Square Footage question in Cleveland

[HomeBuyer6]

This post concerns an apparent discrepancy in square footage for a property I'm trying to close on 9/30, in Cleveland, Ohio. The appraisal already came in slightly above the closing price, which I'm happy about. However, I have a concern, detailed below.

The seller's original listing had the property listed at 3,640 square feet. The appraisal that I ordered came in at 3,336 square feet, about a 8.4% reduction. However, the drawing that the appraiser used to justify this calculation seems problematic to me, as this second figure STILL seems too high. I show the drawing here, taken directly from the appraisal report:



Note that the eastern portion of the house is shown to have an identical footprint for both floors:


This would be accurate if the second floor extended over the entire first floor. In reality, however, a large portion of the first floor is not covered by the second. The view through the northern window shows that the second-floor loft does NOT extend to the north wall:



A photo of the interior copied from the appraisal report shows the same gap:


In my mind, an accurate portrayal of the floor plans should take into account this gap, as follows:



I read in ANSI Z765-2020: Square Footage that "openings to the floor below cannot be included in the square footage calculation." I am worried that I am trying to buy a property listed at 3640 square feet which should be listed at about 3000 square feet (by my best estimate). I am especially concerned about how this will play out when I try to sell later. Can someone give me an objective third-party view as to whether this is an issue that needs to be cleared up?

Thank you in advance.

 

[Terrel L. Shields]

I believe you are correct. Someone has included air into the upper level. That's not the ANSI way...

 

[HomeBuyer6]

I believe you are correct. Someone has included air into the upper level. That's not the ANSI way...

Thank you for the swift reply. Do you recommend that I try to get the appraiser to address this in any way? Or is it to my advantage to let sleeping dogs lie?

 

[sputnam]

The real question is.. what is your goal? You said the appraisal is above the selling price. If you challenge the appraisal and the appraiser says 'oops', the appraised value is likely to go down. Don't know what will happend with your transaction in that case. Will you demand a reduction in the sales price? If you do, the Seller might say 'No way'. Then you'll have a Seller who insists on the agreed upon price AND an appraisal that is lower than that price. In order to close, you will have to put more money on the table. If it were me, I'd leave it alone. After you own the property, you can have someone who knows what they are doing measure and produce a building sketch for you.. if you want.... or you can just leave it until you are ready to sell.

 

[HomeBuyer6]

The real question is.. what is your goal? You said the appraisal is above the selling price. If you challenge the appraisal and the appraiser says 'oops', the appraised value is likely to go down. Don't know what will happend with your transaction in that case. Will you demand a reduction in the sales price? If you do, the Seller might say 'No way'. Then you'll have a Seller who insists on the agreed upon price AND an appraisal that is lower than that price. In order to close, you will have to put more money on the table. If it were me, I'd leave it alone. After you own the property, you can have someone who knows what they are doing measure and produce a building sketch for you.. if you want.... or you can just leave it until you are ready to sell.

My goal is to understand the value of what I am trying to purchase. If a faulty appraisal is used, this will lead to a faulty valuation. Past a certain differential, my purchase is no longer justified, right? In which case I'd certainly need to know.

I have seen differing accounts of how open spaces above first floors should be calculated. By posting in this forum, I hope to understand whether there's a "there" there, especially as my wife and I paid good money to find out the worth of the property. I'm hopeful someone can shed light on this, given that both my realtor and loan officer have counseled me not to find out more from the actual appraiser himself until after closing for fear of delaying the process.

 

[TerryRohrer]

My goal is to understand the value of what I am trying to purchase. If a faulty appraisal is used, this will lead to a faulty valuation. Past a certain differential, my purchase is no longer justified, right? In which case I'd certainly need to know.

I have seen differing accounts of how open spaces above first floors should be calculated. By posting in this forum, I hope to understand whether there's a "there" there, especially as I paid good money to find out the worth of the property. I'm hopeful someone can shed light on this, especially as both my realtor and loan officer (who have an interest in seeing the deal close) have counseled me not to find out more from the actual appraiser himself.

The open area with no "floor" in it should not be counted as gross living area. If you can estimate that square footage, you should be able to estimate the impact on value if the appraiser revealed what they used for an adjustment for living area differences. If not explicitly reported, you should be able to calculate it by comparing the square footage of the subject to one of the sales, and divide the dollar adjustment applied by that difference in square footage. If meaningful, your lender should request that the appraiser address the apparent error.

 

[djd09]

what needs to be "cleared" up. you know the answer to your question.

did or can you double check the other measurements? sometimes 68 is really 61 and so forth.

 

[TerryRohrer]

both my realtor and loan officer have counseled me not to find out more from the actual appraiser himself until after closing for fear of delaying the process.

In no uncertain terms, this means "let us extract and pocket our piece of your hide before you go upsetting the apple cart." They are protecting the cash you will be paying them to close the loan, without any regard for whether or not you will get what you are paying for.

 

[TMG]

Cleveland is a great place to rent a Tuxedo.

 

[djd09]

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

B4-1.3-05, Improvements Section of the Appraisal Report (09/06/2023)

selling-guide.fanniemae.com

is it finished?