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Bedroom in a walkout basement

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hal380

Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
I know this has been batted around before, but I could not find the authority I am looking for.

Scenario:
House on hill side, 2 bedrooms 2 baths totally above grade.
2 bedrooms 1 bath in walk out basement.
bedrooms each have two windows looking out toward back yard.

Question - I understand that the below grade area is not GLA, The house has been marketed and sold as a 4 bedroom 3 bath home. Market accepts the bedrooms in the basement.
I could not find the ANSI Standard or the FHA comments on window sizes and sill heights in order to have the bedrooms counted in the room count.

Yes I did the search thing, but could really use a speedy answer.

REgards

Hal
 
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Stone

Elite Member
Joined
Feb 1, 2002
Professional Status
Certified General Appraiser
State
Wisconsin
The fannie/freddie form asks for the rooms above grade in the grid, correct? If so, how would rooms below grade count as above grade, even if the market considers them bedrooms?

Below grade doesn't mean no value. Around here they are usually marketed as bedrooms, but they are still listed elsewhere when doing a fannie report. Compare the house to other houses with similar layouts and it is no problem.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Here is what HUD/FHA says:

Basement bedrooms and apartments - As a rule basement space does not count as habitable space. If the bedroom does not have proper light and ventilation, the room can not be included in the gross living area. The following requirements apply to the valuation of below-grade rooms: The windowsill may not be higher than 44 inches from the floor. The windowsill must have a net clear opening (width x height) of at least 24 inches by 36 inches. The window should be at ground level; however, compensating factors may allow less.
 

Metamorphic

Senior Member
Joined
Mar 15, 2008
Professional Status
Certified Residential Appraiser
State
California
If you really believe there's no market difference. Put the basement stuff in like it was GLA and habitable room, balance the grid and write down the value you want to appraise at. Then go back in, put the bedrooms and GLA on the basement line, and re-balance the grid valuing the basement line so that you end up with the same opinion you had with it on the regular GLA/bedroom lines. Then put in a note to that effect. Fanny's happy, client's happy, nobody's mislead.
 

Richard Carlsen

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Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
If it is for FNMA or other such secondary market buyer, you follow the assignment conditions which state that the GLA is for above grade level rooms only. It does not matter what the house is marketed as. What matters is the guidelines in calculation of the grid.

We run into this all of the time in a region that readily accepts below grade rooms as living area, especially walkouts that are very common due to the hills in the area. What you do is call the GLA IAW the guidelines and then credit the finished lower level as the market indicates. My comments in a report like this would note that there are 2 bedrooms but that the house has a market accepted utility of a 4 bedroom house and therefore no adjustment would be made in the sales grid between the subject and a 3 or 4 bedroom comp with all bedrooms above grade.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
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Missouri
Agreed, the basement bedrooms would not be included in the above grade room count.

Your question about whether they could be labeled as bedrooms elsewhere in the report such as in sales comparison reconciliation and sketch labelling is dependent on whether there is sufficient egress from those windows.

FHA's guideline is a good one to go by. Otherwise, it is a judgement call on your part.

Think of if you were asleep in that room and the door was blocked by fire. Could you escape?
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Your question about whether they could be labeled as bedrooms elsewhere in the report such as in sales comparison reconciliation and sketch labeling is dependent on whether there is sufficient egress from those windows.
I disagree. Labeling the lower level rooms as bedrooms does not mean that they are counted in the room count of the GLA or anything else nor does it mean that they are legal and meet all code. It is simply a classification of the present utility of the room based on the appraisers observations. If there is evidence that the room is used as a bedroom, then I would label the room as a bedroom in the sketch. If it is an exercise room, then that is what I would call it.

Just because the appraiser describes the utility of a room in the sketch, does not mean that it is counted that way nor does it mean that you take on any liability if, for instance, someone uses it as a bedroom and dies in a fire. We are observers; not designators.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
I do believe Fannie guidelines state you can compare above and below grade to above grade if your market does not accommodate the style of the house to be adequately treated when comparing only above to above and below to below. The form is just a form. You can write a paragraph and explain what you are doing.

I think that is best shown by those BiLevels that have the lower level slightly below grade (maybe 6" or 1') that compete as though the area is living area.

The only thing is, if your market treats that lower level as living area and you cannot compare it fairly otherwise, you have to explain it in detail in the report, per Fannie Mae.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I do believe Fannie guidelines state you can compare above and below grade to above grade if your market does not accommodate the style of the house to be adequately treated when comparing only above to above and below to below. The form is just a form. You can write a paragraph and explain what you are doing.

I think that is best shown by those BiLevels that have the lower level slightly below grade (maybe 6" or 1') that compete as though the area is living area.

The only thing is, if your market treats that lower level as living area and you cannot compare it fairly otherwise, you have to explain it in detail in the report, per Fannie Mae.


I agree, Jim. What is typical for the area. You can call the lower level living area if it is acceptable for the local market according the Fannie Mae.
 

hal380

Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
I really appreciate all your input. The tax card includes the 2 bedrooms and the full bath in the room count but does not include the Sq Ft area of the basement in the GLA. I believe the best approach is to only grid the above ground area as GLA, but make no GLA adjustment for deviations in GLA of the comps.

My opinion is that the market buys bedrooms, not GLA. When you walk into a real estate office - looking to buy a home, you dont say to the agent "My wife and I need a 1575 Sq Ft house". You buy bedrooms and there must be a reasonable correlation between the GLA and the bedroom count.

I am printing out the responses for my work file, it is my position that I am acting in accordance with what my peers would do and my market reaction to the subject.

Regards to all

Hal
 
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