Florida Room or Enclosed Porch

[Howard Klahr]

I have a slightly different approach toward addressing converted space within the subject and comparables. In the end however, it seems we all get toward the same place. If a garage or patio has been converted into living space (i.e. – HAVC, finished walls and floors, etc) I will include this area as part of the gross living area. However, I will also adjust downward for the lack of a garage or patio if one has not been added to the property. In addition, I take into account the resulting layout of the additional living area in relation to the original improvements. There is often functional obsolescence as the resulting flow through the rooms does not meet typical market standards. (i.e. – garage conversion requires access through kitchen or even a utility room) The end result is that this additional space does not contribute to the overall value at the same net rate as would a direct adjustment for typical living area.

In my experience, this most often occurs in older neighborhoods where land value has not risen to the point of justifying teardown re-development. As a result, this type of modification becomes common within the subject market area/neighborhood. Conversations with buyers, sellers and real estate agents over the years have indicated that this approach most closely represents the actions of market participants.

In regard to permits, building codes etc. unless I have direct knowledge of illegal additions/modification, I address the issue with special conditions.

“Our inspection of the property is limited to a cursory overview for valuation purposes only and is not to be construed as a home inspection. All electrical, plumbing and mechanical systems are assumed to be in proper working order. An inspection by a registered/licensed home inspector or engineer is recommended for further information regarding details on the condition of the subject property.

Although there have been additions to the original subject improvements, we have not researched the permit status of the subject improvements as this is outside the scope of our assignment. We have therefore assumed that there are no violations for the current improvements and that all codes, regulations and permits have been properly addressed and/or obtained. In the event this information is inaccurate, we reserve the right to modify this analysis, if so warranted.”

None of this is intended to indicate that there is only one approach to this issue or that one method is better than another. This is just how I chose to address this item within reports. Comments, suggestions and discussion are encouraged.

 

[Wendy]

I have a room in my house described as above. Old screen porch now enclosed w/ h&a and finished to match the house. The original sliders are still in place.

To me it is part of the living space. Maybe not to the next guy. If it were my report, I would avoid using an enclosed florida room as living area if my subject was not the same. If I was forced to include it, I would also add a 4th comp that better matched the subject. Think of it this way....Does a 1900's house have the functional utility as a 2005 house? Probably not. You never know if the enclosed florida room "works" with the original plan or not. Apples to apples.

 

[Chris Colston]

I have a room in my house described as above. Old screen porch now enclosed w/ h&a and finished to match the house. The original sliders are still in place.

To me it is part of the living space. Maybe not to the next guy. If it were my report, I would avoid using an enclosed florida room as living area if my subject was not the same. If I was forced to include it, I would also add a 4th comp that better matched the subject. Think of it this way....Does a 1900's house have the functional utility as a 2005 house? Probably not. You never know if the enclosed florida room "works" with the original plan or not. Apples to apples.

That's why I look at how the assessor values the space before I make the decsion to include it or not.

 

[Wally Jones]

Chris,

Your enclosed porch is a good example, I think, of what Debora may be talking about. If your place was listed for sale, some agents would include your porch as part of the GLA and some appraisers (assume you're not going to "help" them!! ) may look at the workmanship and count it as GLA also. Once the sale is complete, Debora may be looking in your neighborhood for a comparable and see the description of your place and want to use it in her report. The listing has one GLA, the public record shows something different. What should she do?

My point was that sometimes, the permit office might be able to help out by showing a permit was pulled but it isn't in the tax records yet. In such a case, the GLA shown in the listing might be close to reality. Now, Debora will have to try and determine if the addition is really just a "glorified" porch or does it really meet the definition of GLA? Next, she'll have to see how the market reacts to such additions. With a bit of luck, her research will find suitable comparables more similar to her subject (i.e., no "Florida Room") and she'll be in good shape. Otherwise, she'll have to use your former home to support her opinion, not realizing how much damage was done by those little wind storms last year!

If all appraisers would do as you suggest and place such additions on the below-grade line, it sure would make life a little easier for some of us! Instead, many are in too much of a hurry to "get 'R done" and fail to do the proper research as to why there may be a discrepancy between the GLA in the public records versus that in the MLS.

Sigh.

 

[Chris Colston]

Your enclosed porch is a good example, I think, of what Debora may be talking about. If your place was listed for sale, some agents would include your porch as part of the GLA and some appraisers (assume you're not going to "help" them!! ) may look at the workmanship and count it as GLA also. Once the sale is complete, Debora may be looking in your neighborhood for a comparable and see the description of your place and want to use it in her report. The listing has one GLA, the public record shows something different. What should she do?

Include it as "below the grade" living area. As long as everything is consistent.

I'm not sure about Lakeland, but in Brevard, the assessor's office reports Florida Rooms for all converted garages and enclosed porches. Even gives the size, so it is real easy to remove that area from the agent's claim that "living area is larger than shown on the tax assessor's card".

 

[Wally Jones]

In Polk County, the assessor is inconsistent on how those enclosed areas are treated. In the past two years, they have begun calling almost everything which appears to have been added to an improvement an "unfinished/finished enclosed porch". Examination may reveal it's actually a porch to which a screen has been added, a totally enclosed/heated garage, a covered porch to which a knee-wall has been added, etc.

Bottom line: investigate appurtenances as much as possible and don't believe much of anything you read!

 

[Jo Ann Meyer Stratton]

I never rely on the assessor's information--although there is a lot of good data in their files. I create very detailed sketches and for each area of the home that was constructed, added on, enclosed, etc, etc, etc. I sketch separately. The original structure I will list in Apex as "Livable Area". The enclosed garage/patio/porch (depending of workmanship, materials, interior finish, etc, etc) might also be listed under livable area but identified as "Enclosed Garage/Patio/Porch", and additions might also be listed under livable area but identified as "Addition" or "Addition 1972", "Addition 1996". That way when a reader of my report looks at the sketch they will be able to understand what I have included or not included in the livable area on the 1004. There really is no blanket rule of whether an "enclosed patio, etc" is livable area or not--it all depends on many, many factors--materials, workmanship, interior finish, heating and cooling situations, access, traffic flow, market reaction, etc, etc, etc.

 

[Debora Lozano]

Thank you everybody for the great discussion. By the way, I'm in Orlando. I'll have to update my profile.

 

[Lobo Fan]

Battling with a lender on this issue right now

I have a flip going where someone bought a 1600SF house with a 400SF glass sunroom. They painted, new carpet, tile, toilets, kitcjen cabinets and appliances. They put three 4 foot electric baseboards in the sunroom, and included it in the GLA. They have it sold for $197,000. I appraised it for $163,000. This is in a neighborhood where renovated houses are going for $85.00/square foot.

Marshall & Swift sets the cost approach at about $75.00/SF for the main house and $35.00/SF for the sunroom. I used that ratio to come up with the adjustment for the sunroom.

I get a formal request to reconsider along with a printout of comps. They are insisting that I include the sunroom in ther GLA even though it is obviously lesser construction. Plus these sunrooms are maintenance nightmares, they have a massive heat loss and gain, and sonner or later they all leak.

The funny part is that the best comp they sent me was at 2000SF at $178,000. Still nowhere near the $197,000 purchase price and actually less than my $163,000 after adjustments.

Anyway, I am sticking to my guns on this one.

 

[Otis Key]

This is in a neighborhood where renovated houses are going for $85.00/square foot.

Marshall & Swift sets the cost approach at about $75.00/SF for the main house and $35.00/SF for the sunroom. I used that ratio to come up with the adjustment for the sunroom.

Anyway, I am sticking to my guns on this one.

Isn't it about time you got off the $$/sf???? I mean, do you appraise to the $$/sf or to the market? The $$/sf is a selling agent or HO concern. I don't even consider it! No offense Chuck, but that's about a record you're doing when you post a minimum of twice a week about the $$/sf. We don't perform an appraisal to that. The brokers, agents & HO's are the ones that care about because you can manipulate the final report showing an opinion of value by manipulating the SIZE of the sales.