I'm buyer, have closed, appr sf under by ~750 sf

[Pat Butler]

Certainly sounds like a really bad appraisal, but I'm assuming the appraisal was ordered with the lender as the client. It should be irrelevant to you.

If you want an accurate appraisal then you could always engage your own appraiser.

 

[TheProfessionalMan]

Why not just order your own appraisal to ease your mind?

Because Pam, it's much smarter if there was an error in the report that already caused me to get a better deal on my house, to take that advantage, and then go back to the appraiser and have him fix the report (again, if there was an error) so I can know how big of a profit I just made.

 

[johnnyboygirl]

Because Pam, it's much smarter if there was an error in the report that already caused me to get a better deal on my house, to take that advantage, and then go back to the appraiser and have him fix the report (again, if there was an error) so I can know how big of a profit I just made.

Or, Professional One, it could just be that I'd still just like to understand the one I already paid for. Paying $700 again doesn't make much sense if the first one may be right based on this below grade issue.

Surely since you're a professional you realize that the appraisal didn't get me a better deal. It sure didn't change the selling contract. If you didn't realize that then you learned something today!

If one of the previous helpful appraisers can give me some insight I'd still like to know if he possibly actually split the basement rooms in half and counted half of the room as "walk out" or if it still sounds like a mistake, as Pam suggested.

 

[TheProfessionalMan]

You make a good point about the selling price not being affected.

What I meant to say was that if the square footage is very wrong and under calculated, and correcting the mistake would result in a higher home value, there is a possibility that the seller would have breached the contract to avoid getting hosed; if the value difference was large enough and there wasn't any stipulation about such an occurrence. In that case, the better deal was avoiding all of that nonsense.

Even though you paid $700, the report is actually the bank's property (the bank was the client I believe), and I'm not sure if anyone has mentioned this yet, but as far as contacting the appraiser we are under requirements that bar us from talking about appraisal results with individuals that are not the client; contacting the appraiser probably won't work.

As far as deciphering the appraiser's measurements and reasoning I wouldn't be surprised if someone here can figure it out.

 

[Pat Butler]

Can you upload a copy of the appraisal? There's too many issues going on that would be dependent upon other things in the appraisal. Not being able to see the entire picture makes it difficult to figure out what is going on.

You can 'black-out' any data on the appraisal with a marker prior to scanning it there's anything confidential.

 

[Terrel L. Shields]

Just shoot me....***** on a Harley...I just walked into the Magic Kingdom where basement are turned into GLA and profits are made on appraisals...

 

[johnnyboygirl]

Even though you paid $700, the report is actually the bank's property (the bank was the client I believe), and I'm not sure if anyone has mentioned this yet, but as far as contacting the appraiser we are under requirements that bar us from talking about appraisal results with individuals that are not the client; contacting the appraiser probably won't work.

Thanks for your reply, ProfessionalMan. I had responded sooner, but things went wonky when I submitted it, so sorry for my lateness.

I don't think the seller would have been able to hold up the sale because in our area they aren't "allowed" to know the appraisal price. We sold our home earlier in the year, and it sold quickly because we priced it realistically (it is a buyer's market) and I was dying to know what it appraised for! Our neighbor said we asked too little, our agent too much, but two competing offers got us a great price. Did the buyers get a bargain or did we sell high in today's market, if there is such a thing today? Anyway, only the buyer and bank know the appraisal value so I have no idea what it sold for.

With this purchase I was mainly worried that asking about our buyer's appraisal would obligate the bank to do something to reverse the closing. Given the accusations aimed at appraisers in the recent crash I wouldn't be surprised if there's some weird new regulation that can negate a sale. Nobody has said that's the case, so I suppose not.

We plan to stay in this home for a looong time. If the bank is the client and I can't talk to him directly then there doesn't seem to be much point in questioning it further. Given that any refi's or home improvement loans we do in the future will require a new appraisal I think I'm done with this. The only question I wish I had an answer to is whether or not the appraiser could have split the below grade rooms in half as I described in my previous post. That just seems bizarre and wrong.

I'll watch the next appraisal (and hopefully we'll be the client and we won't be selling!) more closely.

Thank you all for your help. You've got a tough and often thankless job today. Hang in there!

 

[Pat Butler]

What you need to do in the future is to make sure your real estate agent provides you with the necessary comp data so that you are comfortable with the selling price. The appraisal that is done for lending purposes shouldn't be relied upon by you.

Fannie has certain requirements with respect to how recent and how proximate the comps are to the subject property. Those guidelines encourage the appraiser to use data that may not always be the best data for your intended use. There might be older sales or sales that are farther away that might be better choices that your agent can provide to you.

 

[Daystar]

Evaluating Above-Grade Room Count (from Fannie Mae Guidelines)
The most common comparison for one-unit properties is the above-grade gross living area.
Appraisers must be consistent when calculating and reporting finished above-grade room count
and square footage for the gross living area above-grade.
A level is considered below-grade if any portion of it is below-grade—regardless of the quality
of its finish or the window area of any room. A walk-out basement with finished rooms would
not be included in the above-grade room count.
For units in condo or co-op projects, the appraiser must use interior perimeter unit dimensions to
calculate the gross living area. In all other instances, the appraiser must use the exterior building
dimensions per floor to calculate the above-grade gross living area of a property.
The following must be observed when calculating and reporting above-grade room count and
square footage for the gross living area:
• Only finished above-grade areas can be used in calculating and reporting of above-grade room
count and square footage for the gross living area.
• Garages and basements, including those that are partially above-grade, must not be included in
the above-grade room count.

 

[johnnyboygirl]

Evaluating Above-Grade Room Count (from Fannie Mae Guidelines)
The most common comparison for one-unit properties is the above-grade gross living area.
Appraisers must be consistent when calculating and reporting finished above-grade room count
and square footage for the gross living area above-grade.
A level is considered below-grade if any portion of it is below-grade—regardless of the quality
of its finish or the window area of any room. A walk-out basement with finished rooms would
not be included in the above-grade room count.
For units in condo or co-op projects, the appraiser must use interior perimeter unit dimensions to
calculate the gross living area. In all other instances, the appraiser must use the exterior building
dimensions per floor to calculate the above-grade gross living area of a property.
The following must be observed when calculating and reporting above-grade room count and
square footage for the gross living area:
• Only finished above-grade areas can be used in calculating and reporting of above-grade room
count and square footage for the gross living area.
• Garages and basements, including those that are partially above-grade, must not be included in
the above-grade room count.

I must have been very unclear in my other notes. He didn't include the walk-out basement as normal square footage even though it's a fully finished level of the house. He made it a finished walkout basement. But, he made it walkout basement with a 14' wall and not a 26' wall. My issue here isn't how he classified it. My issue is he seriously reduced the square footage of that lower walk-out basement level. He basically chopped off all the rooms at 14' even though they are larger than 14'.