Quality

[Overimprovement]

If all else fails, I would check the assessors estimate. At least you have "support" for the quality rating.... If I see the 2+10% compared to a 3 - 10%, well, I bet the quality is lower in the 3 - 10%... Same in a review. I would note that the appraiser has the comps say, Q2, Q3, Q2, BUT the assessor shows them all as grade C or D (low).

Ahh...you must have assessors who actually do assessing in your counties.
My counties basically go by most recent transfer price, and 75% of the information is incorrect. But appreciate the thought!

 

[Overimprovement]

Q1 is rarely seen by an appraiser...this is the home of the very rich & famous.
View attachment 35206

I don't think my butler gave permission for you to use pictures of his summer house. I'll try to convince him not to sue.
Thanks!

 

[Overimprovement]

Enough people have commented on cost per sf to build so no need to repeat it, you asked what residential characteristics would bump a home from Q3 to Q2 in our market...we do get a fair amount of Q2 homes here ( and a rare few Q1). For q3 to Q 2, it is the overall higher level of finish and architecture...such as higher ceilings, intricately coffered ceilings, and crown molding, and custom paint and chair rail moldings on the walls down to the double height or craftsman milled baseboards, or cypress wood wood beams on the ceiling etc, depending on character of the home.
Whereas a Q3 might just have crown moldings, and stock coffering if any in living, maybe a tray ceiling in the master , regular baseboards etc. The kitchen, Q2 has thick slab quartz or exotic granite with double bullnose, Q3 has nice but more "stock" quality granite of medium slab/single bull nose, cabinets and appliances and finishes/fixtures would be commensurate materials in each room. I've seen kitchens with Viking ranges and custom cabinets /miele appliances that cost as much as a small starter house.

The higher level/ more "custom" or superior quality starts on the exterior of the home and continues inside. A Q3 home might have an S tile roof, a Q2 home has clay barrel tile to replicate the mansion roofs of Palm Beach Island, or maybe a high tech metal roof or a roof of solar tile etc. Whatever the style of the house, it is superior quality of its type. If contemp it often has big windows, interesting angles, lutron smart house , shades that darken in the sunlight etc, if an older home it is restored with original detail with carved mantels etc, In other words, no matter the style or age, A Q2 house goes "beyond" a very nice, but more ordinary Q3 of similar style or age.

f you want to develop your eye, search online for high end listings at any of the RE sites. Start looking at and study the interiors and exterior photos and written descriptions of a 3000 sf home listed at 1.2 million vs a 3000 sf home listed for 790k in the same area ( which might correlate to Q2 and Q3) Search high end kitchen and bath websites see the latest $ appliances and cabinets and bath trends, same with other design or builder material websites. for floors and roofs.

Exactly the type of details I was hoping for--thanks!
BTW, if I just went by this, I would be also be in Michigan's camp--no (or perhaps a very small handful) of Q2 homes in my area, certainly no Q1...

Which brings up a pet peeve I have with UAD (one of many). With both condition and quality, it seems like 85% of my homes are C3 or C4, and Q3-Q5. Little new or even newer construction around here. So that's two condition ratings, and 3 quality ratings to choose from. I have shied away from using Q6 as its always entails headaches, but I wonder if I need to hold my ground more. Entry level/cheapest/contractor grade stuff IS what it is. Sorry if lenders don't like it for whatever reason. This ain't Palm Beach here.

While I do adjust within the same quality/condition rating (with explanation of course), its just another example of UAD's failure to be relevant in the real world.

 

[J Grant]

Exactly the type of details I was hoping for--thanks!
BTW, if I just went by this, I would be also be in Michigan's camp--no (or perhaps a very small handful) of Q2 homes in my area, certainly no Q1...

Which brings up a pet peeve I have with UAD (one of many). With both condition and quality, it seems like 85% of my homes are C3 or C4, and Q3-Q5. Little new or even newer construction around here. So that's two condition ratings, and 3 quality ratings to choose from. I have shied away from using Q6 as its always entails headaches, but I wonder if I need to hold my ground more. Entry level/cheapest/contractor grade stuff IS what it is. Sorry if lenders don't like it for whatever reason. This ain't Palm Beach here.

While I do adjust within the same quality/condition rating (with explanation of course), its just another example of UAD's failure to be relevant in the real world.

Regarding what you said about Q5 and Q6, per the definitions, Q6 is not just about cheap/entry grade, Q6 homes have deficiencies. Which is the reason lenders have problems with it. If you do encounter a true Q6, you'd have to report it correctly, as we would do with any other rating But it sounds like what you are talking about is just very low grade Q5?

". Q5 - Economy of construction with basic functionality. Plain design with minimal ornamentation and limited interior detailing. Mostly stock materials. Upgrades are limited, and stock quality. Meet minimum building code.

"Q6 - Basic quality; lowest cost of construction & materials. Possibly built by unskilled people. Utility items may be minimal or non-existent. May have non-conforming add’n. May not be suitable for year round occupancy "

 

[Overimprovement]

"Q6 - Basic quality; lowest cost of construction & materials. Possibly built by unskilled people. Utility items may be minimal or non-existent.

This is the part that sometimes applies to some low end stuff in my area. These were mostly built in the 1980s and already have undergone a changeover to mostly rentals due to the low quality. Typical 3/1, 1000 sqft, most basic materials at Lowes, etc. The quality of workmanship is poor too. They are mostly borderline Q5/Q6. But yes, if all the definition must apply, there probably are very few actual Q6's.

 

[J Grant]

Exactly the type of details I was hoping for--thanks!
BTW, if I just went by this, I would be also be in Michigan's camp--no (or perhaps a very small handful) of Q2 homes in my area, certainly no Q1...

Which brings up a pet peeve I have with UAD (one of many). With both condition and quality, it seems like 85% of my homes are C3 or C4, and Q3-Q5. Little new or even newer construction around here. So that's two condition ratings, and 3 quality ratings to choose from. I have shied away from using Q6 as its always entails headaches, but I wonder if I need to hold my ground more. Entry level/cheapest/contractor grade stuff IS what it is. Sorry if lenders don't like it for whatever reason. This ain't Palm Beach here.

While I do adjust within the same quality/condition rating (with explanation of course), its just another example of UAD's failure to be relevant in the real world.

I believe UAD is relevant in the real world. If in a market area where there is very little Q1 or Q2, it can mean if the Q2 is a subject in that area, the ultra quality can be a super adequacy. Whereas in an area with other Q2 or even Q1 the subject fits right in.

I do appraise some Q2 and have even done a few Q1, but Palm Beach county also has many working class areas and some extreme poverty areas...Belle Glade ( part of Palm Beach County) is one of the poorest in the nation. The sugar cane workers in Pahokee living 5 families to a trailer puts the $ into the coffers of the Fanjul's Q1 estate on Palm Beach Island.

It is difficult emotionally sometimes ( for me ) appraising ultra luxury houses when the next morning I might be doing a starter home where people saved for months to replace a toilet...

 

[residentialguy]

I have shied away from using Q6 as its always entails headaches, but I wonder if I need to hold my ground more.

If this is for FNMA UAD 1004, you actually can not state Q6 or C6 on the SCA grid. Those are automatic "subject to repair"...and with "subject to", your SCA must always reflect the as repaired condition & quality. In your comments, you state that upon inspection it was C6 and/or Q6, thus required by FNMA UAD guidelines to be repaired.

Most likely the lender won't finance q5 or c5 either, so the above would hold true for those ratings as well. I've seen many reports show the before repair condition on the SCA... Think of New Construction. That's how you handle "subject to"...the report must always reflect the as repaired/as completed state.

 

[Mr Rex]

Can you quote where Q6 is unacceptable? I must have missed the memo.

 

[J Grant]

If this is for FNMA UAD 1004, you actually can not state Q6 or C6 on the SCA grid. Those are automatic "subject to repair"...and with "subject to", your SCA must always reflect the as repaired condition & quality. In your comments, you state that upon inspection it was C6 and/or Q6, thus required by FNMA UAD guidelines to be repaired.

Most likely the lender won't finance q5 or c5 either, so the above would hold true for those ratings as well. I've seen many reports show the before repair condition on the SCA... Think of New Construction. That's how you handle "subject to"...the report must always reflect the as repaired/as completed state.

A lender not financing on Q6 is not our problem. The appraisal is to opine value and report property quality and conditions, not ensure financing. Appraisers need to separate out a lender concern with an appraisal concerns.

There is no edict from fannie about you can not use Q6 or C 6, it is just that most lenders want a C6 subject to repair, but that might not be true for an REO assignment from client., they might want a C6 house " as is" ( which might make it a tear down)

Q6 is the very low quality or the low quality with deficiency per the Q6 definition... it might make the property ineligible for financing but that is not our concern, is it?

 

[Doug Wegener]

In your market area, what residential characteristics would bump a home from a Q3 to a Q2 rating in one of your reports? I ask because while I have tried to go by UAD guidelines, there frankly are not a lot of high quality homes in my market area. In the few reviews I have done, it seems like sometimes other appraisers are going with better quality ratings on a home than I would have in some instances.

Any thoughts appreciated!

Our assessor's offices rate homes by quality (1 thru 7). I am influenced by them and often cite their rating in reports. Works for me.