PROPERTY INSPECTION AND ANALYSIS: THE IMPROVEMENTS

Chapter 7

Above grade

ANSI standard

Architectural styles

Below-grade

Building specifications

Condition

Construction classification

Effective age

Floor plan

Functional utility

Inspection checklist

Living area

Quality

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CHAPTER TERMS AND CONCEPTS

LEARNING OUTCOMES

1. Describe what tools are useful when making a field inspection of the improvements.

2. Describe the data emphasized in each of the three approaches to value.

3. Name the major items of a structure that the appraiser seeks to describe and rate.

4. Describe four construction classification types.

5. Explain what is meant by functional utility.

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THE BUILDING INSPECTION

The Intended Use of the Appraisal

The Intended Users of the Appraisal

Limiting Conditions

The Value Approach Requirements

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IMPROVEMENT CHARACTERISTICS

Exterior and Interior Features

Appeal and Marketability

Construction Quality

Physical Condition

Effective Age

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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.

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EFFECTIVE AGE

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

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RECORDING IMPROVEMENT DATA

Building Diagram

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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

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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

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BUILDING CONSTRUCTION (continued)

General ClassificationsClass C – Masonry walls, wood or

exposed steel upper floor and roof structures

Class D – Wood or light steel frames & roofs

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BUILDING CONSTRUCTION (continued)

General Classifications Class S – Steel buildings, steel frame with

steel roof and walls

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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:

o Hawaii vs. Alaskao California vs. New York

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BUILDING CONSTRUCTION (continued)

Building QualityGood – better than average materials

and workmanshipAverage – medium quality FHA and

VA standardsFair – Minimum acceptable qualityPoor – Substandard construction

oSee your cost manual

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BUILDING CONSTRUCTION

Figure 7-4

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BUILDING CONSTRUCTION

Figure 7-5

CHOICE OF MATERIALS

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Figure 7-6

Floor Plans

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Figure 7-8

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Architectural Styles

Figure 7-9

SUMMARY

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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.