In situations where modernization has occurred during the life of a structure, the appraiser must estimate the RCN of each type of structure and compute the effective age and/or the weighted age.
Effective Age
The effective age is calculated by taking the percentage of the remodeling or modernization in relation to the whole. For example:
- 50% of the total structure of a house is 40 years old, 20% is 20 years old, and 30% of the structure is 5 years old.
- 0.50 X 40 = 20.0 years
- 0.20 X 20 = 4.0 years
- 0.30 X 5 = 1.5 years
- 20.0 + 4.0 + 1.5 = 25.5 years
- The effective age of the structure is 25.5 years
Weighted Age
The weighted age differs from the effective age in that it is used when an improvement has 2 or more "segments," each with a different construction date (as opposed to modernization or remodeling). The age is weighted according to the percentage attributable to each construction date.
This approach may be used when the quality of construction is the same for both the original building and the addition(s). For example:
- A 10,000 square foot building was constructed in 1977. An addition built in 1987 is of equal quality. The addition is 2,000 square feet. The total square footage is therefore 12,000.
- 10,000 ÷ 12,000 = 83.3% is original improvement
- 2,000 ÷ 12,000 = 16.7% is original improvement
- 0.833 X 1977 = 1646.84
- 0.167 X 1987 = 331.83
- 1646.84 + 331.83 = 1978.67
The weighted age of the building is
1978.67, rounded to 1979. If an improvement has both remodeling and additions of differing ages, the effective age of the modernized portions is calculated first, then a weighted age of the entire improvement is calculated.