Bedrooms In The Basement

[tpoettker]

The real estate agents include the bedrooms in the basement in the bedroom count if the bedroom qualifies (egress window, closet, etc) but an appraiser cannot. I looked up the current FHA guidelines (4000.1) and it says this:

When any part of a finished level is below grade, the Appraiser must report all of that level as below-grade finished area, and report that space on a different line in the appraisal report, unless the market considers it to be Partially Below-Grade Habitable Space.

Partially Below-Grade Habitable Space is defined as "Partially Below-Grade Habitable Space refers to living area constructed partially below grade, but has the full utility of GLA"


How is it determined that the market considers it to be Partially Below-Grade Habitable Space.

 

[JTip]

"Deemed reliable but not guaranteed"

Let them tell their lies and you tell the truth.

 

[Jay Emmar]

Am I correct that you are asking about either a raised ranch, split level, or hillside ranch?

In any event, what JTip is saying above is that we need to read between the lines when analyzing comparable sales - realtors can paint descriptions of properties with a broad brush and are not subject to the same guidelines that we are when it comes to reporting room counts. One of many reasons why searching using bedroom count is something I rarely do.

Are you in northern IL? If so, MRED allows one to search for above grade bedrooms only. That said, I realize that some realtors will not break out the above and below grade count, especially when dealing with the home styles I listed above. Which is why we have to read between the lines.

As long as we compare apples to apples, and explain things in our report, we needn't get hung up on what constitutes a basement bedroom (unless you are adjusting for it, which would require a great deal of analysis and explanation)

My $0.02

 

[tpoettker]

It is not necessarily bi-level, raised ranch, of split level. I think your term "hillside ranch" is what we in southern Illinois call Ranch with a walkout basement. Sadly, our MLS does not separate the above and below rooms.

For example, I live in a ranch with a walkout basement. I have 3 bedrooms above ground and 1 bedroom below. As an appraiser it is a 3 bedroom home with additional bedroom in the basement. Real Estate agents will list this as a 4 bedroom home. Now the 4th bedroom in the basement is legal as it has a closet and a full window.

The FHA definition says "unless the market considers it to be Partially Below-Grade Habitable Space." So would the fact that the realtors are listing basement bedrooms and buyers are accepting this information in the listing as true (I know this is opening up a lot more discussion), could that define "market considers it to be Partially Below-Grade Habitable Space"?


BTW...congrats on winning the series against us Cardinals!!!

 

[Michigan CG]

............For example, I live in a ranch with a walkout basement. I have 3 bedrooms above ground and 1 bedroom below. As an appraiser it is a 3 bedroom home with additional bedroom in the basement. Real Estate agents will list this as a 4 bedroom home. Now the 4th bedroom in the basement is legal as it has a closet and a full window........

You own a three bedroom house with a finished basement. Remember that Realtors are in the business to sell real estate.

Bedrooms do not have to have a closet to be called a bedroom.

http://krec.ky.gov/legal/Pages/ansi.aspx

 

[Jay Emmar]

Thanks, gotta say I didn't think we would get past the Cards but now that we have I think we actually have a chance -

I guess the answer to your question, based on what you have stated, is "yes" - but again as appraisers it matters not how the property is marketed, it only matters that we report it accurately. If it is commonplace in the market to have such properties, and said properties are selling, then it would appear this is accepted in the market. However it is worded - either "partially Below Grade Habitable Space" or as I put it, finished basement, matters not. Apples to apples.

 

[TonyB]

An even more important question to ask would be: Why would you look to HUD/FHA for an answer about the proper way to report room counts.

Despite the aspirations of FHA, Fannie, Freddie, etc. They don't get to tell us the proper way to report diddly squat. Your classroom training and the market does that!

 

[Howard Klahr]

They don't get to tell us the proper way to report diddly squat. Your classroom training and the market does that!

Seriously??? So UAD is just a figment of my imagination?

"Partially Below-Grade Habitable Space refers to living area constructed partially below grade, but has the full utility of GLA"

Are there homes within the subject market area with the same bed/bath count whereby all of the rooms are above grade? Do those properties reflect a higher price?Therefore, you would report these areas on separate lines and adjust accordingly. If not, you can consider that the market considers below grade space at the same utility as above grade space.

Keep in mind that reporting the information on separate lines does not eliminate the space, only that it is segregated into different groupings.