RioGypsy
Freshman Member
- Joined
- Feb 26, 2019
- Professional Status
- Certified Residential Appraiser
- State
- Wyoming
I am getting a revision request (from an out of the area lender) saying that, "Both comps 1 and 2 have finished walk-out basements which present as 2 story home appeal vs. subject as a ranch with underground unfinished basement." Subject does have an unfinished basement. Comps 1 & 2 do have finished basements with exterior entrances that are considerably smaller in area. I adjusted for basement area, basement finish and additional egress for the exterior entrance in the original report. Basement area & finish adjustment for comps 1 & 2 were 45% of the above grade GLA adjustment which is consistent with market norms that are between 40-60% of the GLA per s.f. adjustment. Additional, superior egress was adjusted on a separate line in the grid. Comp 3 is a similar ranch style home with a partially finished basement. Comp 4 is a ranch style home without a basement that was included to bracket site value and actual age. Comp 5 is an REO that is a ranch style home with a fully finished basement that was included to bracket basement area, but given minimal consideration as an REO sale and a couple of other factors. The comps support the value with the exception of Comparable 3. Comparable 3 is within a 10% tolerance of the subject sales price. My net and gross adjustments are within the old guidelines on all but Comp 5. I feel like my value is well supported.
In my first response to the revision request, I stated that it was not typical in the market to consider walk-out basements as equivalent to above grade GLA such as a 2 story house. A basement is simply not worth the same as the above grade square footage in this market, regardless of egress. Thus why I put egress on a different line of the grid. I am not sure how to respond to this. Any thoughts on how to respond? Any advise on what math I can use to further support the assertion that the basements of comparables 1 & 2 should not be valued the same as a 2nd story?
One other thing....this is a small, rural community with limited comps. Every property is unique. No cookie cutter, plain vanilla. The possible comparables vary wildly in other attributes like GLA, site value, quality, condition and additional features (barns, guest houses, shops, etc.) and thus have a wide range of sales prices ($255,000-1,250,000) So I have to use one comp to bracket site size and basement finish. Another for proximity and date of sale. Another to bracket GLA. It's a cobbled-together report, but credible and supported.
In my first response to the revision request, I stated that it was not typical in the market to consider walk-out basements as equivalent to above grade GLA such as a 2 story house. A basement is simply not worth the same as the above grade square footage in this market, regardless of egress. Thus why I put egress on a different line of the grid. I am not sure how to respond to this. Any thoughts on how to respond? Any advise on what math I can use to further support the assertion that the basements of comparables 1 & 2 should not be valued the same as a 2nd story?
One other thing....this is a small, rural community with limited comps. Every property is unique. No cookie cutter, plain vanilla. The possible comparables vary wildly in other attributes like GLA, site value, quality, condition and additional features (barns, guest houses, shops, etc.) and thus have a wide range of sales prices ($255,000-1,250,000) So I have to use one comp to bracket site size and basement finish. Another for proximity and date of sale. Another to bracket GLA. It's a cobbled-together report, but credible and supported.
