Newbie needs answer to how to determine Effective Age

[KJR2008]

Having a little trouble trying to grasp exactly how effective age of a property is determined, I understand the book definition of effective age, guess what I am looking for is what factors should I be looking for when doing a property inspection that will indicate an appropriate effective age. I understand that effective age is subjective, Am I right in my thinking that when determining effective age, using 5 year increments (ie a 35yr old property) is acceptable, and trying to determine the CORRECT effective age to the year is futile if not impossible. Unfortunately I am without a sponsor at the present time to get this information from.

 

[Michigan CG]

effective age
The age of property that is based on the amount of observed deterioration and obsolescence it has sustained, which may be different from its chronological age. (USPAP, 2002 ed.)

The Market Extraction method of determining effective age is considered the best way to determine effective age. It is pretty long to explain. Look at page 389 of The Appraisal of Real Estate, 12th Edition, your mentor should have that book. If they don't then buy him/her one for Christmas and buy one for yourself too.

Other folks use the "observed method". Basically pulling out of the air.

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Oops, forgot you had no mentor....get the book. It is very possible to determine effective age if you want to spend the time to do it.

 

[Wm. Hattaway]

Be careful if you try to use effective age adjustments on your comps. I sat in on a state appraisal board disciplinary hearing. The chairwomen hammered the appraiser for using effective age adjustments between the comps and the subject. She agreed to the effective age of the subject but without an interior inspection of the comps she would not accept his argument for the adjustment based on what he has seen from the street.

 

[shammo1]

I agree with Wm. Hataway, first off effective age is an opinion..nothing more. I am sure if we all think about it we would all or most would agree that effective age is directly in sync with condition. Personally I dont even measure effective age in the sales grid. I make adjustments for differecens in condition only...and this is done after careful review of MLS photos and other available data..along with my exterior inspection of the comparable property.