PROPERTY INSPECTION AND ANALYSIS: THE IMPROVEMENTS

Chapter 7 PROPERTY INSPECTION AND ANALYSIS: THE IMPROVEMENTS

CHAPTER TERMS AND CONCEPTS • Effective age • Floor plan • Functional utility • Inspection checklist • Living area • Quality • Above grade • ANSI standard • Architectural styles • Below-grade • Building specifications • Condition • Construction classification

LEARNING OUTCOMES Describe what tools are useful when making a field inspection of the improvements. Describe the data emphasized in each of the three approaches to value. Name the major items of a structure that the appraiser seeks to describe and rate. Describe four construction classification types. Explain what is meant by functional utility.

THE BUILDING INSPECTION The Intended Use of the Appraisal The Intended Users of the Appraisal Limiting Conditions The Value Approach Requirements

IMPROVEMENT CHARACTERISTICS Exterior and Interior Features Appeal and Marketability Construction Quality Physical Condition Effective Age

AGE • In the past, some residential loan appraisals required the appraiser to estimate “effective age.” • To comply with UAD system today the “actual age” must be used.

ACTUAL AGE • This is the chronological age of the property improvements.

EFFECTIVE AGE • Effective age is usually defined as the relative age of a structure considering its physical condition and marketability.

RECORDING IMPROVEMENT DATA

Building Diagram

JUDGING APPEAL AND MARKETABILITY Construction Quality Physical Condition Room Size and Layout Closets and Storage Energy Efficiency Baths and Plumbing Heating and Air Conditioning Kitchen Cabinets & Equipment Car Storage Facilities Landscaping and Outdoor Improvements

UNDERSTANDING BUILDING CONSTRUCTION • General Classifications • Class A – Fireproof steel frames, concrete or masonry frames, floors and roof deck • Class B – Fire resistant concrete or masonry floors, and roofs

BUILDING CONSTRUCTION (continued) • General Classifications • Class C – Masonry walls, wood or exposed steel upper floor and roof structures • Class D – Wood or light steel frames & roofs

BUILDING CONSTRUCTION (continued) • General Classifications • Class S – Steel buildings, steel frame with steel roof and walls

BUILDING CONSTRUCTION (continued) • Selection of Materials • Climate, cost and durability • Availability, style and code requirements • Residential Specifications • Vary greatly with climate, availability, cost, style, etc. • Examples: • Hawaii vs. Alaska • California vs. New York

BUILDING CONSTRUCTION (continued) • Building Quality • Good – better than average materials and workmanship • Average – medium quality FHA and VA standards • Fair – Minimum acceptable quality • Poor – Substandard construction • See your cost manual

BUILDING CONSTRUCTION Figure 7-4

BUILDING CONSTRUCTION Figure 7-5

CHOICE OF MATERIALS Figure 7-6

Floor Plans Figure 7-8

Architectural Styles Figure 7-9

SUMMARY The inspection and analysis of real property improvements require preparation and planning. The intended use of the report greatly affects the amount and kind of data required in the inspection and analysis of improvements. The purpose of most appraisals is to estimate market value. This generally requires a detailed description of the physical structure and a rating for market acceptability. Regardless of the approach to be emphasized, the building inspection should accurately describe and rate the physical features of the structure for marketability, quality of construction, and physical condition. It is desirable that the appraiser have a basic knowledge of design principles in construction.

PROPERTY INSPECTION AND ANALYSIS: THE IMPROVEMENTS