Model home 2 years old sold as never occupied

[DWiley]

You would think the GSEs would want it to be clear, wouldn't ya? Only it's not - unless you are aware of a definition for 'near new' that I'm unaware of...

Here is he definition from the Selling Guide:

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

How could a 2 year old home have no physical depreciation?

 

[J Grant]

Agree. Its a judgement call.


"Nearly new with no prior occupancy.."

C1 definition does not say "zero depreciation".

IMO, an existing spec or model home that's had some obvious traffic can still be C1 according to the definition.

"The entire structure, along with its major and minor components, is in excellent condition." It doesn't say 'perfect' or 'brand new'.

It says no wear and tear and new or almost new. How does a year-old or two-year-old house fit with new? No prior occupancy is only part of the C 1 definition; it is not all of it.

 

[alebrewer]

Here is he definition from the Selling Guide:

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

How could a 2 year old home have no physical depreciation?

To your own point - it would depend on the effect of the elements... Hence my encouragement to explain what you're doing and why.

 

[Mark K]

How could a 2 year old home have no physical depreciation?

How can a 3 or 6 month old spec home have no physical dep? Again, where do you draw the line.

 

[J Grant]

How can a 3 or 6 month old spec home have no physical dep? Again, where do you draw the line.

Draw the line where it makes sense. Imo, a six-month-old spec home has minor deprecation, enough to knock it out of C 1. Does a 3-month-old house have enough depreciation to knock it out of C1? It might depend on what season it is, the climate, and the construction quality.

I personally would probably rate any house older than 3 months and certainly older than 4 months a C 2. If another appraiser called it C 1 it probably would not matter a lot in either case to appraisal results.

 

[Surf Cat]

Just call it "Good"

 

[DWiley]

How can a 3 or 6 month old spec home have no physical dep? Again, where do you draw the line.

The line is quite clear. If the cost approach reflects no depreciation, and the home has never been occupied, then it is C1. Otherwise, it is not.

In the case of the OP (two year old model home that has had lots of traffic), I think the answer is very clear, and some just want to argue for the sake of argument (which is nothing new in this community)

 

[Joe Flacco]

I don't think any of the definitions are very clear. But the ratings don't really matter anyway as long as the comparisons are appropriate.

 

[Joe Flacco]

It is just not realistic to think that these types of definitions fit most situations. It is not clear and that is fine.

 

[J Grant]

It is just not realistic to think that these types of definitions fit most situations. It is not clear and that is fine.

Actually, I find that the definitions do fit most situations.

The fact that some seem unable to apply them holistically is not the fault of the definitions.