How much do apprasials consider the condition of comparable properties?A house in our neighborhood went on the market this week. Given the real estate taxes, it was probably purchased in the 60s. It is likely being sold by an estate. The photos show that the house is empty. Most of the house has a worn appearance. Carpets are staned. It has original paneling. Given the condition of the upstairs, there could be roof issues. Some changes have been made to the kitchen. I won't call it updating, more like what were they thinking. Backsplashes don't match. Cabinets were either added or replaced, and sort of match the other cabinets. The pattern in the back splashes and flooring give the appearance of a 50's diner. It is a larger house, but that is a straight forward comparison.
Usually the appraisal is based primarily on sq ft of living area and sq ft of land area using $/sq ft figures for similar properties in the area.Sometimes they will add something for extras like garage, swimming pool, etc., and you would think they would deduct the cost of obvious repairs such as worn out carpeting.Of course an older home that might require major renovation including plumbing, heating, electrical, as well as roof, kitchen and bathroom remodeling could be regarded a fixer upper. Then bottom line is land value less cost of removal with allowance for any salables.
How much do apprasials consider the condition of comparable properties?There's a section within the appraisal report for "condition of property." The descriptors are now different; they used to be "fair," "good," "average," etc. Now it's E-1, E-2, E-3, E-4 and so on, with specific definitions for those labels.Obviously, the appraiser can't go inside the comparables, but s/he will certainly describe the exterior condition of each comparable property.
Obviously, the appraiser can't go inside the comparables, but s/he will certainly describe the exterior condition of each comparable property. At least there is some consideration for the condition. The outside is in average condition. It will be interesting to see how quickly, and at what price.
A lot will depend on the local market. In a hot market, people will overlook a lot of shortcomings, while in a slow market, a sub-par house can sit on the market for a long time unless it is priced to sell. A good agent will know the area well and price appropriately.
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