Model home 2 years old sold as never occupied

[Atlanta CG]

Does not appear to be a C0 as it has never been occupied, but it has seen a lot of buyer traffic and is sold "as-is" according to P&S. What would you call it?

 

[J Grant]

Does not appear to be a C0 as it has never been occupied, but it has seen a lot of buyer traffic and is sold "as-is" according to P&S. What would you call it?

C2 is a two-year-old home that had some minor depreciation at that time.

 

[Atlanta CG]

Oops, C1, not C0.

 

[J Grant]

Oops, C1, not C0.

Imo, a two year old home is no longer C 1.

 

[sputnam]

What I would do is kind of radical. I'd re-read the definitions of the condition ratings and select the one that fit the best.

 

[Tom4value]

C2 is a two-year-old home that had some minor depreciation at that time.

"The improvements have been recently constructed and have not been previously occupied. The entire structure and all components are new and the dwelling features no physical depreciation."

Specifically says, "have not been previously occupied". Call it a C1 and explain/comment if there is any notable physical depreciation. I know, "....features no physical depreciation", but how much if it has never been lived in? Enough to have an affect on value? Besides, no other classification fits.

 

[alebrewer]

Doesn't really matter - so long as: (1) you explain what you're doing and why, and (2) you're comparing apples to apples in the SCA.

 

[DWiley]

I know, "....features no physical depreciation", but how much if it has never been lived in? Enough to have an affect on value? Besides, no other classification fits.

Even though it has not been lived in, the home has been exposed to the effects of weather for two years. The roof shingles, exterior paint, etc. have some wear and are not new.
The physical depreciation might be very low, but it would not be zero, as required by the definition of C1

 

[Mark K]

Even though it has not been lived in, the home has been exposed to the effects of weather for two years. The roof shingles, exterior paint, etc. have some wear and are not new.
The physical depreciation might be very low, but it would not be zero, as required by the definition of C1

Then where do you draw the line? A spec home that sits on the market for two months, 6 months, or two years? Even after two months there is physical depreciation.

Unless someone moves the day the house is completed, there will be depreciation.

Judgement call IMO. Make the call and explain why you chose one over the other.

 

[DWiley]

Then where do you draw the line? A spec home that sits on the market for two months, 6 months, or two years? Even after two months there is physical depreciation.

Unless someone moves the day the house is completed, there will be depreciation.

Judgement call IMO. Make the call and explain why you chose one over the other.

The line was always pretty clear to me. When I developed the cost approach, did I report physical depreciation greater than 0? If so, it is, by definition, no longer C1, regardless of occupancy,