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This Old House

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Kenneth Bartel

Freshman Member
Joined
May 2, 2003
We are appraising a house that is 104 years old with an effective age of 30. What do I put as the remaining economic life? (not used to old houses here in California!)
Also this house has a basement that is 25% completed with a bed and bath. Do I include the bed and bath in the total room count? Or is it not considered because it is below grade?
Thank you so much...
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
Total economic life is a moving target. I use 60 years under the theory that a home with no maintenance would only be habitable for 60 years. The important point is NO repairs or updating. If you paint it or make repairs you are reduceing it's effective age. I base this on personal observations of old abandon farm houses in my market that were abandon in the 1950's and which are now well on the way back to becoming dirt. I think M&S uses a 70 year economic life. The big thing is to realize the difference between actual age and economic life. The oldest houses in my area are only about 150 years old, if you go to the east coast might be looking at 250 years, go to europe and you may be more than 500 years.


The basement rooms are not counted in the total room count but are reported on the basement finsih lines just below the Above Grade Living Area on the 1004 or 2055. Rather than making room count adjustments for rooms other than baths I prefer to report the square foot of basement finish and adjust for that. Either way is acceptable (rooms or square footage) as long as you are consistent across the grid.
 
W

walt kirk

Guest
If you believe that the house will be physically habitable and economically competative with other houses in the area in 50 years then it will have a remaining economic life of 50 years. I have appraised many 100+ year old houses which have been in great condition, are well located and will be desireable in the forseeable future. I have also appraised 15 year old slums which were on their way to falling down.
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
I just noticed your effective age estimate of 30 years, to me that implys a home which is in average or less condition based on my total economic life estiamte of 60 years. If you are using a 100 year total economic life for the home then it would imply a home in good condition.
 

Em Tee

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
I'm confused (of course, I'm still a trainee, so what do you expect?). Isn't an effective age of 30 years saying the home looks like a 30 year old home? If so, wouldn't that be good no matter if the economic life estimate is 60 years or 100 years?
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Mary,

If you are stating that the house has an effective age of 30 years. You are stating that IMHO the house has not undergone any significant remodeling since the late 60's early 70's. Roof cover has not been replaced, windows (1/4 IG), electrical updating, floor covering, kitchen (appliances, cabinets, and countertops), no updating to the bathroom, and no painting (interior/exterior). If the owners of the property have done some updating/maintenance in since the 70's the effective age of the house would be lower. IE replaced the roof cover, newer floor covering, painting the effective age may be lower based upon an economic life of 60 years. The economic life also comes from your local area IHHO although Marshall and Swift is a guideline it is just that a guideline you also need to consider your area for costs/economic life. Hear I use an economic life of 65 years because our "seasons" (IMHO we have wet and wetter) are not substantially different from each other unlike other areas of the country. Also look at the other houses and as others have posted consider how much longer the house will need without magor updating.

Ryan
 

Em Tee

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Now I get it! Thanks Ryan. :beer:
 
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