Minding C's & Q's

[PhiloFarnsworth]

Question 1)Given that the condition and quality ratings are supposed to be absolute, not relative, shouldn't the UAD gods be able to provide exact guidelines for each level?

Question 2)Does 50% Q3 plus 50% Q5 equal Q4? If not, what is it? I would imagine that in such a situation (not unusual at all, given people in the middle of an ongoing remodel of an old house), it would depend on how the market would respond, relative to what would ordinarily be expected in the area. Uh, oh. There that "relative" word.

Question 3) What the heck is a Q1? There are a few 1-3$M homes in my area, but how can I know if they are Q1 or Q2 as I have never been in a 20$M home? What specifically makes a home a Q1, rather than a Q2? Same thing with a Q6 vs. a Q5.

Question 4) It seems that, given a relative multiplier for location, the UAD gods should be able to give a specific cost per square foot range for each quality level as new.

Question 5) Is a home built in the 1890's really to be given a high Q rating because it is constructed of obsolete, but expensive materials? Plaster interiors are objectively higher in quality than the drywall that may have replaced it in a different home. But because of how the market may see it relative to the potential upkeep and repairs of old plaster, the higher Q may be lower in value. There's that old "relative" word, again.

Question 6) These ratings as given are points. The chance of any particular subject meeting the exact criteria for C3 is tiny. It should be defined either as a range (C3-C4) or allow a continuum of rating as needed (C3.562). Why not?; its at least as stupid as what we do now.

Question 7) I am continuously rankled by illogic of not starting the condition ratings at 0. Shouldn't a new home be C0 as it is 0 years old and has 0 depreciation? And since the quality is supposed to be non-relative, why a limited scale, and why a negative range? Who knows what the ever-increasing creativity of American builders serving the wishes of ever wealthier yuppies may create in the future? What would a solid diamond house be rated at, why not a Q7 or 10! And everyone knows that a refrigerator box is a Q0.

Any questions?

 

[sputnam]

1) No one said that ratings are supposed to be absolute.

2) What? Ahh....the appraiser's favorite hobby.....over thinking.

3) Of course, the ratings at either end of the range are rare....that's the point.

4) Again...What? And the 'UAD gods' aren't the appraisers. It's not their job to provide cost or value ranges.

5) Over thinking....again. Q is for quality. It doesn't imply a particular value conclusion. A Q1 dwelling with a C6 rating might very well have a lower value.

6) You can write anything you want in your appraisal. You can grid a property as C4, then state that it is average to good. You can make whatever adjustments are supported and required and explain them.

7) 1 is better, 6 is worse. Not the other way. But more to the point, all ratings are arbitrary...that is, the rating system is created by humans. It's not handed down on stone tablets. In this case, it's not you that got to create and impose the rating scheme. Bottom line....you don't have to like it, you just have to do it.

 

[VolcanoLvr]

"1) No one said that ratings are supposed to be absolute."

Actually 'they' have done so. They are the GSE's, and they are checking reports.

What 'they' expect is the same comp used in subsequent reports to have the SAME C & Q rating as was indicated in the original report by THAT SPECIFIC APPRAISER.

These ratings are not to be 'relative' to the subject being appraised, but 'absolute' in terms of their characteristics.

This is not well understood by appraisers. Actually this is not new. But with the UAD, these ratings on specific homes are being tracked and associated with specific appraisers.

What this means is if you use the same comp properties multiple times, the Q & C ratings for those had better be the same in each report.

 

[Meandering]

Question 3) What the heck is a Q1? There are a few 1-3$M homes in my area, but how can I know if they are Q1 or Q2 as I have never been in a 20$M home? What specifically makes a home a Q1, rather than a Q2? Same thing with a Q6 vs. a Q5.

Don't mistake expensive for qualtiy. Somethings are expensive because of supply and demand. It does not mean they are of better quality once the price goes up.

Personally, I think that Fannie misleads us on the q1 definition, as being a high level of workmanship instead of craftsmanship. And, it is my experience, an old home is a perfect place to find a high level of craftsmanship, as opposed to a newer home.

Yes, you can pay more for oak or cherry trim as opposed to pine or spruce, but there is no craftsmanship in a milled finish, or not even much in a laser cut finish where uniformity of design makes it just one more expensive commodity. Whereas, in hand carved trim work that might have slight flaws to uniformity but was hand chiseled, typically, you will find local historical scenes depicted, or french design motifs that vary across the piece. This is craftsmanship, and the quality indicator. Tre' ceilings where the bevel is a bevel, or a deep bowl curve, that was crafted and worked by hand to achive the beautiful arch, as opposed to boxy strips of sheet rock that are used to make the tre'. That's the quality difference, craftsmanship. Yes a plaster wall costs more than a sheet rock wall, but sheet rock is attached with 12 or so nails or screws, while plaster is hand spread and smoothed and filled, and smoothed and filled to achieve the dead level surface. That's why it's more expensive. Because of the man hours involved, the development of the "craft" to create it and the mastery of the craft that is indicated in the final piece.

Question 1)Given that the condition and quality ratings are supposed to be absolute, not relative, shouldn't the UAD gods be able to provide exact guidelines for each level?

Question 5) Is a home built in the 1890's really to be given a high Q rating because it is constructed of obsolete, but expensive materials? Plaster interiors are objectively higher in quality than the drywall that may have replaced it in a different home. But because of how the market may see it relative to the potential upkeep and repairs of old plaster, the higher Q may be lower in value. There's that old "relative" word, again.

You can have quality items that become functional obsolescence, and ones that are in bad condition, Q1, C6. A junk stove is a junk stove, it does not matter if it came from sears or is a 12 burner viking stainless steel gas model. So don't confuse it. Quality ratings do not designation condition or usefulness. 100 year old stain glass windows are pretty, and a high quality item, but for most I've come across, they leak air like a sieve and anyone that has them either removes them or has to install interior solid pane storms to keep their heat and AC from floating into the atmosphere. That does not make the stain glass windows a lower quality item. Just an inefficient item. Two different considerations.



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