What a property condition report covers
A property condition report is a written record of a building's physical state. On commercial deals, the inspection behind it is called a property condition assessment.
For houses, a condition score gives a faster first pass. It grades the house from its property photos, from excellent and good down to outdated and poor. A full commercial report covers these parts.
- Building systems: a walk-through survey checks the roof, plumbing and electrical systems.
- Records: the assessor reviews the building's records and repair history.
- Immediate repairs: a table lists what needs fixing now.
- Replacement reserves: a second table sets money aside for parts that wear out in the coming years.
A real example from a Homesage.ai report
We pulled the condition score for a single-family house in Fort Wayne, Indiana. It was listed for sale when we ran the search on 2026-10-03.
| What the data shows | This house |
|---|---|
| Condition score | Outdated |
| List price | $196,900 |
| Estimated current value | $212,611 |
| Estimated ARV | $243,150 |
| 70% rule ceiling, before renovation | $170,205 |
The condition score reads the property photos and grades the house. The scale starts at excellent and good, and outdated is the next step down. This house sits there, so it needs updating before it sells at full value.
The estimated ARV is $243,150, which is $46,250 above the list price. That spread has to pay for the renovation, the closing costs and your profit. Our guide to after-repair value defines the term.
At the list price, this house fails the 70% rule by $26,695 before a single dollar of renovation.
A common flipper test is the 70% rule. Kiavi's guide to the 70% rule caps the purchase price at 70% of the after-repair value minus estimated renovation costs. Here, 70% of $243,150 is $170,205, so your offer starts below that figure.
The estimated current value is $212,611, or $15,711 above the list price. A buyer who plans to live there sees a fair price. A flipper sees a thin margin.
How investors use a property condition report
- Filter by condition first. In Investment Property Search, pick outdated or poor to see only houses that need work.
- Check the spread. Subtract the list price from the estimated ARV to see how much room the deal has.
- Apply the 70% rule. Multiply the estimated ARV by 0.7, then subtract the estimated renovation cost.
- Book an inspection inside your contingency period. Photos do not show wiring or plumbing inside the walls.
What changes the condition picture
The property type decides which report you need. For commercial real estate, the ASTM E2018-24 standard guide sets a baseline process built on a walk-through survey. Partner ESI's glossary notes that the report carries an immediate repairs table and a replacement reserves table.
House age moves the grade. The median owner-occupied US home reached 42 years in the 2024 American Community Survey. NAHB adds that older homes are more likely to need repairs, upgrades and renovations.
State law adds a seller form in some places. Wisconsin sellers must give buyers a real estate condition report within 10 days of accepting an offer. DeWitt LLP's overview of Wisconsin condition reports covers the deadline and the buyer's right to rescind.
No report removes every risk. The ASTM guide states that no assessment can wholly eliminate uncertainty about physical deficiencies. Use the photo score to sort houses fast, then use an inspection to confirm one. Our post on how valuation models read property condition covers the photo side.
Common condition report mistakes to avoid
- Ordering the wrong report: An ASTM E2018 assessment is built for commercial property, with repair and reserve tables. For a house, use a condition score to sort and a home inspection to confirm.
- Reading the condition score as an inspection: The score comes from property photos, and photos do not show wiring or plumbing inside the walls. Book an inspection inside your contingency period.
- Offering the list price on an outdated house: On our Fort Wayne example, the $196,900 list price sits $26,695 above the 70% rule ceiling. That gap appears before you pay for any renovation.
- Treating the spread as profit: The $46,250 between the estimated ARV and the list price pays for the renovation, closing costs and profit. Subtract the estimated renovation cost before you count any gain.
Estimated values. Not investment advice. Data as of 2026-10-03.
Frequently asked questions
What is the difference between a property condition report and an appraisal?
What does a property condition report look like?
What is a property condition assessment?
Is a real estate condition report required in Wisconsin?
How do you assess a property's condition before making an offer?
Ask Sage for a condition score
Sage, our assistant, pulls the condition score and estimated value for any US address from inside the AI tool you already use.
- Homesage.ai search with condition score and value estimate for a house in Fort Wayne, Indiana, pulled 2026-10-03.
- NAHB Eye on Housing, age of housing stock by state, published 2026-03-25.
- ASTM E2018-24, standard guide for property condition assessments.
- Partner ESI, property condition assessment or report.
- Kiavi, the 70% rule in house flipping, updated July 2026.
- DeWitt LLP, Wisconsin real estate condition reports, published 2021-05-26.
