Property Condition – An Objective Guideline For A Subjective Concept

The condition of a house can be a hard thing to judge. A pink house can be considered excellent to some and poor to others and a house with no landscaping can also appear fair to poor when the house is actually well maintained! So, when the house is salmon pink and has no landscaping to be heard of…what does the bank call it? Here is your ultimate guide to property condition designations:

For the Subject Property and Comparable Property ratings:

  • Excellent Condition– Well Maintained and upgraded and/or quality building materials. These properties are fully financeable in their current state. If the interior is viewed, the appliances are up to date and are of high quality. Many upgrades. Modern.

    An Example of a Home In Excellent Condition

  • Good Condition– Well maintained and few/no evidence of deferred maintenance.  Very minimal deferred maintenance can be quickly and cheaply resolved and is only cosmetic in nature. Some upgrades typical in market. These properties are fully financeable in their current state. If the interior is viewed, the appliances are up to date and are of good quality but not high quality.

    An Example of a Home In Good Condition

  • Average Condition– Maintained and evidence of typical wear and tear for age and neighborhood.  Any deferred maintenance can be quickly and cheaply resolved and is mostly cosmetic in nature. Some upgrades typical in the market. These properties are fully financeable in their current state. If the interior is viewed, the appliances are of adequate functionality.

    An Example of a Home In Average Condition

  • Fair Condition– Lacks maintenance and/or minor repairs are needed to bring it into average condition.  Repairs needed.  These properties can be financeable in their current state but may not qualify for VA, FHA or some other finance options. If the interior is viewed, the appliances are out of date but functional.

    An Example of a Home In Fair Condition

  • Poor Condition– Uninhabitable, siding/shingles missing, dilapidated, overgrown landscaping, fire damaged, flooded, vandalized or stripped of copper.  Major repairs needed.   These properties are not financeable in their current state. If the interior is viewed, the appliances are out of date with suspect functionality.

    An Example of a Home In Poor Condition

For the Neighborhood rating:

  • Excellent Condition – Majority of the properties in the immediate vicinity of the Subject adhere to the Excellent rating for homes.
  • Good Condition – Majority of the properties in the immediate vicinity of the Subject adhere to the Good rating for homes.
  • Average Condition – Majority of the properties in the immediate vicinity of the Subject adhere to the Average rating for homes.
  • Fair Condition – Majority of the properties in the immediate vicinity of the Subject adhere to the Fair rating for homes.
  • Poor Condition – Majority of the properties in the immediate vicinity of the Subject adhere to the Poor rating for homes.

So, when you show up at a house and it looks like this, despite the problem that it will only appeal to certain buyers, the home is considered to be in Excellent or Good Condition.

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About saraschlosser

Sara Schlosser is the Community Manager at InsideValuation.

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