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#306375 - 09/15/09 11:38 PM What Exactly is Functional Utility??
CALIF DREAMING Offline
Veteran Member

Registered: 08/01/06
Posts: 1281
Loc: Downey, California
I get this question on some BPO's and would put N/A or UNK. Can you guys please weigh in in what this means?
_________________________
"People rarely succeed unless they have fun in what they are doing"....Dale Carnegie

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#306377 - 09/15/09 11:46 PM Re: What Exactly is Functional Utility?? [Re: CALIF DREAMING]
REO Agent NJ Offline
Member

Registered: 04/22/06
Posts: 215
Loc: New Jersey
It has to do with usefullness/ quality of features. For example a basement with really low ceilings has low functional utility as it does not have a potential of being finished into another room or being used for storage etc. Other examples of unfavorable functional utility are small baths, rooms that are accessed through other rooms, slanted second floor ceilings etc.

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#306405 - 09/16/09 02:10 AM Re: What Exactly is Functional Utility?? [Re: REO Agent NJ]
REODayton Offline
Major Contributor

Registered: 07/27/06
Posts: 3720
Loc: Dayton Ohio
It comes down to does the property make sense. I've seen where a duplex is converted into a single residence via cutting out one wall opening. So its essentially 2 houses used as one.

I had a property that was a duplex and the "duplex" portion was a room in the garage that they charged a person rent for. He had access to the rest of the house at scheduled times. Not really a duplex.

It comes down to does the use of space make sense.

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#306440 - 09/16/09 12:11 PM Re: What Exactly is Functional Utility?? [Re: REODayton]
Concepts05 Offline
Veteran Member

Registered: 12/21/05
Posts: 1484
Loc: MA
I know what functional utility is or isn't but can never figure out which way the question should be answered -

Say you have to enter the bedroom through the bath - that, to me, is a LACK of functional utility - so really shouldn't the answer be "no" to functional utility? And if it is "favorable" layout, then the answer should be "yes" as it is utilizing the space properly.

Does this make sense?

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#306443 - 09/16/09 12:34 PM Re: What Exactly is Functional Utility?? [Re: Concepts05]
Grampa Offline
Major Contributor

Registered: 06/30/09
Posts: 2271
Loc: Margaritaville
Functional utility refers to loss of value due to inferior design, obsolescence, or over improvement.

This would include low ceilings (we had a builder many years ago who figured out that he could save $300 per house if he left off one row of blocks in a concrete block house so, we have a group of houses with 7 ft ceilings).

As Concepts05 mentioned having to access a bedroom through a bath (or another bedroom) would be a good example.

Small rooms would be negative for functional utility. In FL if the master BR is on the second floor that would also be negative functional utility due to our demographic of retirees.

If you have a $500,000 home in an area surrounded by $70,000 homes the $500,000 home is an obvious over improvement for the area and thus has negative functional utility.

A small or poorly laid out kitchen would be negative functional utility.
_________________________
"Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind."
Dr. Seuss

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#306458 - 09/16/09 02:57 PM Re: What Exactly is Functional Utility?? [Re: Grampa]
neudot Offline
Major Contributor

Registered: 11/02/07
Posts: 1960
Loc: Central New York
I had an appraiser tell me a ranch style has lower utility than a 2-story house. I disagreed with him...as Grampa mentions above, a 1-story home is often preferred by retirees. Appraiser says ranch is lower utility by appraiser definition. Anyone know?

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#306460 - 09/16/09 03:02 PM Re: What Exactly is Functional Utility?? [Re: neudot]
Concepts05 Offline
Veteran Member

Registered: 12/21/05
Posts: 1484
Loc: MA
Originally Posted By: neudot
I had an appraiser tell me a ranch style has lower utility than a 2-story house. I disagreed with him...as Grampa mentions above, a 1-story home is often preferred by retirees. Appraiser says ranch is lower utility by appraiser definition. Anyone know?


I would think it would depend on the area of the country whether a ranch is more desireable or less. Certainly here in the NE, people do love their 2 story colonials. So if I have to compare a colonial to a ranch, I do make an adjustment.

But...functional utility....I don't know about that. To me that means something really out of the ordinary. Not functionally "proper". A ranch doesn't fit that definition (not mine anyway). An adjustment, maybe. But not a lack of functional utility.

just my 2 cents.


Edited by Concepts05 (09/16/09 03:03 PM)
Edit Reason: clarification

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#306484 - 09/16/09 05:01 PM Re: What Exactly is Functional Utility?? [Re: Concepts05]
Grampa Offline
Major Contributor

Registered: 06/30/09
Posts: 2271
Loc: Margaritaville
The only reason I could see for a 2 story having better functional utility is that you have more square footage of living space using less of the lot and a smaller roof area. More living space in the same footprint. But, in FL they are not looked at that way for sale purposes. I know appraisers have very strict rules so they may have to appraise that way in FL as well but in practice, for us as Realtors, that is not the case.
_________________________
"Be who you are and say what you feel, because those who mind don't matter and those who matter don't mind."
Dr. Seuss

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#306485 - 09/16/09 05:02 PM Re: What Exactly is Functional Utility?? [Re: Grampa]
CandyMan Offline
Major Contributor

Registered: 07/13/08
Posts: 2608
Loc: California
Originally Posted By: Grampa
Functional utility refers to loss of value due to inferior design, obsolescence, or over improvement.

This would include low ceilings (we had a builder many years ago who figured out that he could save $300 per house if he left off one row of blocks in a concrete block house so, we have a group of houses with 7 ft ceilings).

As Concepts05 mentioned having to access a bedroom through a bath (or another bedroom) would be a good example.

Small rooms would be negative for functional utility. In FL if the master BR is on the second floor that would also be negative functional utility due to our demographic of retirees.

If you have a $500,000 home in an area surrounded by $70,000 homes the $500,000 home is an obvious over improvement for the area and thus has negative functional utility.

A small or poorly laid out kitchen would be negative functional utility.



It's ironic to see this thread appear. Last Saturday I had an interior that just blew my doors off. 2,200 GLA, two story.....DOM 204....REO...had 4 offers accepted during this time......all buyers walked. In my entire time in this business, I've never seen a more poorly laid out floor plan. For those of you from my end of the state, you'll understand when I called this the "Winchester House". It appears that the previous owners just added a room when their needs required additional living area. The subject started off as a one story (I think, lol). A room addition on one side of the subject blocked access to the 2 car detached garage (now a 10 motorcycle garage). When they ran out of room to build out, they built up (2nd story). The stairs were pitched more for attic access, rather than living area. The steps were so narrow you had to "tip toe" to the second level. The second level was more functional than the first. The only problem were the ton of building code violations......just can't seem to win on this one...lol. There was no flow to the floor plan.....And, to top it off, most rooms were painted a different color.......kind of made me feel I was at an old "Standard Brands" paint store.

This order has been sitting in QC since Sunday. I'm beginning to think that they are still "rolling on the floor" from reading my comments, or trying to "connect the dots" from the photos supplied.

Next week, this property is going to auction.......I'll be surprised if it has any takers.
_________________________
PONDERISM:

"Life isn't about waiting for the storm to pass........It's learning how to dance in the rain".

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#306556 - 09/16/09 11:24 PM Re: What Exactly is Functional Utility?? [Re: CandyMan]
LizL Offline
Major Contributor

Registered: 08/27/05
Posts: 1780
Loc: Missouri
I usually answer the Functional Utility question with poor, average, or good.

Nowadays, having a laundry in an unfinished basement is functionally obsolete, so that house would take a hit on functionality. Older houses that have bedrooms with no closets would be one example of poor functional utility.
_________________________
Broker/Owner, REALTOR«,GRI, ABR
REO listing/selling since 2004; BPOs only for current clients

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#306579 - 09/17/09 01:52 AM Re: What Exactly is Functional Utility?? [Re: LizL]
JackREO Offline
Veteran Member

Registered: 09/02/08
Posts: 849
Loc: Massachusetts
This is also known as functional obsolesence. I googled it for a full explanation.
Generally when the functional utility slot comes up I answer it as adequate or if it's inadequate, I explain why.


Edited by JackREO (09/17/09 01:53 AM)

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#306580 - 09/17/09 01:54 AM Re: What Exactly is Functional Utility?? [Re: LizL]
Concepts05 Offline
Veteran Member

Registered: 12/21/05
Posts: 1484
Loc: MA
Originally Posted By: lizl
I usually answer the Functional Utility question with poor, average, or good.

Nowadays, having a laundry in an unfinished basement is functionally obsolete, so that house would take a hit on functionality. Older houses that have bedrooms with no closets would be one example of poor functional utility.


I never thought of an answer besides "yes" or "no". Yours make more sense.

(slapping myself on side of head...duh)

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#306718 - 09/18/09 01:15 AM Re: What Exactly is Functional Utility?? [Re: Concepts05]
REO driven Offline
Veteran Member

Registered: 06/21/07
Posts: 740
Loc: In the cornfield
Poor functional utility would be front door leading directly to bathroom or Bathroom being small building at rear with half moon on it.

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#306726 - 09/18/09 02:16 AM Re: What Exactly is Functional Utility?? [Re: REO driven]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 6304
Loc: Vermont's North-East Kingdom
Now I've got it! You just reminded me.

A few years ago, I had a listing with a Combo Utility/Laundry Room that was also equipped with a "High Rise" Commode and a TV.

So, now I know it was a Highly Functional Utility/Laundry room AND ╝ Bath. The Lady of the House told me that she had it set up that way so that she could just sit down there and fold laundry while she watched her Soap Operas. She was a real multi-tasker !

Like I need to know that ? So, it's just Functional Utility. I never explained the Functional Utility to any Prospective Buyers. I figured they could think about it for themselves. It's like feng shui . . . . how do you go about explaining a room with good feng shui ? Just like rooms with good Functional Utility, I guess? Those who understand will know.

And, those who don't, won't !

Now I have to think of how to describe this room in a BPO. It's not just your regular TV Room and ╝ Bath. . . . it was where all the action was. A Functional Utility.
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#306733 - 09/18/09 03:33 AM Re: What Exactly is Functional Utility?? [Re: Vermont]
REO driven Offline
Veteran Member

Registered: 06/21/07
Posts: 740
Loc: In the cornfield
I am trying to visualize the room....on 2md thought...Nawww

feng poo best describes it

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