Include In GLA Or Not

[Mike Seward]

Subject was built in the 70's and recently remodeled. During the remodeling process, a bedroom and bath was added to the rear of the house. To gain access to this bedroom and bath, one must walk outside through a sliding glass door in the family room, onto an open patio, then through an exterior door.

Two appraisers appraised this property. (Relocation appraisal). I did not include the bedroom and bath in the overall GLA because one must walk outside in the elements to gain access to it. I called it an inlaw unit and and put it at the bottom of the grid, making market derived adjustments. I did this because my undertanding of FNMA guidelines is that to be counted as overall GLA there must be contiguous access to the area. I believe USPAP says we must follow FNMA guidelines.

The other appraiser counted the added bedroom/bath in the overall bedroom/bath GLA count. When pressed by the client as to why, the appraiser said " while access to the rooms is separate from the other areas of the house, in this market, this is not considered an inlaw suite. It is not marketed as such, nor does the typical buyer expecation condider this a separate in law suite."

Should it be included in overall GLA/bedroom/bath count or not?

Thanks for your thoughts.

 

[JTip]

To gain access to this bedroom and bath, one must walk outside through a sliding glass door in the family room, onto an open patio, then through an exterior door.

It is typical for that area to have this type of improvement permitted or unpermitted; that would be my first question.

the appraiser said " while access to the rooms is separate from the other areas of the house, in this market, this is not considered an inlaw suite. It is not marketed as such, nor does the typical buyer expecation condider this a separate in law suite."

Looks like he/she forgot to address why it was includedin in the overall GLA.

I would handle it like you did. Not overall GLA but worthy of a line item. USPAP has nothing to do with FNMA.

If you dig around you can find the appropriate verbiage regarding GLA/access or wait for the other members to rise and shine. Someone has it. I need coffee.

 

[J Grant]

It should not be included in GLA. The other appraiser was wrong. Marketing and market acceptance does not change the physical fact that the area is not accessible from inside the dwelling .

I may not have called it an in law unit but that 's a label.

 

[Restrain]

You were right. Seen utility baths in garages, exterior pool baths, none of which are part of the GLA.

 

[Tom Woolford]

Has value, but not GLA.

 

[Mr Rex]

USPAP has nothing to do with FNMA and FNMA has nothing to do with ERC/Relo.

 

[Mark K]

When pressed by the client as to why, the appraiser said " while access to the rooms is separate from the other areas of the house, in this market, this is not considered an inlaw suite. It is not marketed as such, nor does the typical buyer expecation condider this a separate in law suite."

Should it be included in overall GLA/bedroom/bath count or not?

1. Set F/F guidelines aside for a relo appraisal and try to better understand the relationship or lack thereof between Fannie and USPAP.

2. I'm not in your area but around here, the market would have something to say about this floor plan and it would be negative. I personally would not include it in the GLA and address it as you have as in-law suite or something similar.

If someone wanted to include it in the GLA then a negative adjustment for the inferior functional utility would be in order.

Of course, if your comps have the same floor plan all of the above is moot but I'm guessing the comps have more traditional floor plans.

 

[Mike Kennedy]

Detached Guest BR + FB = Additional Amenities (not GLA) which may or may not 1. be compliant with Muni Bldg & Zoning Ordinances and 2. may or may not have Contributory Value AS indicated by the Competitive Market.

 

[Ms. Janet]

The "other appraiser" can say that if he has data to back it up. Is it typical in the market so you have sales that are similar with a bedroom and bath detached? To prove a market for the atypical design and construction?
If not, there's your answer

 

[Mark K]

[QUOTE="Mike Seward, post: 2600659, member: 66283"During the remodeling process, a bedroom and bath was added to the rear of the house. [/QUOTE]


I'm not reading this as being Detached but rather Attached with exterior access, in the same manner as an attached garage without an access door via a common wall to the home interior, but not freestanding detached.

Maybe the OP can clarify.