Basement Vs. No Basement

[ChinnyChinChin]

I just recently had an appraisal completed which seems a little off to me. We have 2200 sq/ft above grade and about 1800 sq/ft of finished basement. Our appraiser only used comps that were 2000-2300 sq/ft homes with no basements...so obviously the sale prices were MUCH lower. He told me he doesn't think a 2600 sq/ft house with no basement is a comp and therefore my value was much lower. $35k lower than i paid in 2006...an appraisal which he also did. Any insight on this? I have a number of comps in the area that are 400-500 sq/feet larger with no basements which sold for more than my appraised value...I'd love to use those comps.

 

[Joe Flacco]

The 2600 SF house with basement is better than your house and your house is better than the 2000-2300 SF house without basement so common sense would say that your house is worth somewhere in between. I think most appraisers would probably include both.

 

[ChinnyChinChin]

The 2600 SF house with basement is better than your house and your house is better than the 2000-2300 SF house without basement so common sense would say that your house is worth somewhere in between. I think most appraisers would probably include both.

Kind of what I was thinking too. I have 2 homes within 1/4 mile that are 2600 and 2700 both both without basements that sold for more than my appraised value. I asked why he didn't include such nice new comps and he said they aren't comps.

 

[Joe Flacco]

I don't know. Maybe they are not comps. There is more to value than size of the house.

Cross out the appraisers name and post it. I am sure someone from Georgia will look at it.

 

[Michigan CG]

How old is your house? How much did he adjust for the lack of basements in the comparables?

You bought in 2006.....that was about the worst time to buy a house, right before the crash. In my area we still aren't back to 2006 levels.

 

[ChinnyChinChin]

How old is your house? How much did he adjust for the lack of basements in the comparables?

You bought in 2006.....that was about the worst time to buy a house, right before the crash. In my area we still aren't back to 2006 levels.

He told me that he adjusted about 30k for my basement. Even with that adjustment, I'm still lower than other houses close by with NO basement but 500 more sq/ft above grade. House built in 2002.

 

[Michigan CG]

He told me that he adjusted about 30k for my basement. Even with that adjustment, I'm still lower than other houses close by with NO basement but 500 more sq/ft above grade. House built in 2002.

Well it just doesn't make sense. If your home were exactly like other homes (condition, age and size) and he adjusted $30,000 for the basement area then your home should be appraising for $30,000 more than those homes.

Do you have a copy of the appraisal?

 

[ChinnyChinChin]

Well it just doesn't make sense. If your home were exactly like other homes (condition, age and size) and he adjusted $30,000 for the basement area then your home should be appraising for $30,000 more than those homes.

Do you have a copy of the appraisal?

Yes I do have a copy. I'd like to redact all my personal stuff before I throw it up on a forum. The only homes he included where around the exact square footage with no basements and they were anywhere from 193k-217k...my house came in at 240k. I asked him to include a house that's 400 sq/ft larger with no basement that sold for 249k...he said because of the extra 400 sq/ft it isn't a comp...there are a few homes that are around 400-500 square feet larger with basements that have sold in 260s.

 

[ChinnyChinChin]

Should I post the appraisal?

 

[Meandering]

ChinnyChinChin: I just recently had an appraisal completed which seems a little off to me.

We have 2200 sq/ft above grade and about 1800 sq/ft of finished basement.

Our appraiser only used comps that were 2000-2300 sq/ft homes with no basements...so obviously the sale prices were MUCH lower.

He told me he doesn't think a 2600 sq/ft house with no basement is a comp and therefore my value was much lower.

$35k lower than i paid in 2006...an appraisal which he also did.

Any insight on this?

I have a number of comps in the area that are 400-500 sq/feet larger with no basements which sold for more than my appraised value...I'd love to use those comps

I have 2 homes within 1/4 mile that are 2600 and 2700 both both without basements that sold for more than my appraised value. I
asked why he didn't include such nice new comps and he said they aren't comps

Welcome to the forum.
Don't post the appraisal.

Some things here; what was the purpose of the appraisal? Lending?

Lending has its own rules for what is, and what is not "a comp", which can vary by lender through assignment conditions.

Regardless, the lack of comparables, or even non-comparable sales with basements should have been addressed in the report, as a matter of good practice. But it is important to understand that the report is produced for the lender, and for the lender's understanding. So if the lender understands you have a basement, and no sales support a value contribution for a basement, the lender has the choice of addressing the issue future with the appraiser, or, just letting you believe that you could convince the appraiser differently and that would make any difference to your loan application.

Sadly, the second option seems to be the case. If the lender did not ask the appraiser to address the lack of value contribution of the basement, and left it to you, well, the lender's decision is made concerning your loan.

Instead of looking for bigger homes, you need to look for sales of homes with basements, and compare them to similar homes without basements to extract any value contribution recognized in the sale price differences. Not just look for bigger homes, because they are two different considerations. Some buyers don't want basements, some will not buy anything that doesn't have a basement. But it's going to be very market specific, and depends on the pool of potential typical buyers in an area.

Hope this helps.

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