As we move down the URAR 1004 (found here: https://bit.ly/2IkOwqn) we come to a few areas that can be confused for each other. Here we’ll separate them into parts and explain how each factor separately affects value.
Site / Location / View
On their surface these three seem to be inseparable. The location of the site changes the site’s value. As does the view… how can these be three separate analysis. For this, lets address some real life examples in our coverage area.
How much does a nuclear clean up site, that has no guarantee of disclosure until 2030, affect value?
This is an external influence on the properties near the Kiskimere site in Parks Township, Armstrong County. This would be an example of a factor of location. We’ve performed repeated paired sales analysis to extract the difference in appeal from here to just a few miles away.
What happens when you have riverfront property, but don’t own the rights to use the river front?
This is the case along the Allegheny River in Armstrong County, where one side of the river owns the rights to the river front, but homeowners on the other side don’t. Each have the same view, but the location of the other side has a higher appeal.
What happens when your land is shaped like a triangle and/or is located on a cliff?
This affects the price per square foot of the subject acreage, because the utility of the land is diminished. We perform vacant land sales analysis on properties with similar characteristics in the market to determine the reduction in value to the site.
What happens if your house is built under an overpass and next to high tension wires?
Once again, we came across this in Armstrong County (do you see a trend). These are largely factors of the view. In order to analyze the influence in this case, other properties that have sold within view/hearing of these places are examined to extract impact on appeal. Other examples would be railroad tracks, locations on heavily traveled roadways, etc.
Quality / Condition
These factors are easy to confuse, so lenders have largely adopted a coding system:
Quality ratings range from Q1 - Q6
At the high end of the scale is Q1 - picture the white house. Custom everything, best materials for everything. These homes are very rare because the people with the skills needed are rare. On the other end of the spectrum is Q6 - picture a hunting shack. It barely qualifies as a home, and for part of the year might not be habitable. Most homes in our area fit into the Q4 rating, which Fannie Mae Defines as:
Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship, finish, and equipment are of stock or builder grade and may feature some upgrades.
Condition ratings range from C1 - C6
At the high end of the scale is C1 - brand new, never lived in. On the other end of the spectrum is C6 - this has condition issues so great that the house can no longer function as a home, holes in the floors, roof, missing water lines, no electricity, etc. Most homes in our area fall into the definition of a C4 range:
The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are functionally adequate.
So, a home can be a Q1 quality while in C6 condition (in fact the White House during the War of 1812 was this when it was burnt down) - and you can have a brand new hunting cabin (Q6 quality in C1 condition).