Finished basement or not?

[DTB]

"adjustments for full or partially finished basements were made based on level of quality and utility of the finished area" or something like that. I have adjusted finished basements from 1000 to 100000 dollars based in quality and utility of finish. it all depends in how good it is, but i usually dont count as finished unless there is a ceiling (not exposed rafters), walls and flooring (not painted cement)also no exposed appliances (furnace h/w heater etc...) in view in the finsihed area. and there has to be a thermostatically controlled heat source.

And who is it supplying that detail on the comps? A part time agent six months after the sale is not an option.

 

[Zero]

Excellent observation Andrew, but I might suggest a little more tact for a "newbie" to the forum, right or wrong.

Once you've PO'd some of the "ole timers" (and I'm still a newbie myself), then you might attempt the direct attack, or not. But you are correct - 100$%

My apologies if it seemed otherwise, but I wasn't really attacking anyone. Besides, I save my supply of tact and diplomacy for shifty clients and underwriters.

That said, it is my opinion that when talking to the public, it is imperitave to clarify when I feel we are facilitating the spread of misinformation. It is misinformation that makes our relationship with the public so much more difficult, especially when some of us are out there making up the rules as we go along. I've had the headache-inducing basement discussion with hundreds of borrowers, LOs, realtors, etc. as I'm sure others have. Hopefully my previous post will save someone from a headache down the road.

 

[Lysander in Charlotte]

you could include in the above grade room count and gross living area.

I've actually reviewed appraisals in which the appraiser treated below grade rooms in this manner. Sad. This could be the result of poor training, incompetence, or outright fraud.

 

[DH Wilson]

For the large adjustment ones its where the sales price was typically in the Million plus range. I either have photographic proof, talk to the broker and sometimes talk to the new owner. Ive been in basements that cost more to finish than it would have cost to build a new house out back. (Like Ive said before - Rich people aren't like us - They're rich) If I feel my data or information is exaggerated Ill be more conservative on the adjustment. I'm not afraid to knock on a door (esp if its a non mortgage appraisal where they actually pay very good.) and a lot of people really WANT to show off their new house. You just have to ask.

I have in two instances counted the finished "lower level" in the main GLA of the building. Rule being that the building area was designed specifically as living area not as a basement and then finish it later. In those instances we did "slab up" adjustments taking off for the lack of basement and crediting the comps for having a basement. Some houses just dont fit into any conventional set of rules and you have to be able to work with what you have sometimes.

 

[Zero]

DH said: I have in two instances counted the finished "lower level" in the main GLA of the building. Rule being that the building area was designed specifically as living area not as a basement and then finish it later. In those instances we did "slab up" adjustments taking off for the lack of basement and crediting the comps for having a basement. Some houses just dont fit into any conventional set of rules and you have to be able to work with what you have sometimes.


I say: Whose rule? Where can I find substantiation for this "rule"? Since we cannot pick and choose which parts of ANSI to folllow, do we have another adequate standard in the making here?

Am I the only one bothered by all these made-up rules and guidelines?

I see this as Conceptual Anarchy in our trade and I don't think it should be tolerated. Now someone will try to make me look dumb because I am not smart enough to make up my own rules.

PS Cost does not equal value.

 

[DH Wilson]

Sooo, when you get the order to do a earth bermed home, converted missile silo, underground monolithic geodesic dome, custom cave dwelling or on the opposite site a land locked converted paddle boat that could be re floated or something like a house boat on Lake Washington in Seattle etc. etc. My guess is you would turn them down because if I'm correct none of them meet ANSI guidelines and since you perceive ANSI as the law and not the guidelines that do apply to most but not ALL homes for determining living area (and therefore value) they all must be worth ZERO.

You probably try and stick with the safe little boxes that conform to all the rules in the book with those little adjustments for features and amenities since it does make it easier, you don't have to be creative, you really don't have tothink very hard or read for 2 weeks to catch up monolithic or composite materials trends and issues, it keeps you very safe.

Then again maybe you have done that.

When I did my first 80,000 dollar adjustment for a finished basement or that 50,000 for landscaping (the guy i worked for at the time routinely does over a million dollar adjustments just for landscaping) it was tough, but It does get easier as time goes by.

I like doing the easy 960 sft 3 bed 1 bath ranch just as much as everyone else. BUT the trend is that AVMs are more and more taking care of that for us. So whats left? The ones that don't fall in the "book", the goofy container homes, the mud brick homes, the geodesic domes, the 200 year old mansions, converted fire houses.

To be viable in the future of this business you're going to have to specialize in an area of styles and divergent cases that are on the edge of the "book" since those properties cannot be defined by a computer model, at least not yet.

So, you ask how we came up with the rule of design vs afterthought all by our lonesomes - 3 very good appraisers sat in a room for an hour scratching our butts looking at the pictures, starting and stopping on fruitless ideas, saying "I dunno" alot and "We should have charged more for this POS" until finally our God of an MAI walks in with 35 years experience and says "Do a slab up and correct for everything above the concrete, geeze why do I put of with you guys, you're useless" (there was a little more to it than that but you get the point)and then leaves. We in turn say yep, write up the why and how we did it that way and put it in the report. The next time we said "remember that one the boss called us a bunch of wannabees over?"

Also with heavy military training and a lot of nuclear weapons handling I learned early on the difference between a guideline, a policy, a rule and a law. And - can, should and must.

 

[Zero]

DH:Thank you for admitting that you believe something only has value if it is considered above grade GLA.

Thank you for admitting that you do make up your own rules/guidelines.

Thank you for confirming my prediction about trying to make me look stupid for not making up my own rules/guidelines.

I do not see ANSI as the law. The problem I am trying to point out is that if everyone thought and acted "creatively," as you suggest we should with challenging assignments, our concepts would likely dissolve into relativistic appraiser-babble. No wonder AVMs are being brought in to kick us in the pants; they at least have the appearance of methodological uniformity. Too many of us are presenting creative writing assignments.

In my opinion, we should spend less time creating our own (misleading?)personal guidelines and more time explaining things in the framework of existing guidelines. As you said, you spent a lot of time, as I do, trying to do this and were then told to do it "another" way...boss man gave you the easy way out.

I agree that ANSI is not the best of all possible "worlds." If you and your colleauges have developed what you believe is a coherent, credible and reliable standard, you should by all means make efforts to present it for peer review and/or publication as such. I'm sure if it is as good as you say it is, many others could benefit.

Have a Holly Jolly Christmas

 

[DH Wilson]

Andrew,

Your welcome

As stated by the great Swayze, "Opinions Vary".

I was using "you" more so as a generality, nothing personal since you ( directly) are probably an extremely competent appraiser by the mere fact you're here.

You're right I hate doing creative writing assignments, I just wish there were more check boxes on the forms and the government forced everyone to live in simple ranches with no basements so I would'nt have to explain anything.

As I stated in my last post, I may be wrong. I did say that in only 2 out of several thousand has there been a desire or need to deviate from the guidelines which would probably match the statistical deviation of the homes that are actually built without taking the guidelines into consideration. There are those builders and architects who dont give a rats *** about any standard that hinders their creative juices. One of the houses was built by one of those people. Maybe "rule" wasn't what you wanted to hear, but if you saw a picture of the house even you would go dayum or have your flight reflex activated or both. (I was both). I have never seen a house like it nor will I ever again since is was destroyed 2 months after the assignment. Dont worry it wasn't because he was depressed at the very much lower value we had given the property than he expected (he was expecting a million dollar write off) He thought all those awards the house had received and all the publications it had been in really amounted to something like "value". I personally thought that if he died it would have been worth considerably more, but he wouldnt do it.

I have a book to write.

Have a very Merry Christmas,