"Earth Sheltered" home

[Tim Schneider]

Is this considered an "earth sheltered" home? The living area has about 1/2 of the exterior wall exposed, knid of like the basement of a raised ranch. Each room has normal sized windows, and from the inside you really don't get the feeling of being "below grade" There is a front entry and rear patio door that are at grade, with the areas around them built up with dirt.

I am leaning towards thinking the market reaction would be similar to an at grade ranch with no basement. As far as the report goes, would you list the area of the home in the GLA line of the grid and then provide explanation? Or, list the GLA as 0 and then adjust it as if the SF amount was in the grid? Any other ideas?

 

[Jo Ann Meyer Stratton]

That is a "bermed" home, not an earth sheltered. Earth sheltered would be completely buried to the roof line on 2 to 3 sides. Earth sheltered homes are built into the side of a hill with windows and doorways on the side without any hill surrounding it. Bermed homes are constructed on flat ground with dirt piled up against and around the home which allows windows on all sides as well as doors with pathways/cuts in the dirt on all sides also. I would list all rooms and square footage on the GLA line because that is the main livable area. Detailed sketch and lots and lots of explanation and description should be in the report.

 

[Mary Tiernan]

This is what I said on similar style houses in my area:

Subject is partially bermed. Bermed houses are built slightly below ground level on 1-3 sides to aid in reduction of energy consumption.

Partially bermed houses have equal marketability to above grade houses in this market. No effect on value is indicated.

 

[Tim Schneider]

Thank you for two helpful responses

 

[BRCJR]

I agree it is GLA. I lived in a house like that and when appraised it would have been a basement with one room above grade. The upper level bedroom.

Market reacts as GLA, at least where my home was located.

 

[Mark K]

I hope you can find similar comps. I wouldn't just use non-bermed comps in the report and assume that the style had no effect on value. And if there are no similar comps, you should ask yourself "why not?".

In this area there would generally be a significant market reaction (negative) to this style of home.

One other thing I've always wondered about this style is whether or not the windows in the bedrooms meet code for emergency ingress/egress. In this area I believe that the bottom of the windows can be no more than 44" from the floor to meet code for bedrooms. I know we're not the "code police" but I'm still curious.

 

[Terrel L. Shields]

Yep, the UWs will eat you alive. I know a fellow whose home burned and to help him rebuild a local architect designed an energy efficient home with berm. He had fits trying to finance the loan. Finally in frustration, he dozed the berm away, and bricked up to the berm line....sailed thru underwriting like a champ... how stupid.

This is another case of where the style of the home does not impact value except that created by the lenders themselves...and created without justification.

 

[The Warrior Monk]

This is what I said on similar style houses in my area:

Subject is partially bermed. Bermed houses are built slightly below ground level on 1-3 sides to aid in reduction of energy consumption.

Partially bermed houses have equal marketability to above grade houses in this market. No effect on value is indicated.

I wouldn't automatically make this assumption. The effect on value will depend on market area.

In my market, where just about anything goes, bermed and earth-sheltered homes aren't that common, but CLEARLY sell for less than other "standard" homes of similar size.

In fact, there were some improved properties I've come across that initially appeared to have sold for way below market value, based solely on their square footage. Further research indicated they were earth-sheltered/bermed.

 

[Scott R Marshall]

You may want to contact your client. Many lenders will not lend on "bermed" homes or other unique types of construction or if they do, they require at least a few comparables of similar design/construction, which if you do not have, may be problematic for the lender/UW.

Not saying you can't go ahead and appraise it without telling the client beforehand but in general terms I think it is professional courtesy to make the client aware of certain situations before submitting the report, with unique design styles being one of those instances.

 

[Terrel L. Shields]

CLEARLY sell for less than other "standard" homes of similar size.

see my post above...and CLEARLY this isn't a market reaction so much as a financial one.. The market is probably just as willing to pay for the house the same but it is a financial defect in lending...lenders presume a defect where one does not exist based on the lack of similar comps. The same applies to A frames, log homes, etc.

Where you do not find such market differentials among a non-standard design is in an area where there are invariably sufficient comps. So in the Mountains of Colorado, log home comps are common. In the SW, Adobe with flat roof is common... etc.

It is because appraisers do not find style matches that is affecting the value and has almost nothing to do with the "market reaction" to them or the comparable cost or life expectancy. Imagine how long it would take to market a three story colonial in a high mountain meadow or a log home on a Florida beach.

Berm homes get a bum rap.