Remaining Economic Life Of Roof

[Pamela Crowley (Florida)]

I've received a request from UW that I state the remaining economic life of a roof that was being repaired at the time of property observation.

What would you do?

 

[Mountain Man]

I'd let them get a roofer?? B) to give an estimate. I don't want to buy a roof if I said it would last 6-8 years, and it only lasted 10 months. Even on FHA, I'd require an inspection..... pass the buck.

P.S. I've seen too many 20 year roofs only last 6-8 years because it was not installed correctly, in full sun with no ventilation, or had 8 inches of pine straw laying in the valleys and gutters.

 

[George Hatch]

Physical condition is one thing. Estimating the remaining life on a roof requires looking into the future and making a prediction that depends on factors that may not be knowable or controllable at the time of inspection. We can do it for to some degree for income approaches (future earnings and present value) only because we have some outside data to compare and support those estimates; still, even doing that requires certain assumptions that most everyone will agree are necessary in order to do the valuation.

Making an estimate on the remaining functional lifespan of a building component would also require certain assumptions, but the difference is that the participants in the market might not typically make those assumptions. At that point you are essentially providing a waranty for the component, something most of us are going to be reluctant to do. On the other hand, rating the physical condition of a component is not only possible but is necessary in order to define the appraisal problem, and requires no crystal ball.


George Hatch

 

[Ed Potrafke]

I don't normally give a remaining economic life. However, if it is apparent that there isn't any life left to the roof, I will say so. I do have a decent amount of experience in roofing, and my brother in-law is a roofer, whom I could ask any questions I have.

 

[Bill_FL]

OK Fannie experts, what is it? 3 years? If less than 3 years, it must be replaced before closing?

My guess is, in the appraisal, your said something like, roof nearing end of useful life.

This triggers the UW to ask, more or less than 3 years left?

 

[Francois K. Gregoire]

Pam,

I would not give an estimate of the remaining economic life of a roof, but in some cases would give an estimate of the remaining physical life of the roof. For instance, an estimate of a minmum remaining physical life is required for FHA Appraisals. Not always is it stated in the appraisal report, but it is part of the analysis.

 

[Restrain]

Pam:

I agree, do the Physical Life. Economic life would entail changes in roofing technology, etc. For example, the economic life of a wood shingle roof on a 100 year old home may still be the total remaining life of the home, because economically, a wood shingle roof may be the most economical way to do it, even thougn the physical life may be 5 years. Conversely, the economic life of a built-up roof may be very low, even though physically the roof may have several years left, because when the repair is done, the roof may need to be changed to a hip roof, running new rafters well up the ridge line.

I just think these people are mixed up on what they want.

Roger

 

[Phil Rice]

I do not climb ladders.

If the roof was typical asphalt shingles, and I could see the roof from the ground, I would disclose that my statement is based on a non expert inspection from the ground. I would be willing to say: Good condition, at least 5 years of service left/or/ near the end of useful life, less than 5 years of useful life/or poor condition, deferred maintenance, adjusted at the estimated cost to cure.

Roofs do not photograph well (IMHO), so your eyes and your opinion might be important to your client. As long as they understand the limitations, I think you should be willing to call it the way you see it. If you feel the need, make an appropriate disclaimer.

If the roof was being repaired at the time of your inspection, how can you make a meaningful statement beyond that fact. Maybe it depends on what kind of repair, but does it not make sense that the time to form an opinion about the remaining life of the roof would be after the repair !!

I do not get the distinction between remaining economic life vs physical life. In a typical sitution, the question is, how many years before it starts to leak?

 

[Elliott]

Pamie,
Here's what I'll say about roofs.....

"Roof is older"

"Roof is at the end of its physical and/or economic life"

"Roof is newer"

"Roof has a lot of moss on it"

I once had a relo with a perfectly good looking roof....but after the
roof inspector (a roofer) learned it was a 20 year old roof and the
roof warranty was 20 years, HE required a new roof.

elliott

 

[Pamela Crowley (Florida)]

Here is what I wrote to the LO, his response, and my final response (another appraiser and I did this one together so both signed it). I can typically look at a roof and give a generalized statement of how it 'appears'. This one didn't look good and instead of replacing it, I think the HO was working on making his own repairs. If a roofing contractor was doing the repairs I would have asked for something from them and included that info in the original report. I could write an estimate of the the remaining 'physical' life of many roofs, but not this one! No way I would make any determinations regarding that particular roof. If it were an FHA, I would have checked it out better than I did and it's very possible I would have called for a new one, subject to a licensed roofing contractor's opinion or simply called for the roof inspection. That roof is not going to be waiting to hang me for the next 3 to 5 years that the UW wanted me to OK it for.

Some good answers posted and I appreciate them all. Part of what I like about appraising is that each one is something different.

Regarding the Underwriter Stip stating:

"Appraiser to give satisfactory opinion on the roof "As Is" has remaining economic life of 3 to 5 years."

The Appraisers, as are the vast majority of all Real Estate Appraisers, are not home inspectors nor roofing contractors and are not qualified to estimate the remaining economic life of any roof.  A professional home inspector or roofing contractor would be necessary to obtain an estimated remaining economic life of a roof; some home inspectors will not make specific statements regarding the roof either.

There is a home inspector in Orange Park, Florida that also holds a professional roofing contractor license and does complete roof inspections.  Contact information:
Tabor K Hill & Associates
1120 Park Avenue
Orange Park, FL  32073
904-269-2929

If I can be of any further service, please let me know.

Pamela,

Do you require a roof inspection for this property and a verified remaining
life by the individual note below?? and why.

An Appraiser is not qualified to estimate the remaining economic life of any roof unless they are a licensed roofing contractor.  I am not requiring anything regarding the roof.  The condition of the roof was noted in the appraisal as observed from the ground and was in the process of repairs.  I do not know who was doing the repairs nor do I know if the roof repairs are complete or were correctly done.  A professional roofer would be necessary to make those determinations.  The individual below is a professional home inspector that also holds a roofing contractors license and is basically the only one I know that will do a roof inspection in a completely unbiased way as he does not sell new roofing jobs.  Using this individual is a suggestion only.  Otherwise, any other roofing contractor out of the Yellow Pages would be qualified to make this determination, but, other roofing contractors do sell roofing jobs and I don't necessarily consider many of them to be totally unbiased.

The Underwriter is requiring the Appraiser make a statement that would basically be a warranty of a component of the structure.  This is beyond the scope of the Appraiser's job.  A licensed roofing contractor is necessary to clear this condition.