Home Appraisal: Quality Ratings

Quality ratings appear on your home appraisal, but what do they mean and how does an appraiser rate your home?

We’re going over the differences in quality and how we rate them, both for what you would call a private appraisal and for one that is going for a loan with Fannie Mae or Freddie Mac. If we’re in a private setting - basically if you’re getting an appraisal just to know what your home is worth, or for a divorce or estate planning. We would rate your property from:

  • Poor
  • Fair
  • Average
  • Good
  • Very Good
  • Excellent

Now, those same ratings are converted to a Q1 through Q6 if you’re getting a loan through Fannie Mae, Freddy Mac, FHA, etc. They basically relate to the same thing, it’s just a different way of calling them that is required through the Uniform Appraisal Data Set that Fannie Mae and Freddie Mac use.

Q1 or Excellent

So basically the number one would be a Q1 or Excellent, is a property that is done by an individual architect for a specific user and all the materials are excellent quality, all the workmanship is excellent - far above anything most people would ever see.

Q2 or Very Good

The second one would be Very Good, or Q2, which would also be a very good quality home, however it’s not as specific use. For instance, why I’ve done Excellent Q1 so they’d have indoor basketball courts, indoor racquetball courts - you’re not going to see that in a Q2. Q2 is seen a lot in Scottsdale, Paradise Valley, etc.

Q3 or Good Quality

From there you go down to Good Quality, or Q3, which would be in a subdivision - sometimes built on an individual lot, but also of good quality materials. You’re not going to see laminate counters, you’re not going to see laminate floors or average type quality materials in a Q3 or Good Quality.

Q4/Q5 or Average Quality

Average Quality is basically your track home in large subdivisions where they have four or five different models that are basically all the same. The quality is decent, but it’s not customized, it’s not to an individual’s taste. The Q4 or Average Quality is the majority of homes you’ll find.

Then you go down to a Q5, which is some of the older homes that were built in the 1940’s, 1950’s, 1960’s. They’re basically just square or rectangular homes that are definitely livable but they’re not upgraded really at all. Very plain, average quality homes.

Q6 or Fair to Poor Quality

You get below that and you end up with a Q6 or a Fair Quality to Poor Quality. Oftentimes you’ll find these are a hunting cabin or lake place where someone bought the property for the access to the lake or river and the home is secondary, just a place to stay and it might as well have a tent.

So those are the different quality levels, and when we do an inspection we pay very specific attention to the quality of your home, as well as the other aspects.