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Old 03-17-2003, 10:36 AM
GaryDodd GaryDodd is offline
Join Date: Oct 2002
Location: Galena, Oh

Posts: 5

I'm getting different stories on whether I can count below grade finished area as living space. I have done many appraisals with finished basements and have not counted the living space as GLA per ANSI std (04/08/1996). However, I will be doing an appraisal later today on a subject where the children's bedrooms are ACTUALLY in the finished basement. I asked what the upstairs bedrooms are being used for, and they said exercise room and tanning room. SO, since they are actually living in the below grade finished area, can I count this as GLA???? Also, its not a customary practice for this to occur in this area. THANKS!
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Old 03-17-2003, 11:29 AM
Mountain Man Mountain Man is offline
Join Date: Jan 2002
Location: GA
State: Georgia
Professional Status: Certified General Appraiser
Posts: 15,448

Also, its not a customary practice for this to occur in this area.
That's the key to your answer. Call it what it is, not how THEY are using it.
In my area, due to the mountains, we have many "one bedroom" homes. The real estate people list them as 3 or 4 bedrooms, but they are not. The finished basement is almost always of a lesser quality finish compared to upstairs.
Old 03-17-2003, 12:17 PM
Dave Smith's Avatar
Dave Smith Dave Smith is offline
Join Date: Jan 2002
Location: Sister Bay, Door County, Wisconsin
State: Wisconsin
Professional Status: Certified Residential Appraiser
Posts: 1,564


This is straight from the Fannie Mae guidelines. Read it closely and you will have the answer to your questions.

Section 405.06 Gross Living Area

The most common comparison for one-family properties (including units in PUD, condominium, or cooperative projects)
is above-grade gross living area. The appraiser must be consistent when he or she calculates and reports the
finished above-grade room count and the square feet of gross living area that is above-grade. For units in
condominium or cooperative projects, the appraiser should use interior perimeter unit dimensions to calculate the
gross living area. In all other instances, the appraiser should use the exterior building dimensions per floor to
calculate the above-grade gross living area of a property. Only finished above-grade areas should be used--garages
and basements (including those that are partially above-grade) should not be included. We consider a level to be
below-grade if any portion of it is below-grade-regardless of the quality of its "finish" or the window area of any room.
Therefore, a walk-out basement with finished rooms would not be included in the above-grade room count.
Rooms that are not included in the above-grade room count may add substantially to the value of a
property-particularly when the quality of the "finish" is high. For that reason, the appraiser should report the basement
or other partially below-grade areas separately and make appropriate adjustments for them on the "basement and
finished areas below-grade" line in the "sales comparison analysis" grid. To assure consistency in the sales comparison
analysis, the appraiser generally should compare above-grade areas to above-grade areas and below-grade areas to
below-grade areas. The appraiser may deviate from this approach if the style of the subject property or any of the
comparables does not lend itself to such comparisons. However, in such instances, he or she must explain the reason
for the deviation and clearly describe the comparisons that were made.
Old 03-17-2003, 01:21 PM
Pamela Crowley (Florida)'s Avatar
Pamela Crowley (Florida) Pamela Crowley (Florida) is offline
Join Date: Jan 2002
Location: Wherever We Are Parked
State: Florida
Professional Status: Retired Appraiser
Posts: 25,254

Just one more little add on:

It really doesn't matter what the current occupants are using each room for. You have bedrooms upstairs, if this house was vacant - you wouldn't even question this issue. They have bedrooms upstairs and finished rooms in the basement. Not even a functional problem.

I just hate it when I start over-analyzing when I don't have to.... and tend to do that toooo often. Vacant houses are easier.
Now, just give yourself the old palm to the forehead "Duh" and finish the report.
All that is necessary for the triumph of evil is that good men/women do nothing.
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Old 03-17-2003, 03:22 PM
Jo Ann Meyer Stratton's Avatar
Jo Ann Meyer Stratton Jo Ann Meyer Stratton is offline
Join Date: Jan 2002
Location: Safford, Arizona
State: Arizona
Professional Status: Certified Residential Appraiser
Posts: 6,326

Fannie Mae's sentence toward the end of that section about consistency is the key. If you can find all comparables with similar below grade levels and know what the square footage of each level is, then above grade on one line, below grade on another line. If you can not find out how much square footage is on each level from anybody, and you can not go measure each comparable and tromp through the interior of those homes, you might have to report all areas on one line so that you will be consistent. And then you provide lots and lots of explanations and then some more explanations. But the two important things are to be consistent and explan.
Old 03-17-2003, 04:05 PM
Tim Hicks (Texas)'s Avatar
Tim Hicks (Texas) Tim Hicks (Texas) is offline
Join Date: Jan 2002
Location: Crowley
State: Texas
Professional Status: Certified Residential Appraiser
Posts: 11,949

What's a basement? Just kidding. The answer is "not above grade living area". Hopefully there are like/ind properties in the neighborhood and you can find other homes with basements to compare it to. No matter how well finished, you should count it as "below grade". Here in TX, there are few basement homes, but we are required to provide similar style homes with similar finished basements when we do appraise one. Luckily, where there is one, there are usually others. Not too many, but at least one.
Old 03-17-2003, 04:48 PM
Mike Garrett, RAA's Avatar
Mike Garrett, RAA Mike Garrett, RAA is online now
Join Date: Jan 2002
Location: Colorado Springs, CO
State: Colorado
Professional Status: Certified Residential Appraiser
Posts: 21,059

Finally an easy question......"NO!!!!!".
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