Challenge over 2-story foyer reporting

[LaMarre Labadie]

Because a particular municipality's records commonly do not subtract second level foyer areas from their Gross Living Area, I did not subtract it from the subject's 2-story foyer area so as to make a "like" comparison. The only reasonable way for an appraiser to verify this area is to review blue prints, but the municipality does not make these avaialble for review. I am being challenged and accused of using square footage that is too high. Consequently, it is said that my value should have been lower. I'm far from being a novice at appraising but I have not appraised since the time of this appraisal in 2002.

I could use support in the following areas: 1) Documentation on the correct procedures for sales comparisons. 2) Other townships in lower Michigan where the assessor's document 2-story foyers in the same manner. 3) Support for valuation difference, if any, between two identical dwellings with the exception that one has a 2-story foyer and the other has second level living area in its place. 4) Any other ideas.

I was a long standing member of the NAIFA, local chapter president, etc. up until 2001 or 2002 and have email them for assistance. No repsonse yet.

 

[Frederick]

"XI, 405.06: Gross Living Area (06/30/02)
[Page : 1158 06/30/02]

The most common comparison for one-family properties (including units in PUD, condominium, or cooperative projects) is above-grade gross living area. The appraiser must be consistent when he or she calculates and reports the finished above-grade room count and the square feet of gross living area that is above-grade."

It would appear that your methodology was reasonable and consistent. Hopefully you commented on this method in the report. Even if you didn't it would appear that under normal circumstances the GLA variation would be small relative to the total and would not have a significant impact on value.

-Frederick

 

[Lobo Fan]

ANSI standards say that clerestory areas are not GLA. If you are using another standard, be careful. Many states have codified ANSI as the standard. The rule of thumb for ANSI is if you can't walk on it, it is not GLA. This included bay windows that do not go all the way to the floor.

Many builders use "heated space" as the GLA criteria, which gets you into cubic space rather than floor space.

Deviating from ANSI can open a whole box of pandoras to quote a former governor of NM.

I hardly have your resume, but I just went through this last week. I went the other way, deducting the clerestory area from the second floor resulting in less GLA than anticipated.

I suggest just getting the GLA corrected and use the appropriate comps. The difference should not be huge (maybe 100 SF or so). Just because the assessor does it that way doesn't make it right. If you are using assessor records for comps, it could get interesting.

 

[Brad Ellis]

Lamar,

Since you do not appear to be a member of NAIFA any longer, I am left wondering just what you expect of them? If I dropped out I sure would not expect the time fo day- from them or anyone else.

However, if they did respond, I guess they qwould cite the ANSI standard since that is what they adopted and what they teach.

ANSI says it is not GLA and the staircase leading up is counted on the floor from which it descends.

I know it can be hard to then estimate the size of the comps if the assessor is doing it incorrectly, but if the comps are truly similar, how far off could one be if a similar percentage was deducted?

Brad

 

[Matt Jacobson]

Verify through additional data sources

I have come across similar situations and have handled it as follows:

(1) Always document actual measurements of Subject within report regardless of County measurements and comparables.
(2) Disclose differences between actual measurements (Most preferably ANSI Standard) of Subject and County Records.
(3) Compare County Measurements of comps to those disclosed in potential MLS listings.
(4) When comps are not MLS listed, verify the accuracy of County records by Knocking on doors and interviewing the current owners of the comparables and ask them. If nobody is home you can still usually see if the foyer is vaulted through glass around the doorway and compare this to the County sketch which would reveal whether the County inappropriatey included it or not.
(5) If comps are listed and after determining whether the MLS agent listed the comps as having been larger than they actually are due to using County Records without verifying them, determine if the "Market" made their purchasing decision based upon the size of the home as documented in MLS or County records. If so, determine the impact based upon a supported square footage adjustment. Of course, the best source for this information would be the buyer (current owner) of that property. If the buyer purchased their home primarily based upon bed/bath count, location, quality, maybe the difference in living area is insignificant or maybe not depending of the amount of difference in size.
(6) I have had great success when performing field interviews of comparable property owners. They have have allowed me to measure their homes, provided blueprints, floorplans, lunch . . . they can be a great additional source of information and we should not overlook even though there is oftentimes significant additional effort required.

 

[Mike Kennedy]

No floor - no GLA; depending on the design - variances of much more than 100sf-200sf are commonplace especially in Contemporary Homes open foyer plus open great room and other open areas on second floor. recently did a 6200sf Contemp (after deduction of 900sf open area). Value Variance can be significant. Reliance on Assessment Records and/or AVMs based on Assessment Records which often also include illegal uses and finished below grade area is clearly NOT the way to go. :icon_idea:

 

[Renee Healion]

The building department won't bring the blueprints out for view? Here, that happens when they store old prints in another location and it is particularly frustrating to me. I think you have to interview agents, homeowners, builders, or even appraisers who are busy in these neighborhoods. These houses likely are not custom creations, so getting a handle on the models for each neighborhood will give you what you need now and be on hand for future appraisals in the market. Knocking on doors is not so bad. It may take a trip there on Saturdays when homeowners are around. It's just the nature of residential work.

I understand what Frederick posted. The square footage most probably has a negligible effect on value. You can argue that you're being consistent but of course it is not worthwhile to be consistently off what may be accepted. Since GLA disputes are reported by E&O companies as being a common cause for complaint, it may be useful to amend the GLA after interviews more for liability reasons than anything else.

 

[Thomas Fiehler]

Around here some counties include the open foyer in the sketch and some do not. Read the MLS as it is ususlly mentioned. If it is, then estimate based on the size of the subject and put +/- after it. And explain what you did in the report!

 

[Brian Weaver]

LaMarre;

I too was an NAIFA member for many years, but I certainly would have no reason to expect any advice or help any longer.

With that said, when I've been confronted with similar measurement problems for comparables, I've estimated a reasonable factor for the sales as reflected from the subject. Meaning that, if the cumulative room measurements for my subject (LR 23 x 17= 391...etc) added up to 1,750 and my actual measured GLA was 2,535 Sq.Ft....I could apply this factor 2,535 / 1,750 = 1.45 to my comps.

Is this a flawless approach? Not by a long shot...but it's reasonable if the sales are similar in size and overall design.

They may have a point as to your methodology regarding using "bloated" square footage...but, if you were consistent in your application...the value shouldn't be skewed.

However, if you measured your subject and it came out to be 2,535 Sq.Ft....but you decided to add the floating air-space above the foyer containing an additional 300 Sq.Ft....and then called the residence as being 2,835 Sq.Ft....you're in for some problems.

 

[George W Dodd]

Good advise to follow. Always report the subject's GLA accuracy. Mike's suggestion of minor differences in GLA not being adjusted for it common. What about large differences or % differences in GLA? I'd mark "No Adj" and then explain why.