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  #1  
Old 10-19-2011, 01:25 PM
miker5150 miker5150 is offline
 
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Default lower than expected appraisal

I am currently refinancing our home and recently had the appraisal completed. We refinanced previously in June 2009 and the home appraised at $230,000. Since then we have added improvements with the highlights being all new triple pane windows and a high efficiency furnace. With that in mind and the fact that our market has remained stable (current appraisal states as such), we were surprised when the most recent appraisal came in at $215,000.

Long story short (I can fill in details as needed but don't want to be too long winded), the main issue is the previous appraisal listed the GLA as including both lower and main levels, which are both completely above grade. The house is set up functionally as a bi-level with the kitchen, dining, living, 3 bedrooms and bath on the upper level and family room, 4th bedroom, bath and laundry on the lower level, again all completely above grade. The garage is built in and you step up one step from the garage to enter the lower level of the house. The main entry to the home is on the lower level on grade. Total GLA 2131 sq ft. Comps were similarly sized 2 story homes. The appraiser added an addendum which stated "ALTHOUGH THE SUBJECT IS LISTED AS A BI LEVEL ON THE MLS IT IS ALL ABOVE GRADE AND
IS CONSIDERED A 2 STORY DWELLING".


The current appraisal describes the home as a mid-level style and lists the GLA as 1322 sq ft with 775 sq ft finished basement. Seems that is what accounts for the lower value even with the improvements in a stable market. Comps were all other mid-levels or what seem to be split entry foyers or tri-levels.

Who's right?

Full disclosure, this same scenario(upper level only included in GLA) happened when we refinanced shortly after purchasing the home in 2002, I can't recall the exact details but the loan ended up going through even though it appraised at $2000 less than we paid for it 6 months prior. We also refinanced in 2004 but I don't recall the issue coming up, it's possible an appraisal wasn't required.

Last edited by miker5150 : 10-19-2011 at 01:31 PM.
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  #2  
Old 10-19-2011, 01:38 PM
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Regardless of the correct/incorrect interpretation of the design/above grade area of your home, it appears that the appraiser correctly used SIMILARLY DESIGNED homes when comparing your home.

A picture of your home (removing any address numbers to keep it confidential) will help determine what style of home and what floors should be counted towards above ground living area/gla.
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  #3  
Old 10-19-2011, 02:33 PM
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Smokey Bear Smokey Bear is offline
 
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Was any part of the lower level below grade? Even by a few inches?
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  #4  
Old 10-19-2011, 03:11 PM
miker5150 miker5150 is offline
 
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I'll upload some pics from the current appraisal in a bit. There is a flower bed on the NE corner of the house that was added by the previous owner that I guess could give the illusion of that part of the house being below grade; it isn't.
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Old 10-19-2011, 03:51 PM
miker5150 miker5150 is offline
 
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http://www.box.net/shared/nmmkt8vq1u7kq9gxgf71
  #6  
Old 10-19-2011, 07:39 PM
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Looks like a raised ranch and I would include both levels, obviously minus the garage, in the gla. I would also attempt to compare it to other raised ranches. If those are limited in number, a 2-story could be used but it would either have to be without a basement level or an adjustment would be warranted. In the June 2009 appraisal, did the 2-story comparables have basements also?
  #7  
Old 10-20-2011, 02:24 AM
realbiz realbiz is offline
 
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Here I would suggest the owner go to the city building department and pull the records for your home. This will tell them the square footage of the house. Not knowing your area I don't know how building records are kept. I hope someone local comes on here and helps you out. If you are able to pull the building records of your home I would suggest you keep them on file for future use. You need to know one way other the other if this is livable square footage or a basement.
  #8  
Old 10-20-2011, 09:28 AM
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Quote:
Originally Posted by realbiz View Post
Here I would suggest the owner go to the city building department and pull the records for your home. This will tell them the square footage of the house. Not knowing your area I don't know how building records are kept. I hope someone local comes on here and helps you out. If you are able to pull the building records of your home I would suggest you keep them on file for future use.
So you rely on the local assessment office to determine gla?

Quote:
Originally Posted by realbiz View Post
You need to know one way other the other if this is livable square footage or a basement.
Yes, I agree and you can do this much easier by utilizing ANSI Z765. Measure the outside of the house and count all space ENTIRELY above grade as gla with the exception of garage and unfinished space.
  #9  
Old 10-20-2011, 10:49 AM
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The windows of that lower level look awfully low not to be below grade at least a bit. Are you sure it's not at least partially below grade? In my market, even a small section of a lower level being below grade makes it a basement.
  #10  
Old 10-20-2011, 12:18 PM
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Calvin the Airedale Calvin the Airedale is offline
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Quote:
Originally Posted by miker5150 View Post
I am currently refinancing our home and recently had the appraisal completed. We refinanced previously in June 2009 and the home appraised at $230,000. Since then we have added improvements with the highlights being all new triple pane windows and a high efficiency furnace. With that in mind and the fact that our market has remained stable (current appraisal states as such), we were surprised when the most recent appraisal came in at $215,000.

Long story short (I can fill in details as needed but don't want to be too long winded), the main issue is the previous appraisal listed the GLA as including both lower and main levels, which are both completely above grade. The house is set up functionally as a bi-level with the kitchen, dining, living, 3 bedrooms and bath on the upper level and family room, 4th bedroom, bath and laundry on the lower level, again all completely above grade. The garage is built in and you step up one step from the garage to enter the lower level of the house. The main entry to the home is on the lower level on grade. Total GLA 2131 sq ft. Comps were similarly sized 2 story homes. The appraiser added an addendum which stated "ALTHOUGH THE SUBJECT IS LISTED AS A BI LEVEL ON THE MLS IT IS ALL ABOVE GRADE AND
IS CONSIDERED A 2 STORY DWELLING".


The current appraisal describes the home as a mid-level style and lists the GLA as 1322 sq ft with 775 sq ft finished basement. Seems that is what accounts for the lower value even with the improvements in a stable market. Comps were all other mid-levels or what seem to be split entry foyers or tri-levels.

Who's right?

Full disclosure, this same scenario(upper level only included in GLA) happened when we refinanced shortly after purchasing the home in 2002, I can't recall the exact details but the loan ended up going through even though it appraised at $2000 less than we paid for it 6 months prior. We also refinanced in 2004 but I don't recall the issue coming up, it's possible an appraisal wasn't required.
Saying the market is and has been stable for any length of time in the immediate past is not the same thing as saying prices have not declined since your purchase or even since 2009. In fact, if your market has not experienced some price decline since either date, it is one of the few places in America that has been so lucky.

Bear in mind you are comparing one opinion to another opinion. Both the 2009 valuation and the current valuation may be entirely appropriate, the authors may just differ on what they report as living area and in the manner in which they conduct the comparison.

IOW, both reports may be credible. The fact that you are disappointed with the current opinion of value says nothing about the appropriateness of either opinion.
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