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Property Inspection & Analysis: The Improvements
Basic Real Estate Appraisal: Principles & Procedures – 9th Edition
© 2015 OnCourse Learning
Chapter 7
STUDENT LEARNING OUTCOMES
• Describe what Tools are Useful when making a Field Inspection• Describe the Data emphasized in each of
the Three Approaches to Value• Identify the Major Components and
Features of a Structure• Describe Four Construction Classifications• Explain what is meant by Functional Utility
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7.1 PLANNING THE BUILDING INSPECTION
•Much of same equipment and tools that were needed for the Site Inspection are needed (see Chapter #6)• The biggest difference and most important is to
have an Inspection Checklist or Form for Recording your Data and Observations• The Improvement Section of the Uniform
Residential Appraisal Report (URAR) can serve this purpose (see next slide)
• .
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URAR – OLDER DESCRIPTON FORMAT
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URAR – USING THE UAD FORMAT
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WHAT INFO SHOULD YOU COLLECT?
•Consider the Intended Use of Appraisal?
•Consider the Value Definition
• Special Conditions
•What Value Approaches Apply?
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7.2 PERFORMING THE INSPECTION
What to Inspect• Extent of Inspection – Interior and/or Exterior• Plan Where to Start•Must You View All Finished Areas?• Consider a 200-unit Apartment – All Units?• What does the Client Expect (i.e. Scope of Work)?• Attic, Basement and Mezzanine Areas
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EXTERIOR & INTERIOR FEATURES
• Exterior• Foundation, Wall Finish, Windows, Doors & Roof• Other Structures, Landscaping, Paving
• Interior• Number of Room and their Sizes• Number of Baths and Fixtures in Each• Type & Conditions of Materials, and
Workmanship8
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UNIFORM APPRAISAL DATASET
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UAD Condition Ratings
UNIFORM APPRAISAL DATASET (Con’t.)
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UAD Quality Ratings
UNIFORM APPRAISAL DATASET (Con’t.)
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UAD – Updating & Remodeling Standards
UNIFORM APPRAISAL DATASET (Con’t.)
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UAD – Updating & Remodeling Standards
Document all Observed Modifications with Photos!
RATING FOR APPEAL & MARKETABILITY• Construction Quality & Physical Condition• Room Sizes & Layout• Closets & Storage• Energy Efficiency• Plumbing & Baths• Electrical, Heating & Air Conditioning• Kitchen Layout, Cabinets & Equipment• Car Storage & Landscaping• General Livability and Appeal 13
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Put Yourself in the Shoes of the Typical Buyer!
EVALUATING CONSTRUCTION QUALITY
Typical Quality Ratings Per Cost Manuals• Good – Better than average materials and
workmanship• Average – Medium quality meeting FHA and VA
minimum standards• Fair – Minimally acceptable; Meets minimum
building codes• Poor – Substandard
UAD Quality Ratings are becoming the Standard14
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EVALUATING PHYSICAL CONDITION
• Also Reference UAD Condition Ratings• Observe General Level of Upkeep• Note and Document Items of Deferred
Maintenance and Structural Defects•Working Order of Appliances, HVAC,
Plumbing and Electrical• Signs of Water Leakage (Roof or Plumbing)• Signs of Moisture / Mold
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EFFECTIVE AGE• Usually defined as the relative age of a structure
considering its physical condition, marketability and degree of updating; versus the historical or Actual Age• However, to comply with UAD standards,
adjustments should be based on Actual Age!• Effective Age estimates are considered too
Subjective, versus more Absolute UAD terms• Condition, Updating and Remodeling can be
adjusted for separately from Age (Year Built)16
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MEASUREMENTS & DRAWINGS• Gross Living Area (GLA)• Finished and Heated Areas• ANSI Standards• Above-Grade vs. Below-Grade Areas• Unfinished Areas• Gross vs. Net Areas for Commercial• Tape Measures vs. Laser Devices• Balancing the Building Diagram (Close)• Required Photographs 17
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BUILDING DIAGRAM EXAMPLE
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7.3 CONSTRUCTION DETAILS
Construction Classifications are based upon framing/structural materials and resistance to fire.• Class A – Fireproof steel frame, and reinforced concrete
or masonry floors and roof• Class B – Reinforced concrete frames and reinforced
concrete or masonry walls, floors & roof• Class C – Masonry exterior walls, and wood or exposed
steel floor and roof• Class D – Wood or light steel frame and roof; common
for most residential structures in the West and South19
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CONSTRUCTION DETAILS (Con’t.)
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CHOICE OF MATERIALS
Materials selection dependent on…• Climate, Availability and Cost• Style, Durability and Code RequirementsTypical Residential Specifications vary by location and continue to changeTypical residential construction components, materials, and features are outlined on Pages 214 through 218 of the Textbook
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FUNCTIONAL UTILITY / FLOOR PLAN•Measures the Livability of a House• Judged by a combination of usefulness and
attractiveness along with floor plan and equipment/appliances• Orientation of structure to views, sun,
weather and natural topography• A floor plan is judged by access to rooms,
separation of areas, efficient and pleasant layout, and potential furniture placement
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STUDY IN FLOOR PLANS – HOUSE A
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STUDY IN FLOOR PLANS – HOUSE B
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ARCHITECTURAL STYLES
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CHAPTER 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. 26
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CHAPTER SUMMARY (Con’t.)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.
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IMPORTANT TERMS & CONCEPTSAbove-Grade Effective Age
ANSI Standard Floor Plan
Architectural Styles Functional Utility
Below-Grade Gross Living Area (GLA)
Building Specifications Inspection Checklist
Condition Quality
Construction Classification
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