic life as found in the Marshall & Swift on page E-7 and use my personal judgement on effective age.

Mr. Klos,

Appraisers in Oregon can get cited by the board for doing that.

I recommend you read the article on page six.

http://oregonaclb.org/media/Summer2005Newsletter.pdf

Webbed.

 

[Jeffery Hall]

Making the "Chart" bigger

Mr. Cooper, could you e-mail me that chart. Looks interesting, but I can't read it. Thank you in advance.

I use mozilla-firefox web browser. Others may be different.

After opening the chart in another window or tab, move the cursor over it. A small magnifying glass will appear in the place of the arrow cursor. Click one time on the mouse. "WAAH-LAAH" (pardon my French can't spell in anythin' other'n Inglish) - the page gets bigger.
:new_multi: :Eyecrazy:

 

[Peter LeQuire]

DWiley wrote, "My copy of The Appraisal of Real Estate details several acceptable methods for deriving the effective age of a property, but neither "personal opinion", "gut-feeling" or "based on experience" are listed. Are these "recognized methods and techniques"? Perhaps I need to update my library."

Ebenezer Scrooge's "gut feeling" was, as I recall, an undigested bit of beef.

Anecdote: I was stipped by an UW because of a statement of effective age she felt wasn't appropriate for the property. Sooooooo, next appraisal to this lender, I used one of the "recognized" methods for developing an opinion of effective age. She came back with a request to justify why the cost approach was more than 5% less than the sales comparison approach. (And, before anyone parks, I'd tried to communicate the uncertainties of estimates of depreciation, the unique setting of the subject, substantial updating/renovation, etc.)

I said because I refused to back into the cost approach. We'll see how the skirmish continues.

 

[Michigan CG]

I use mozilla-firefox web browser. Others may be different.

After opening the chart in another window or tab, move the cursor over it. A small magnifying glass will appear in the place of the arrow cursor. Click one time on the mouse. "WAAH-LAAH" (pardon my French can't spell in anythin' other'n Inglish) - the page gets bigger.
:new_multi: :Eyecrazy:

Thank you. That worked for me.

 

[Fred]

I used one of the "recognized" methods for developing an opinion of effective age.

What page of The Appraisal of Real Estate did you find that on?

I use total economic life as found in the Marshall & Swift on page E-7

Appraisers in Oregon can get cited by the board for doing that.

With good reason. Isn’t MS really talking about physical life even if they call it economic? How could they possibly have information on local land use patterns and rezones, the things that would make economic life significantly shorter than physical life?

 

[bfriendly]

That was great question and even better answers.....I am with those that say it is an "Opinion"......BUT........isn't that what an "Appraiser's Judgement" is?
I was told Effective age is what it "Looks Like". With that in mind, I have seen 2-3 YO houses look like they were 8-10 years old already.....

The same goes for quality and everything else......

It amazes me how many houses are described as being AVERAGE EVERYTHING! Quality, Condition, Upgrades, Location, Additional/special Features........what the heck is AVERAGE? Is it the same as "Typical":Eyecrazy:

I have never seen the calculations like the ones shown here......pretty impressive, but eh, I dont think so-But then again, that is my OPINION

 

[bfriendly]

Richard has a great point too........gotta be sure not to "Double Dip" your adjustments.........

 

[Hiker]

He says half the building is 21.9 and the other half is 38.5. Why in the hell would he add them together? That's what makes no sense. Half of a house is updated and looks like it's 10 yrs old, the other half has no updating and looks like it's 25 yrs old. So if we follow Bernie's logic, the house has an effective age of 35 yrs?
:new_all_coholic:

If it's a duplex with two separate APN's, who does one appraisal on them? Seems like two appraisals are needed.