Below Grade Is Being Used As GLA

[Richard Carlsen]

Yikes , you never know how the local customs treat below ground finished area.

If you don't know, then how can you claim geographic competence? The upshot of it is; You had better know how the local market treats something or when that reviewer calls, you will be dishing BS instead of facts.

 

[Richard Carlsen]

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. For that reason, the appraiser should 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. To assure consistency in the sales comparison analysis, the appraiser generally should compare above-grade areas to above-grade areas and below- grade areas to below-grade areas. The appraiser may deviate from this approach if the style of the subject property or of any of the comparables does not lend itself to such comparisons. However, in such instances, he or she must explain the reason for the deviation and clearly describe the comparisons that were made.

And what you have shared with us are part of the FNMA Appraisal Guidelines.

Note the word "Guidelines". They are not called mandated appraisal rules and regulations. They are called guidelines because that is what they are. And in cases where the market goes contrary to the guidelines, the appraiser is required to follow USPAP in accurately reporting the analysis and the results.

If one must adhere lock step to the guidelines without deviation, pray tell me how one can use a comp that is more than 1 mile from the subject and over 6 months old?

As I said, I have never had an UW or a review appraiser kick one of my reports back for using the below grade level in the GLA in one of the two cases where I may use it. I fully explain my reasoning and justification for this deviation from the guidelines.

I think I know the Northern Michigan market better than a review appraiser sitting in an office in New Orleans or Southern California and certainly better than an UW in Baltimore. That's why they hire me to do the appraisal.

 

[Thomas Fiehler]

Carnivore-Impossible to determine the size of the basement for the comps. If I could compare the GBA to the comps GBA it would probably be "closer" but that would violate the state law. ANSI is written into the law for residential work in Kentucky. Unfortunately the MLS's and Realtors do not separate the areas.

 

[joebuck]

Thank You All For Very Your Help And It Still Is Just A Guideline But I Think Conformity Is What We Want In Appraising This Should Be A Law To Me Not Just A Guideline And If Needed To Hate To Use The Word Depart But State It In The Appraisal Please And Do Not Use Undergrade As GLA. But If Done State It Thank You All.

 

[Carnivore]

Thomas,

Ya dont have many options do ya.

You could get on your tricycle and ride over to the comps and see for yourself. 2. You could get new comps 3. GBA it and explain!!

I feel your pain about the realtors mixing it all up! Happens here all the time.

good luck!

 

[frozone]

And what you have shared with us are part of the FNMA Appraisal Guidelines.


You have made my point exactly. Hence the "Should"

 

[Mike Garrett RAA]

JoeBuck....

We don't need no more stinkin laws! I have been appraising, in Colorado, for more than 28 years and it is not common practice for appraisers to include basement (below ground) square footage in the GLA...at least not appraisers with any experience and common sense!

While ANSI has not been adopted by Colorado as part of the rules and regulations for real estate (both appraisers and agents) it's a very good idea to follow it.

 

[CGW Appraising CO]

JoeBuck....

We don't need no more stinkin laws! I have been appraising, in Colorado, for more than 28 years and it is not common practice for appraisers to include basement (below ground) square footage in the GLA...at least not appraisers with any experience and common sense!

While ANSI has not been adopted by Colorado as part of the rules and regulations for real estate (both appraisers and agents) it's a very good idea to follow it.

Mike,
Don't you include the garden level of tri-levels in the GLA? it's pretty common here. if not, how do you handle tri levels with basements or 4 levels where there is a sub basement and a garden level and the garden level has GLA value and the sub basement finished or unfinished a much lower value?

 

[joebuck]

Mike if you know whos appraisal I was reviewing you would want to make it a law. Just to stop know it alls from trying to do what ever they want.

 

[Mike Garrett RAA]

Just because some appraisers commonly do it wrong does not make it right.

Trilevel...two levels above grade, one level below grade

4 level...two levels above grade, two levels below grade

However, it could be that there are three levels above grade on a four level.

If the loans are sold to Fannie Mae and an appraiser reports all of the square footage as above grade the package could be rejected. VA and FHA are also quite specific on this issue.

I know of at least two cases where the appraiser fined by the state where that was an issue...not the only one, thank God.