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Advice On Measuring A 3 Family Gba/GLA

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Valueseeker

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May 19, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
hello again,

I put this in the newbie section because I've read all the previous post of this type of topic and I still don't know which way to go on it. In my office the supervisor treats gba as GLA. I've done a few multifamily appraisals and I am hoping to get clarity as to what the veterans do.

Example. 3 story/3 family home with a common unfinished basement. Each unit has 1000 square feet.

The first page on the 1025 ask for GLA but on page. Simple. I put 1000/1000/1000 for each unit.

The next page ask for GBA. Are appraisers putting 3000(treating GBA as GLA {as done in my office} ) or are appraisers putting 4000sqftGBA and listing the three units showing a difference of 1000sf between the finish and unfinished areas and then addressing that on the basement line?

I know gba is to include the basement. I guess I just don't know if showing a difference is the right thing to do or keeping it GLA as it is easier to compare that with other comparables.

Thanks folks!
 

George Hatch

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Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
This must be a regional thing.

We don't have a lot of basements in my region, but when present I never count them as GBA. A subgrade level that is finished and permitted as building area is treated as GBA, but unfinished basements are treated separately because they don't have the same contributory value.

You're comparing properties based on the contributory value of their respective attributes. If it's common for brokers and appraisers in your area to bundle basement and attic areas in with GBA then doing the same with your subject is just being consistent.

Now with multi-family there is sometimes a difference between gross building area and net rentable area, the non-rentable areas consisting of common areas such as hallways and laundry rooms and recreation rooms and the like. But then again if it's multi-family then the differences in property attributes will generally be demonstrated by the differences in rents, and price/room is a much more reliable unit of comparison for those than price/unit or price/sf/GBA.

The main thing is being consistent with how you handle your subject vs the comparables.
 

George Hatch

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Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
By the way, the 1025 form sucks because that sales comparison grid is operated like an SFR comparison even though the buyers and sellers don't analyze those properties that way. The 1025 form is easily the worst appraisal form out there and Fannie should never have issued it. If you want to see how multi-family properties are more commonly valued in the market, look at the 71b form - that sales comparison analysis isn't even an adjustment grid. They just break the comps out based on price/unit, price/rm, price/sf and GIM. (Gross Income Multiplier). That's how multifamily is most commonly valued in the market.
 

Jim Onderisin

Senior Member
Joined
Sep 15, 2003
Professional Status
Certified Residential Appraiser
State
Illinois
You've probably already read the Fannie Selling Guide's explanation, but here it is anyway:


Gross Building Area
The gross building area
  • is the total finished area including any interior common areas, such as stairways and hallways of the improvements based on exterior measurements;
  • is the most common comparison for two- to four-unit properties;
  • must be consistently developed for the subject property and all comparables used in the appraisal;
  • must include all finished above-grade and below-grade living areas, counting all interior common areas such as stairways, hallways, storage rooms; and
  • cannot count exterior common areas, such as open stairways.
Fannie Mae will accept the use of other comparisons for two- to four-unit properties, such as the total above-grade and below-grade areas discussed in Gross Living Area, provided the appraiser
  • explains the reasons he or she did not use a gross building area comparison, and
  • clearly describes the comparisons that were made

Fannie's explanation is pretty clear. As George pointed out, though, the 1025 format doesn't permit consistent reporting of above- and below-grade GBA. Many local appraisers report above-grade exterior-measured area as GBA and below-grade areas, finished or not, in basement area. However, that is confusing on the 1025 when finished below-grade area includes a rental unit.
 

Michigan CG

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Professional Status
Certified General Appraiser
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Michigan
The 1025 form is easily the worst appraisal form out there and Fannie should never have issued it.


The 1025 form is easily the worst appraisal form out there and Fannie should never have issued it.


The 1025 form is easily the worst appraisal form out there and Fannie should never have issued it.


The 1025 form is easily the worst appraisal form out there and Fannie should never have issued it.


The 1025 form is easily the worst appraisal form out there and Fannie should never have issued it.


The 1025 form is easily the worst appraisal form out there and Fannie should never have issued it.


1234567890
 

bnmappraisal

Elite Member
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Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
:rof::clapping:

No, MCG, how do you really feel about the 1025 form? I can't tell :shrug: (y)
 

George Hatch

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Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
IMO, Fannie should have just revised the 71b to comply with USPAP and their guidelines and used that. It's really irksome due to the point that many appraisers allow the form to drive the process - in their hands a poorly designed form sometimes leads to poorly analyzed appraisals.
 

Terrel L. Shields

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May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
In commercial work, GBA is the building footprint regardless stories and basement. Then there is the Fannie Way...
many appraisers allow the form to drive the process
Too true.
 

Michigan CG

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State
Michigan
I only use the form when doing lending work. If it is private party I do a narrative.
 
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