Another basement question and a missed bathroom on appraisal

[OKJayhawk]

I'm doing a refinance and had a home appraisal. I had 2 questions, but my basement question was sort of answered. My 10 year old house is built into a hill. The front of the house looks one story, the rear looks 2 story. On 2 previous appraisals, the house was listed as 3600 sq ft. On this appraisal, it was 1800 sq ft with finished basement. Having read the explanations from the other basement question, I don't know why the previous appraisers listed it as 3600 sq ft.

Second, on the appraisal the appraiser missed a full bath downstairs. I argued with my mortgage company, and they say the appraiser refigured the appraisal. However, they said that adding the bathroom back in didn't change the overall appraised value, because that had to do with my comps. The mortgage company also says that the appraiser refuses to provide an amended appraisal with the rooms correctly listed. Does this sound appropriate?

Upstairs: kitchen/dining room/living room/master bed and bath/laundry with full bath/powder room/3 car garage
Downstairs: second living room/home theater room/3 guest bedrooms/2 full baths

Thanks,
OKJayhawk

 

[Michigan CG]

........ I don't know why the previous appraisers listed it as 3600 sq ft............

They are idiots.

------------------------

Who is your lender, do you know what criteria they use to pick appraisers? This is an important question.

 

[OKJayhawk]

I'm in Northeastern Oklahoma, my lender is in Kansas City. I was told they had no say in picking the appraiser. I gave a list of all the appraisers in the surrounding counties, a 25 mile radius. They sent someone from about 80 miles away who I had not heard of.

 

[Michigan CG]

I'm in Northeastern Oklahoma, my lender is in Kansas City. I was told they had no say in picking the appraiser. I gave a list of all the appraisers in the surrounding counties, a 25 mile radius. They sent someone from about 80 miles away who I had not heard of.

Our industry is in a quandary at the current time. Yo did not tell me who your lender is....which would be nice to know.

But from the information provided I can tell you that your lender uses an AMC (Appraisal Management Company) that is used to keep the appraiser from being pressured from the loan officer. Good intentions, bad unintended consequences.

Why would the lender you are using have an appraiser come from 80 miles away? I can answer that. The guy who came was the guy who would do it for the least amount of fee.

How much did you pay for the appraisal?

You should call your loan officer and ask them to give you the order the appraiser received and how much the appraiser really got paid and how much the AMC kept of your money.

I will bet they can't and won't do it. Demand your money back and insist that your lender uses a local appraiser.

But I still agree with the 1,800 SF of the new appraiser...........basements have value, but they are not part of GLA per ANSI standards.

 

[OKJayhawk]

It's Pulaski Bank in KC. What you say makes sense. I didn't pay for the appraisal and I don't pay closing costs on this loan. I just cover the new escrow costs. So they would want to keep costs down as much as possible. But it means I don't have a lot of say in the matter.

I'm happy with the loan itself, 4.875%. The appraisal just came in a little lower than I expected. It may be completely accurate, but with the missing bathroom and the refusal to provide an amended appraisal, I can't be sure of anything.

Thanks.

 

[Mike Kennedy]

A Few questions please:

1. Did the Appraiser actually measure the house?
2. Have you obtained a copy of your local Assessor's property card for your house?
3. Does it show total finished livable area as 3600sf including the basement? (most likely).
4. Is the Refi for a Conventional Loan or FHA insured loan?
5. How long was the Appraiser actually at your home.
6. How many signatures appear on the bottom of Page Two of the Report.....one on the left or a second one on the right as Supervisory Appraiser?
7. Do all, or some, of the Comparables Sales utilized have the same layout configuration as yours or are they 2 story homes with 3000sf-4000sf TOTALLY above grade (possibly colonial or contemporary style homes with attached or detached garages)?
8. On page two of the report what distances from your home are listed for the comparable sales? Are any actually in your neighborhood?
9. To your knowledge was any estimate of value communicated to the Appraiser by the Mortgage Company Rep or perhaps were you instructed to mention one to the Appraiser while setting up the appointment or during the appraisal inspection?
10. Did you set up the appointment with a Male Voice and a female Appraiser actually show up (or a Female on the phone and a Male showed up)?


For Future Reference (perhaps now with a different Mortgage Co. or LOCAL BANK (hint)


Subject: Questions Realtors and Homeowners should ask when contacted by ANY Appraiser prior to setting up an Inspection Appointment......
·what license do you hold, what is the number?
·when did you first obtain your license?
·are you a licensed or certified appraiser, or are you a trainee appraiser?
·where are you from?
·when were the first and last times you appraised a property in my neighborhood?
·do you know any of the local long term Realtors or Agents in this area? (call them!)
·after visiting the property how long will it be until the report is delivered to the lender?
. what is the name of our local Assessor? where is Town (County, Village, City) Hall?
. .do you have any idea approximately how much my home is worth? ballpark guess? ( if he/she gives you a $$Number or Range - Report him/her to the Lender and DECLINE to set up an appointment)
·do you have direct access to the local Multiple Listing Service?

 

[Mike Kennedy]

IF the refi is a conventional loan AND Fannie Mae Guidelines apply:

Evaluating Above-Grade Room Count​

The most common comparison for one-unit properties is the above-grade gross living area. Appraisers must be consistent when calculating and reporting finished above-grade room count and square footage for the gross living area above-grade.

A level is considered below-grade if any portion of it is below-grade—regardless of the quality of its finish or the window area of any room. A walk-out basement with finished rooms would not be included in the above-grade room count.

For units in condo or co-op projects, the appraiser must use interior perimeter unit dimensions to calculate the gross living area. In all other instances, the appraiser must use the exterior building dimensions per floor to calculate the above-grade gross living area of a property.

The following must be observed when calculating and reporting above-grade room count and square footage for the gross living area:
• 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.
• Garages and basements, including those that are partially above-grade, must not be included in the above-grade room count.​

Below-Grade Areas​

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.

Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Guidelines, Appraisal Report Assessment
April 1, 2009​

Printed copies may not be the most current version. For the most current version, go to the online version at
http://www.efanniemae.com/sf/guides/ssg/. 473​

The appraiser must 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.​

Appropriate Above-Grade and Below-Grade Comparisons​

To ensure consistency in the sales comparison analysis, appraisers must compare above-grade areas to above-grade areas and below-grade areas to below-grade areas.

Appraisers 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, the appraiser must explain the reason for the deviation and clearly describe the comparisons that were made.​

 

[Walter Kirk]

If I had appraised your property I would have called it 1,800 S.F. with an 1,800 S.F. basement. Since appraisal forms used for most mortgage appraisals do not have check boxes for rooms in the basement I would have included a comment on the rooms in the basement including the bath. I would also employ an adjustment to reflect this situation to any comparables that did not have similar finished areas and baths in the basement.

If the appraiser in your case did this he did the job properly.

 

[Ted Martin]

I would have treated it exactly as Walter did.

Don't kid yourself, you will be paying for the appraisal if they make the loan, you just didn't have to front the money.

 

[ilovemaui]

What is the rationale for considering the day light basement rooms differently than the upper living area? Personally I consider a daylight basement to be superior to a regular two story home. The daylight basement area is easier to heat and stays cooler in the summer. The other advantage is that both floors exit to natural grade. In an emergency you don't have to jump out the second story window. It sounds like a rule some bureaucrat came up with and everyone decided to fall in place.