Hello everyone! I am selling my Father's home in Arizona and it has both above and below grade living spaces. It was built as a split level home with the same finishes in both areas. It is served by the same AC/heat unit with installed duct work and has large (3'x6') windows in each room and a door leading to the outside from the basement level. The water table in Tucson is at 180 feet. We understand that the ANSI requirements regarding below/above grade in Arizona require the below grade space to be rated differently. There is 1220 feet upstairs and 1227 in the basement area, so we are not talking about a small space. My question is, is there a formula or standard that is applied to the appraisal of the below grade portion? Our below grade space is appraised at 17% of our above grade space and that seems ridiculously low. Can anyone shed some light on this for me? The sale of our home is in jeopardy over this issue and I am trying everything I can to make it work. Thanks for any input that would be helpful.
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Appraisal with both above and below grade elements
- Thread starter Kayla
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- below grade space
Dublin ohio
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Compare apples to apples. What are similar homes in the area selling for. Why is the sale in jeopardy? Has there been an appraisal done?
Surf Cat
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Below grade definitely has to be separated from above grade GLA in an appraisal report.
It is true that below grade is generally not valued at the same rate as above grade areas due to differences in desirability and market perception. Reduced natural light, reduced air flow, and moisture issues. That being said, you stated the finish is the same as above grade GLA and it is walk out.
17% of the above grade per square foot.... especially finished.... does seem awfully low.
Do any of the comparable sales utilize in the report have finished basements such as yours? It all boils down to market reaction from properties with similar attributes of below grade amenities.
Surf Cat
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Dub....she states
Based on this, I'm assuming she had an appraisal done.
The home was never listed. My Dad owned the home for 60 years and one of the neighbors saw us getting ready to sell and put in an offer. It is a FSBO sale.
I probably should have clarified that basements are exceptionally unusual in the Tucson market. There were only a handful of homes with below grade spaces in the Tucson area and nothing that has sold in the past few years. Our one comp for the below grade space was from three years ago and was a flip. Our appraisal has been done and it came in about $12,000 under value. We are asking for a review of the value and an explanation of why only 17%. Our home is in a very popular neighborhood (the last few sales went $20,000 to $30,000 above the asking price even just three months ago) and is one of only several that are larger homes. There are 2 bedrooms and one bath on each level. Most of the homes in the area are half of the size, most only the size of the above grade portion. I understand the rules and how the appraisal has to be done, but it just seems like making half of our home of so little value is a punch in the gut. 30%. 50%. I can live with that, but 17% is just very low in my opinion and I was kind of looking for opinions of others in the field.
Thanks so much for your reply. Our problem is that there are just very few homes with below grade spaces in the Tucson area. Similar homes in the area are one story and half the size with substantially smaller lots. This was a custom built home that was built before the other surrounding homes. The appraisal has been done and the below grade space has been given a value of 17% of the above grade space. There was one comp in the appraisal with a below grade space. It was across town, sold three years ago, and was a flip. It appeared to me that the price per sqft was similar to every other home sold in that neighborhood, not severely reduced like ours is (based on both above and below grade sqft). The sale is in jeopardy because we have already given huge concessions to this buyer and are not willing to lose another $12,000 on the sale. I am just trying to see if there is some kind of industry standard for valuing below grade spaces.
Dublin ohio
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That could be the issue. Technically it is only a 2 bedroom 1 bath home
I get that part, but I still think that the 17% value of the lower portion of the home is the issue. I can't change the rules that have to be followed, but maybe I can suggest something that will get some movement on that 17% figure. I think it is so unfair that we basically have to give away half of our house.