Do You Count As Sf Or Basement

[Mark R. Evans]

I am curious as to what a majority of you might say on this one. This may be a legal matter not mine.

First a description of the house:

A custom-built rustic style dwelling situated on acreage on a hillside. The upper floor consist of one bedroom 1 1/2 baths, kitchen and living room. There is an upper loft that is just that a "loft". In-other-words, no doors, no or front walls. It was judged the loft could not be used as a bedroom due to the lack of privacy.

The lower level consists of two bedrooms, a bathroom. The area near the front of the dwelling has a kitchenette/bar area and living area that is open. This area is of consistant finish to the upper floor.

The problem: Because the dwelling was built on a hillside the the rear of the dwelling is 20% below grade (where the hill and dwelling meet) with the majority of the lower level being above grade. Because this dwelling was custom built and the two levels(upper and lower) flow together quite nicely (open with no door or wall separation, only railing), do you consider the lower level a basement or part of the GLA.

Hint: It is apparent that the lower level was built with the intention of and use as GLA. But what do you do as an appraiser?

One appraiser appraised the property for $250,000 while the other appraised it at $160,000. Thus the lawsuit. The purchase price was at $250,000 at the time of the first appraisal.

By-the-way, the biggest argument is in the Cost Approach for the lower area. One appraiser included the lower area in the GLA, and the second did not. The appraiser that did not provided $25.00/SF for a finished basement.

Oh.....ONE MORE THING......The state does not have a set of standards as to how to measure or count SF of a building though it is coming.

 

[wyecoyote]

First, is the lower level on a slab or on floor trusses?

Typically I would consider it as basement square footage. We have lots of daylight basement houses around here like you describe. Even many water front and view properties that either have 1 or 0 above grade bedrooms. The rest are below grade in the basement. To maximize the view from the main living areas. Adjusting would be by what similiar comps say.

 

[Scott Kibler]

A $90,000 difference over a description? I don't think so.

 

[Mark R. Evans]

In case you were wondering, I am NOT part of this lawsuit or have any thing to do with it. So your responses will not be used.

I was just curious because it was interesting to me.

The lower level is on a slab.

From what I understand a builder was asked about the lower level and said it will definately cost the same to construct the lower level as the upper level do to the similarity of finish.

 

[Jim Bearden]

Ah the old custum and practice gambit. You must be careful and weigh the only 2 answers available. First you must go to the assessor and find out how they measure it most likely basement. If they consider it part of GLA so be it. Next go to MLS and see what their requirement is. This however can be a red herring because despite the rules a lot of agents will use every foot they can get their hands on to puff GLA. This is particularly true in certain areas and mountain communities here in Colorado. Ultimately let your comparables be the guide.

Remember custom and practice of the majority rules the roost, as long as it is tempered by all other possible input.

BTW when the state gets involved watch out.

 

[Mark R. Evans]

Tax Card says BSF. Base Semi Finished for the level.

The MLS listing upon purchase listed it as square footage.

MLS does have different requirements. As long as some floor coverings and wall coverings are noted it is considered SF.

 

[deturner]

Funny this thread appeared today. Yesterday I dealt with the same thing.

I beleive there are some guidelines somewhere that state that "any" portion below grade makes the entire area below grade and it should be separated out of the GLA.

In our area, we have several properties (high end) that have finished "basements" similar to the above grade areas (mostly on the lake). I separate them out and attempt to find comparable properties with similar below grade area. It's not unusual to value the below grade similar to the above grade area.

My situation yesterday involved a tri-level (split-level). There is 800 SF on the main level, 800 SF on the second level and 800 SF on the lower level.The lender had a desktop appraisal done and the appraiser showed 1600 SF of living area. The borrower stated that they have 2400 SF of living area. Thus the interior appraisal was born.............

I went to the property and it was like it stated on the tax appraisal card. My appraisal came back as 1600 SF above grade living area and 800 SF basement/below grade area. The borrower calls me and I tell her that the basement is a basement is a basement.

However, I tell her and the lender that just because it's below grade does not mean that it doesn't have value. For some reason the UW could not grasp the fact that the below grade area is living space and I did give it value in the report.

By the way, my appraisal came back close to what the desktop did.

If it's a basement, it gets counted as a basement. If it's finished similar to other areas, it gets more value than if it was unfinished but maybe not as much as the other areas. Depends on what the market indicates.

DaveT in NC

 

[Jim Bearden]

Originally posted by Mark R. Evans@May 25 2005, 10:12 AM
Tax Card says BSF. Base Semi Finished for the level.

The MLS listing upon purchase listed it as square footage.

MLS does have different requirements. As long as some floor coverings and wall coverings are noted it is considered SF.

Semi finished? Was the basement finished without permit, could be no-no.

 

[Ariba]

What are the comparables like. Do they have the basement counted as GLA. What does the market say?

Ron
AppriaserPlus.com

 

[Pamela Crowley (Florida)]

WHO was the client and what is the purpose of the report?????

The answer to these questions will help determine what 'guidelines' needed to be followed.