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  #1  
Old 06-23-2009, 01:15 PM
bbr711 bbr711 is offline
 
Join Date: Jun 2008
State: Tennessee
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Default Above Grade / Below Grade

Appraising a home with 1,620-sf above grade and the same below grade, all finished in similar quality and style.

Trouble is that the home is an owner-built custom which has the following above-grade rooms: kitchen, dining room, family room, 1/2-bath, and master suite. Below grade are 2 more bedrooms, full bath, a media room, an office, and a den.

I'm curious as to how other appraisers handle the 1-bedroom above-grade situation when no comps are to be found with similar room count.

Thanks!
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  #2  
Old 06-23-2009, 01:50 PM
Don Clark's Avatar
Don Clark Don Clark is offline
 
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Location: Virginia Beach, Virginia
State: Virginia
Professional Status: Certified Residential Appraiser
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Default

Quote:
Originally Posted by bbr711 View Post
Appraising a home with 1,620-sf above grade and the same below grade, all finished in similar quality and style.

Trouble is that the home is an owner-built custom which has the following above-grade rooms: kitchen, dining room, family room, 1/2-bath, and master suite. Below grade are 2 more bedrooms, full bath, a media room, an office, and a den.

I'm curious as to how other appraisers handle the 1-bedroom above-grade situation when no comps are to be found with similar room count.

Thanks!
Find comparables as similar as possible with whatever number of bedrooms above grade, but with additional areas used for similar purposes below grade. Remember, just because some rooms are below grade does not mean that they are not as valuable as rooms aboive grade. It is Fannie Mae and others that decided that there is a difference in rooms above and below grade. The market, some markets, do not see it that way.

But then, i am speaking theoritically. I live in a market where basements and rooms below grade are as rare as hen's teeth. But, I do have enough to know that is the way I look at the overall quality of a property. The market itself may show little difference in reaction to where the space is, as long as it is functional and provides a quality area in which to reside.
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  #3  
Old 06-23-2009, 09:15 PM
DMZwerg's Avatar
DMZwerg DMZwerg is offline
 
Join Date: Mar 2009
State: Wisconsin
Professional Status: Certified Residential Appraiser
Posts: 4,427
Default

Quote:
Originally Posted by bbr711 View Post
Appraising a home with 1,620-sf above grade and the same below grade, all finished in similar quality and style.

Trouble is that the home is an owner-built custom which has the following above-grade rooms: kitchen, dining room, family room, 1/2-bath, and master suite. Below grade are 2 more bedrooms, full bath, a media room, an office, and a den.

I'm curious as to how other appraisers handle the 1-bedroom above-grade situation when no comps are to be found with similar room count.

Thanks!
I would compare it with 1620sf+/- GLA above grades.
If possible use comps with at least partial finished basements (and especially good if you can find any matched pairs between comps).
Adjust equally for rooms both above and below grade if that is what the market tells you or by whatever ratio or factor the market indicates (in most of my local markets it is 50% for below grade, but some are closer to 100%).

If all else fails then maybe the Competency Rule applies and you can cancel the order?

Good luck!
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  #4  
Old 06-23-2009, 11:20 PM
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38Scarcello 38Scarcello is offline
 
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Location: Seattle, Washington
State: Washington
Professional Status: Certified Residential Appraiser
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Default

"In my professional opinion" I think that would be low(er) on your priority list.
I have not been picked on for same bedroom count above grade in a long
time. They want recent and within a close proximity. If U/W conditions you
for it, write an addendum saying "There aren't any". Spell check it, sign it,
and send the damn thing!
  #5  
Old 06-24-2009, 07:29 AM
Ray Christ's Avatar
Ray Christ Ray Christ is offline
 
Join Date: Apr 2002
Location: Wisconsin
State: Wisconsin
Professional Status: Certified Residential Appraiser
Posts: 97
Smile Above Vs Below Grade

I found the attached by Henry Harrison several years ago and use it as a guideline particularly when there is only 1 bedroom above grade. I also provide the following explanation in the report addenda >

"Because of the style of the home and the way agents report the living area in the MLS he appraiser has selected the option to include that portion of the lower level in the GLA measurement that is at least 50% above grade and is classified as has normal size windows
With this option to include the area in the GLA measurement elected special care is taken to be consistent throughout the form. We will not use the basement space on the room list."

I have never in 16 years had an UW question it.

Explaining what you do in detail is always helpful.
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  #6  
Old 06-24-2009, 08:02 AM
Restrain Restrain is offline
 
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Location: Denton, Texas
State: Texas
Professional Status: Certified General Appraiser
Posts: 10,286
Default

The easy answer is, find comps like the subject. Well, DUH! That obvious statement made, the problem is that there is an inconsistency in a lot of MLS and tax reporting as to above grade vs. total GLA. The only real answer is to analyze the sales in the market and try to find the most comparable sales, try to analyze any bedroom differentials, GLA above/below grade, walkout vs. non-walkout, etc.

Good luck.
  #7  
Old 06-24-2009, 12:33 PM
Mile High Trout Mile High Trout is offline
 
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State: Colorado
Professional Status: Certified Residential Appraiser
Posts: 10,682
Post Variable approaches

In Colorado, above and below grade reporting will change from area to area. It's important to double check each proposed comparable with city records. In areas where these issues with high quality below grade living happen, realtors may indeed report that as above grade just because.
  #8  
Old 06-24-2009, 12:51 PM
Thomas Fiehler Thomas Fiehler is offline
 
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Location: Cincinnati,OH
State: Ohio
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Default

What the he!! is the problem. If any part of a level is below grade then the entire level is below grade. Just because HH said, or rather wrote it, doesn't make it right. If your state recognizes ANSI, then that is a direct contradiction to that methodology. If its basement then call it basement and explain, explain, explain. I honestly don't understand why this pops up every couple weeks when its so darn simple to understand.
  #9  
Old 06-24-2009, 12:52 PM
Webbed Feet's Avatar
Webbed Feet Webbed Feet is offline
 
Join Date: Feb 2005
Location: City of Free Speech
State: Other Non-US
Professional Status: Certified Residential Appraiser
Posts: 12,058
Default

Quote:
Originally Posted by bbr711 View Post
Appraising a home with 1,620-sf above grade and the same below grade, all finished in similar quality and style.

Trouble is that the home is an owner-built custom which has the following above-grade rooms: kitchen, dining room, family room, 1/2-bath, and master suite. Below grade are 2 more bedrooms, full bath, a media room, an office, and a den.

I'm curious as to how other appraisers handle the 1-bedroom above-grade situation when no comps are to be found with similar room count.

Thanks!
Asking how to handle an appraisal analyses, and how to handle unreasonable underwriters, is not the same thing. And I suspect you are really asking about the later, not the former. Let us know.

Also, I personally would be very careful if using Henry Harrison quotes out of context regarding my subject's situation and market. Tossing a hole in the ground basement into the GLA for no other reason besides dinking around with making it appear the GLA has more than one bedroom was NOT what I suspect Mr. Harrison was writing about at the time. If he was, he's free to post here, say so, and correct my lack of faith in that....
  #10  
Old 06-24-2009, 01:02 PM
Webbed Feet's Avatar
Webbed Feet Webbed Feet is offline
 
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State: Other Non-US
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Posts: 12,058
Default

Quote:
Originally Posted by Thomas Fiehler View Post
What the he!! is the problem. If any part of a level is below grade then the entire level is below grade. Just because HH said, or rather wrote it, doesn't make it right. If your state recognizes ANSI, then that is a direct contradiction to that methodology. If its basement then call it basement and explain, explain, explain. I honestly don't understand why this pops up every couple weeks when its so darn simple to understand.
It's because real estate, and markets, are closer to a living thing than any set of arbitrary rules can account for. That's why.

When I am faced with a subject bi-level (Split Entry) that has all it's levels 100% above grade..... But two of my comps of the exact same style each have one back corner of a lower level an entire 1% to 15% below a slightly sloped yard at that one corner.... It becomes not representative of the market to be splitting out 100% of the comps lower levels as "basements" over ANSI standards while blindly adhereing to ANSI for the subject and not doing so with it's lower level. Ya, end up with a screwed up comparison of what the market is reacting to. So, at times, we have to remain flexible, and so does underwriting.

The above does not mean H.H. meant stick a 100% hole in the ground basement footage in GLA, and go comparing it to a 100% above grade two level house with no basement. But he can post what he meant if he so wishes...
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