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Understanding How An Appraiser Makes a Determination on the Quality of Home

Mar 03, 2021

Do you have a listing that is not selling because it needs updating yet the owner does not think the house is outdated? This article will give you information to share with your client that explains how quality updates can affect market value.  Understanding how an appraiser looks at a home and understanding the process will help you guide your client in this decision making process.

An appraiser considers the condition and quality of the home when determining market value. Quality ratings range from a Q1 to Q6.  Q1 is the highest quality rating with high level of workmanship and exceptionally high-grade material throughout the house.  Q6 is basic quality and may not be suitable for year-round occupancy. Determining a quality rating is a bit subjective but the explanations and picture examples below will help you with a basic understanding of the quality rating process.

Q1
Homes with this quality rating are usually unique structures that are individually designed by an architect for a specified user. Such residences typically are constructed from detailed architectural plans and specifications and feature an exceptionally high level of workmanship and exceptionally high-grade materials throughout the interior and exterior of the structure. Materials might include natural stone, exotic hardwoods, and marble. Q1 homes have custom lighting features and custom doors and windows throughout.

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This Q1 bathroom features all custom details and high end materials.
 
 


Q2
Homes with this quality rating are often custom designed for construction on an individual property owner’s site. However, homes in this quality grade are also found in high-quality tract developments featuring residences constructed from individual plans or from highly modified or upgraded plans. Q2 homes are homes with high end materials such as stone, marble, and hardwoods with many custom high-end doors and windows.

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This Q2 bathroom features marble and some custom details.
 
 


Q3
Homes with this quality rating are residences of higher quality built from individual or readily available designer plans in above-standard residential tract developments or on an individual property owner’s site. The design includes significant exterior ornamentation and interiors that are well finished. Many materials and finishes throughout the dwelling have been upgraded from “stock” standards.

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This Q3 bathroom has quality materials with unique touches.
 
 
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Another Q3 bathroom with quality materials and unique touches.
 
 
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This A3 bathroom features a frameless shower door and custom vanity.
 
 

Q4
Homes with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans are utilized and the design is adequate. Materials, workmanship, finish, and equipment are of stock or builder grade and may feature some upgrades.

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This Q4 home has most builder grade materials but features a frameless shower door.
 
 
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This Q4 bathroom has nice, bright space but uses builder grade materials.
 
 
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Another Q4 bathroom with builder grade materials.
 
 


Q5
Homes with this quality rating feature economy of construction and basic functionality as main considerations. Such homes feature a plain design using readily available or basic floor plans. These homes meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.

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A functional Q5 bathroom space.
 
 


Q6
Homes with this quality rating are of basic quality and lower cost; some may not be suitable for year-round occupancy.

Hopefully these examples will help you guide your client so the improvements that are made will add true value to the home. Our next post will go into more detail about specific improvements that can be made to the kitchen and bathrooms. Sign up for our email list to get specific ideas to share with your clients,

 

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