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Finished Basement - GLA Or Adu?

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S is for spittman

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Not so quick question ... just received a HUD REO assignment which I have not inspected yet. On paper the property is a two story single family residence with a basement. The basement has it's own kitchen, living room, dining room, 2 bathrooms and 2 multipurpose rooms which I suppose could be used as bedrooms, however, there are no windows in those particular rooms. In my 18+ years of appraising, I have never seen a finished basement let alone one with all separate amenities, as I believe basements are rare in Texas [or at least in the rocky hill country area where the Subject is located]. Based on previous MLS listings, it looks like the original appraiser included the basement in the gross living area.

My question is shouldn't it be separated on a different grid line?

Can I call it an accessory unit even though the "sleeping" facilities don't have windows?

If I can't call it an accessory unit would it still be appropriate to compare it other properties with accessory units since finished basements are so rare here?
 

AMF13

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Basements are not generally GLA.
No windows and no outside access from the room, it's not legit bedrooms.
Uhh, Better you than me. See Terrel's basement thread. :peace:
 
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residentialguy

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Personally, I'd call it a finished basement and give any adjustment to the added amenities, if the market supports it. You start going in to ADU, etc, you're asking for a whole heap of trouble, such as permits, zoning, etc.

K.I.S.S.
 

S is for spittman

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where is the property located? (governing municipality)?...

It's in Pipe Creek, Texas - rural, unincorporated, no zoning


I can attest to #2 and #3 of that article having grown up in a house with a basement here in San Antonio. Dilapitated foundation and flooded every rainfall. Now I live in a newer neighborhood and I swear we "grow" rocks every week.


...if the market supports it. You start going in to ADU, etc, you're asking for a whole heap of trouble, such as permits, zoning, etc.

Like looking for a needle in a haystack. No zoning in this rural area. Wondering if I could still compare to accessory units for supported adjustments.
 
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Carnivore

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North Carolina
Well I would say this; If at all possible this appraisal would find its way to a GSE, then you have no choice but to segregate above and below grade GLA.
The below grade may or may not be similar market value in $, but none the less you still have to separate the two. So as a standard practice I always segregate the two.

I have had some subjects where the kitchen, living room etc were actually below grade and all bedrooms above grade. In my area its not common but you see it occasionally. How do I handle this; well the simplest way is in the reconciliation. I have not really been able to extract the data very well for the difference between a subject and comparable like this. The best you can hope for is some data and do what you can.

Lake Norman north of Charlotte has quite a few homes on the water where basements are fully finished with interior materials and refinements similar to the above grade GLA. Often the basement GLA is worth just as much as the above grade GLA. I think the difference with those homes is they don't suffer any form of functional utility.
 

J Grant

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Not so quick question ... just received a HUD REO assignment which I have not inspected yet. On paper the property is a two story single family residence with a basement. The basement has it's own kitchen, living room, dining room, 2 bathrooms and 2 multipurpose rooms which I suppose could be used as bedrooms, however, there are no windows in those particular rooms. In my 18+ years of appraising, I have never seen a finished basement let alone one with all separate amenities, as I believe basements are rare in Texas [or at least in the rocky hill country area where the Subject is located]. Based on previous MLS listings, it looks like the original appraiser included the basement in the gross living area.

My question is shouldn't it be separated on a different grid line?

Can I call it an accessory unit even though the "sleeping" facilities don't have windows?

If I can't call it an accessory unit would it still be appropriate to compare it other properties with accessory units since finished basements are so rare here?

ANSI standards and most lender requirements that above grade living sf is GLA and below grade is not counted as GLA ( no matter how well finished the below grade area or what value it has ). This is not an ADU, it is a basement where the owner divided it up into rooms and installed a kitchen, probably without permits. yes, value it separately on the grid. The fact that the original appraiser included basement in living area is incompetence imo .

IF basements are rare I'd recommend comparing it with comps having additional to main dwelling living areas such as converted garages or finished attics or enclosed porches.
 

Carnivore

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North Carolina
to go a little further; Just how do you determine what is below grade. Easy if you use the GSE Selling guide; I wont quote, but it simply says ANY part that is below grade of a level then all of that level is below grade and the SFT would be entered on the basement line of the FNMA Series forms. Is that grade equal to above grade in market value, depends...its all what the market says.

J Grant suggestion is very good, because it may be the only comparable you have to work with.

Having said that, I will always go back in time to try and find a more suitable comparable. Time adjustments often times are better(easier to extract data) than cramming another weirdo comparable into your analysis/report
 

Mike Kennedy

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upload_2017-12-8_8-50-54.jpeg
Pipe Creek is an unincorporated community in Bandera County, Texas, United States. It had a population of approximately 66 in 1990. It is part of the San Antonio Metropolitan Statistical Area. Wikipedia
 

glenn walker

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It's a Basement and I would place it in the basement grid not include in GLA .
Health & safety issues ?
Just if the range and oven catch on fire because there are no windows to escape out of and we either die by fire or smoke inhalation.
 
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