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Recently the condition assessment on appraisals has changed.  Before the condition options were Excellent, good, poor, etc.  That has now changed, they are now rated with letter “C” and a number 1 thru 6.  It is important to know these ratings or grades and how it can affect your client.  Here is the short explanation of each grade:

·         C-1  This is a brand new constructed home that has not been lived in

·         C-2   This home has no physical depreciation, deferred maintenance or needed repairs.  And all work has been done recently and is similar to that of a new constructed home

·         C-3   The home is well maintained and no major repairs are needed

·         C-4    This would be an average home.  it features some deferred maintenance and normal wear and tear. 

·         C-5    The home is in major need of repair(s).  The condition is okay and still livable

·         C-6    This home is in need of major repairs, maybe a tear down

Okay, now that you know the property condition rating system let’s talk about how it affects you.  Lenders will not lend on a C-6, some might not even lend on a C-5.  Of course by the time you know the grade for your property it will be in underwriting.   When an appraiser gives a lower score he should also state what caused it.  Some examples would be foundation problems, flooring, etc.  One way to solve your low grade is to do an repair escrow holdback for the repairs needed to increase the grade.  For more information check out:  Repair Escrow.   Another option is to have the seller fix the items needed before closing. 

Please call or email me with any questions.