Split levels, UAD/CU & Below Grade Living Areas

[timd354]

No, it does not have a basement. It has a lower level below the 2nd floor. That is not a basement. Buyers in N.W. Ohio do not treat it as a basement. Realtors in N.W. Ohio do not treat it as a basement, nor do the auditors/assessors in this area. They all include that lower level in the overall GLA of the home. A basement, if this property had one, (which is doesn't) would be below the ground floor level, which is next to the attached garage. I am not unaware of how to appraise this type of property, nor I am confused as to how adequately describe the home. I can easily separate out that lower level, and even place it in the "Finished areas rooms below grade" section of the URAR. My problem is that Fannie Mae is forcing me to describe this lower level as a finished basement, when it is not. I have to write a long explanation as to why I'm separating this lower level out, then another as two why I'm making no adjustments for "basements" for comparable properties on a crawl space/slab. Prior to UAD, I could easily describe this home, place the GLA where it belongs, and all would be well. But I can't, and it's very frustrating.

You should write a long explanation of why you are including what is obviously a below grade area in the overall above grade GLA. While Fannie guidelines do allow the appraiser to deviate from the typical approach of only including above grade areas in the GLA when appropriate, Faannie guidelines have always required the appraiser to be consistent to explain the reason for the deviation. So quit your crying and do what you are supposed to do and what you should have always been doing and give an adequate explanation for what you are doing

 

[residentialguy]

Tim, that's for rare exceptions, like a reverse floor plan. I'm sorry but a 3 level split is not all of the sudden equal to a 1 1/2 story, which is what lame re agents will try to paint on listings to mislead that it's a larger house. Works until the buyers pull up to the house.

 

[The Bob]

Gross Living Area
The most common comparison for one-unit properties, including units in PUD, condo, or co-op 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. The need for consistency also applies from report to report. For example, when using the same transaction as a comparable sale in multiple reports, the room count and gross living area should not change.

When calculating gross living area

• The appraiser should use the exterior building dimensions per floor to calculate the above-grade gross living area of a property.
• For units in condo or co-op projects, the appraiser should use interior perimeter unit dimensions to calculate the gross living area.
• Garages and basements, including those that are partially above-grade, must not be included in the above-grade room count.

Only finished above-grade areas can be used in calculating and reporting of above-grade room count and square footage for the gross living area. Fannie Mae considers 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 & Finished Rooms Below-Grade line in the Sales Comparison Approach adjustment grid.

For consistency in the sales comparison analysis, the appraiser should compare above-grade areas to above-grade areas and below-grade areas to below-grade areas. The appraiser may need to deviate from this approach if the style of the subject property or any of the comparables does not lend itself to such comparisons. For example, a property built into the side of a hill where the lower level is significantly out of ground, the interior finish is equal throughout the house, and the flow and function of the layout is accepted by the local market, may require the gross living area to include both levels. However, in such instances, the appraiser must be consistent throughout the appraisal in his or her analysis and explain the reason for the deviation, clearly describing the comparisons that were made.

#1. I believe the OP is clearly dealing with below grade living area.

#2. I think it would be appropriate to "deviate" in this case since he has no way of knowing for sure what the below grade area is with similar split level comps, which he clearly stated the assessor includes in the GLA.

 

[Jim Onderisin]

It's a basement. Real estate agents sometimes try to include its area in gross living area around here, too, but they don't get away with it in mappraisal.

 

[ucbruin]

Based upon I'm a freakin smart guy . That the lower level of that kind of split is limited. What's it cost to finish a family rm and bath...10k? So the family room is 10% smaller...you think that's going to be a significant variance???

You are wicked smat.

 

[Steelers74]

Here, due to the style of the home and the way our market treats it, this home does not have a basement. The market treats it as GLA and the Auditor taxes as GLA, however, the most important factor is that the market treats it as GLA due to its style, this is an acceptable deviation. ANSI needs to be updated regarding these style homes in my opinion. Finished basements are clearly different from these style of homes and the market knows it. I have spoken with our state assistant AG about this before and she clearly stated that it was ok to include it as GLA due to its style and the way the market treats it and only to maintain consistency. Since it is the State that would handle any issue regarding this, I'm gonna hang my hat on what my State has confirmed with me. I include it as GLA and explain since not including it is misleading to anyone in this area. Also, if not included, the price per square foot and comparable market GLA adjustment factors would be far out of the typical neighborhood ranges as well as for the room utility.

 

[Mr Rex]

Earthworms on the other side of the wall is a basement: aka below grade. I've never seen an above grade wall bleed ground water when the ground gets saturated. Denial doesn't make it a river in Egypt or above grade GLA. What type of siding do you report for below grade areas?

 

[Steelers74]

Misleading is a greater appraisal sin and worshiping the false ANSI idol does not change how the market treats real estate. The earthworm test would not work here either on the $400,000 to $1.2 million built along the river down the slope. Per the earthworm test some of these would be million dollar homes with only 800 sq. ft. GLA, hence MISLEADING. But that is just my opinion, I'll stand by it and defend it competently especially with the approval of my State Assistant AG. Not counting it is acceptable as long as the subject and the comps are treated consistently, however, in our market it is misleading to call it a basement.

 

[KenAZ]

That is the problem appraisers have living in the SW. We live in a completely different box than most of the rest of the country. We do not have melting snow or excessive ground moisture. Basements are more expensive to build than livable areas, and as a result are rare. The split level design is a cheaper way of building a basement. Basements in the SW are highly desired because they are underground and there is less heat, lower cooling bills, more comfortable, etc. I have never seen an unfinished basement in the SW. They are all built with the same quality as the above ground GLA. If the FNMA headquarters was in the SW, the form would be changed. Unfortunately since we are all supposed to be in a box that fits NE climate, we are supposed to separate split levels into Basement and above ground GLA. It is a weakness in the form, along with numerous others weaknesses. The CU will make this even more complicated, because appraisers will have to guess the basement size while others call it GLA.

I am amused that guessing is alright when it comes to GLA, but is not alright when it comes to adjustments.

 

[timd354]

Tim, that's for rare exceptions, like a reverse floor plan. I'm sorry but a 3 level split is not all of the sudden equal to a 1 1/2 story, which is what lame re agents will try to paint on listings to mislead that it's a larger house. Works until the buyers pull up to the house.

Assuming that the comparable sales are all similar 3 level splits, then it would not make a difference to the opinion of value as you would be comparing apples to apples. With the proviso that I do not know the prior poster's market, I agree that typically a 3 level split would not typically be a situation where including above below grade living area in the above grade GLA is correct.