• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Finished Basement as GLA or not?

Status
Not open for further replies.

GaryDodd

Freshman Member
Joined
Oct 24, 2002
I'm getting different stories on whether I can count below grade finished area as living space. I have done many appraisals with finished basements and have not counted the living space as GLA per ANSI std (04/08/1996). However, I will be doing an appraisal later today on a subject where the children's bedrooms are ACTUALLY in the finished basement. I asked what the upstairs bedrooms are being used for, and they said exercise room and tanning room. SO, since they are actually living in the below grade finished area, can I count this as GLA???? Also, its not a customary practice for this to occur in this area. THANKS!
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Also, its not a customary practice for this to occur in this area.

That's the key to your answer. Call it what it is, not how THEY are using it.
In my area, due to the mountains, we have many "one bedroom" homes. The real estate people list them as 3 or 4 bedrooms, but they are not. The finished basement is almost always of a lesser quality finish compared to upstairs.
 

Dave Smith

Senior Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Wisconsin
Gary:

This is straight from the Fannie Mae guidelines. Read it closely and you will have the answer to your questions.

Section 405.06 – Gross Living Area

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. For units in
condominium or cooperative projects, the appraiser should use interior perimeter unit dimensions to calculate the
gross living area. In all other instances, the appraiser should use the exterior building dimensions per floor to
calculate the above-grade gross living area of a property. Only finished above-grade areas should be used--garages
and basements (including those that are partially above-grade) should not be included. We consider a level to be
below-grade if any portion of it is below-grade-regardless of the quality of its "finish" or the window area of any room.
Therefore, a walk-out basement with finished rooms would not be included in the above-grade room count.
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 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.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Just one more little add on:

It really doesn't matter what the current occupants are using each room for. You have bedrooms upstairs, if this house was vacant - you wouldn't even question this issue. They have bedrooms upstairs and finished rooms in the basement. Not even a functional problem.

I just hate it when I start over-analyzing when I don't have to.... and tend to do that toooo often. Vacant houses are easier.
:roll:
Now, just give yourself the old palm to the forehead "Duh" and finish the report.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Fannie Mae's sentence toward the end of that section about consistency is the key. If you can find all comparables with similar below grade levels and know what the square footage of each level is, then above grade on one line, below grade on another line. If you can not find out how much square footage is on each level from anybody, and you can not go measure each comparable and tromp through the interior of those homes, you might have to report all areas on one line so that you will be consistent. And then you provide lots and lots of explanations and then some more explanations. But the two important things are to be consistent and explan.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
What's a basement? Just kidding. The answer is "not above grade living area". Hopefully there are like/ind properties in the neighborhood and you can find other homes with basements to compare it to. No matter how well finished, you should count it as "below grade". Here in TX, there are few basement homes, but we are required to provide similar style homes with similar finished basements when we do appraise one. Luckily, where there is one, there are usually others. Not too many, but at least one.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Finally an easy question......"NO!!!!!".
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks