The primary reason anyone should have when improving their personal residence should be for their own enjoyment and comfort factor. The side effect or secondary benefit of adding to the comfort factor of your own Simi Valley home, is that those improvements could add value to your home if at some point you decide to sell. These improvements have a much shorter lifespan than most homeowners understand.
As of September 1, 2011 the new Uniform Mortgage Data Program® (UMDP) has gone into affect to provide common set of requirements for appraisal and loan delivery data. This program was established by Fannie Mae and Freddie Mac. I have included some of the definitions and ratings to give you a better idea how the GSEs are trying to create more uniform standards for appraisals.
Not updated – Little or no updating or modernization. This description includes, but is not limited to, new homes. Residential properties 15 years of age or less often reflect the original condition with no updating, if no major components have been replaced or upgraded. Those over 15 years of age are also considered not updated if the appliances, fixtures, and finishes are predominantly dated. An area that is not updated may still be well-maintained and fully functional, and this rating does not necessarily imply deferred maintenance or physical functional deterioration.
Updated – The area of the home has been modified to meet current market expectations. These modifications are limited in terms of both scope and cost. An updated area of the home should have an improved look and feel, or functional utility. Changes that constitute updates include refurbishment and/or replacing components to meet existing market expectations. Updates do not include significant alterations to the existing structure.
Remodeled – Significant finish and or structural changes have been made to increase utility and appeal through complete replacement and/or expansion. The remodeled area reflects fundamental changes that include multiple alterations. These alterations may include some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation plumbing/ gas fixtures/ appliances, significant structural alterations (relocating walls, and or the addition of square footage). This would include a complete gutting and rebuild.
Below are a sample of a few of the ratings and definitions to give you an idea what this may mean to the value of your home.
Condition Ratings and Definitions (C1-C6)
C1 – The improvements have been very recently constructed and have not been previously occupied. The entire structure and all components are new and the dwelling features no physical depreciation.
C2 – The improvements No deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category either are almost new or have been recently completed or renovated and are in similar condition to new construction.
Quality Ratings and Definitions (Q1-Q6)
Q4 – Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standards or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Material, workmanship, finish and equipment are of stock or builder grade and may feature some upgrades.
Q5 – Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. The dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.
The above sampling was created by Fannie Mae and Freddie Mac and any loan underwritten with Fannie and Freddie guidelines is going to be appraised with this new system. So if you are planing updating or remodeling, keep this in mind so you can maximize your investment.
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