Am I just being stubborn?

[Alan Simmons]

Am I just being stubborn?

Last month I did an assignment on a tri-level that is being brokered to a national company. This company has since faxed that “the garage level needs to be reported separately from the GLA,” blah, blah, blah. (The “garage level” now being all living area.)

When I called to ask why (having suspicions), they said it was their company’s rule that the lower level of a tri-level never be included equivalent with the GLA. She went on to add that this was because this area is always below grade. It was then that I directed her attention to the included photographs. Even in these photographs it is VERY clear that nothing is below grade especially the “garage level.” She said she would have to speak to her supervisor.

Today I get secondhand VERBAL instructions to redo the report reflecting the “garage level” as below grade. Then, “lower the value to reflect the now inferior below grade area.” They specifically instructed that the below grade adjustment can not be equivalent to the GLA adjustment and that will not accept comments concerning my objections. (Yes I know these are from the UW)

Even though everyone (including the national company) agrees that the “garage level” is above grade, everyone acts confused because I do not want to change the report saying such. They just keep referencing their rule.

 

[Pamela Crowley (Florida)]

If it's not below grade, it's GLA and that is that. I would not change it and let them find some other appraiser that is not ethical to fit their 'guidelines'. Make sure you get paid for yours!

Just say "NO"

With explanations and pictures, if they don't 'get it', it's their problem, not yours.

 

[Ben Vukicevich SRA]

Alan,

Time to play... baffle the underwriter game. Who cares how you compare it as long as you're consistent in your method of comparison? That's all that is required

How to baffle: 1) Calculate the LR,DR and kitchen level GLA, then add the bedroom level GLA to that. Use that as the GLA in the Sales Comparison Analysis. 2) Under Basement-list "Lower Level" for the subject and the comps. 3) Under "Rooms Below Grade"-list whatever is there for the subject and comps; FR, PR,BR whatever. Adjust for the dissimilarities on the lower level, if any, on the "Rooms Below Grade" line.

The end value should be the same using this method, you keep the client and everyone is happy. This assumes that you're using all tri-levels/split levels for comps, of course.

Skin the cat a different way...and still get paid

Ben

 

[wyecoyote]

Ask them if they are utilizing the FNMA guidelines.

Section 405.06 – Gross Living Area

The most common comparison for one-family properties (including units in PUD, condominium, or cooperative 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. For units in condominium or cooperative projects, the appraiser should use interior perimeter unit dimensions to calculate the gross living area. In all other instances, the appraiser should use the exterior building dimensions per floor to calculate the above-grade gross living area of a property. Only finished above-grade areas should be used--garages and basements (including those that are partially above-grade) should not be included. We consider 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 and finished areas below-grade" line in the "sales comparison analysis" grid. To assure consistency in the sales comparison analysis, the appraiser generally should compare above-grade areas to above-grade areas and below-grade areas to below-grade areas. The appraiser may deviate from this approach if the style of the subject property or any of the comparables does not lend itself to such comparisons. However, in such instances, he or she must explain the reason for the deviation and clearly describe the comparisons that were made.

FNMA guidelines specifically state that any portion is below grade. From your post that you specifically state that no portion of this is below grade so I see no problem with FNMA guidelines.

Today I get secondhand VERBAL instructions to redo the report reflecting the “garage level” as below grade. Then, “lower the value to reflect the now inferior below grade area.” They specifically instructed that the below grade adjustment can not be equivalent to the GLA adjustment and that will not accept comments concerning my objections. (Yes I know these are from the UW)

So ask them as some say put that in writing. Also include a copy of there appraiser license for your state and explain their competency for the subject's market area to know these adjustments.

Ryan.

P.S. Thanks Pamela for the link to the FNMA guidelines I downloaded them and included some of the Section numbers in my appraisal.

 

[Pamela Crowley (Florida)]

P.S. Thanks Pamela for the link to the FNMA guidelines I downloaded them and included some of the Section numbers in my appraisal

There are still many more that I will be adding. The list there in that forum is far from complete.

 

[Joe Birrell (NY)]

Ben V:

Good one, done it many times before. Holding those "cats" still while
you skin them is just a little tedious.

Ranting Joe

 

[John Hassler]

Respond that you will do it as a hypothetical condition and the new/aditional fee will be $zzz. And, you will start on it as soon as they accept the fee and terms in writing.


John Hassler

 

[Ben Vukicevich SRA]

Ranting Joe,

Hey, sometimes those cats/underwriters deserve the results they get... with the dumb stuff they ask for.

You know the old saying... if you can't dazzle them with brilliance, then baffle them with....... :lol: :lol: but fully USPAP compliant, of course 8O 8O

Ben

 

[Jo Ann Meyer Stratton]

I just recently had a very long detailed discussion over on the NAIFA chat room about this topic. Here in arid Arizona with the water table 600' below the surface, a lower level finished comparable to the upper levels is considered part of the total livable area by everybody. In the larger counties; building permits, building inspectors, county assessor field personnel, realtors, buyers and sellers include all the livable area, whether it is above, below or partially below grade in the GLA. All records regarding comparables from all sources show the total GLA for all levels. The amount of square foot of each level for the comparables are not available in any record. The only source for the square footage for each level of each comparable is only available if the appraiser of the subject went inside each comparable and measured each level or was able to contact the appraiser for the sale and that appraiser being willing to share the information.

Therefore the Dallas office of Fannie Mae will accept the last two lines of Section 405.06 for the arid desert areas. "The appraiser may deviate from this approach if the style of the subject property or any of the COMPARABLES does not lend itself to such comparisons. However, in such instances, he or she must explain the reason for the deviation and clearly describe the comparisons that were made."

So when completing an appraisal in the metropolitan area of AZ, if the appraiser has the information/breakdown of each level's livable area for all the comparables---then the report can be completed with above grade on the GLA line and below/partially below grade on the basement line for the subject and all comparables.

However, if the information for the livable area on each level ifor each comparable is not available from any source, then the total livable area of all levels for the subject and all comparables is reported on the GLA line (and extensive explanation of the market is required).

So back to your original posting. What information did you have available regarding the comparables? Did they have similar situations? Were you able to obtain a breakdown of each comparable? If all the information from all sources for all the comparables cannot be separated out, then total GLA on the GLA line is acceptable to Fannie Mae per the two lines of Fannie Mae's guidelines quoted above. Besides if all your levels are above grade, the underwriter (or is it the loan officer or loan processor) doesn't comprehend what you are explaining and illustrating. The actual underwriter might not even have seen your report yet!

By the way, I am still trying to picture an underground garage that the clients seems to be thinking of.

 

[jtrotta]

Ryan

FNMA guidelines are OK, but each individual company can add their own set of rules & requirements.

therefore, on this one, I would say Ben has the upside of the devil of darkness. it's not how you play the game, it's how you win every time :!:

8)