Apprasial of basement

[Mike Kennedy]

Sorry , didn't mean to try and mislead the OP with the omission that section. Just tried to help them understand the below grade thing.

The remainder for full edification:

"Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Guidelines, Appraisal Report Assessment
December 1, 2010
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/. 539

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.

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.

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."
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Author(s) - man that nailed it. Okay what's next?? Wanna grab a beer?

:Eyecrazy:OH CRAP - WAIT A MINUTE WHAT ARE WE NUTS??? NAH - never mind - it's okay to do whatever it takes to "do the deal" and get the loan approved so we can get investors to buy them and our stock price will go through the roof and save our phony-baloney jobs. !!! Okay - hey legal department - how does this sound?????

um um. ok I GOT IT - !!!

"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."

WHEW- that was close!!! Okay the Beers are on me

 

[sputnam]

This is one of the areas of long standing misunderstanding. The property is what it is. Whether it's called Gross Living Area or Finished Basement, the improvement exists and contributes (or doesn't) to the value of the property. Whatever you call it, the value is determined by the market. The appraiser looks to the market to form his/her opinion of what that value is. An experienced appraiser could call it either one and still form a credible opinion of value. But, there are standards and regulations that govern what is called Gross Living Area and what gets called Basement. There are some variations among standards, but all of the standards I'm familiar with say that any area that is below the outside ground level (appraiser say 'below grade') is basement. Usually, it's basement if any part of the floor on the level is below grade.