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Lender Request

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Metroappr

Junior Member
Joined
Jan 20, 2005
Professional Status
Licensed Appraiser
State
Michigan
Hi, here is a comment that the lenders is requesting I make changes to a report. I have not responded as of yet.

Vendor:

The client has read the appraisers commentary regarding ANSI ceiling height requirements, however, they feel the finished attic should be included in the GLA and bedroom count. The argument is that it is common practice by real estate professionals active in this market to include the finished attic area in GLA/bedroom count. The prior MLS listing included the area, and current sales and listings in the MLS also include their finished attic areas in the GLA/ bedroom count. Without regard to comparability to the subject, some examples of the market reporting in this manner are: 914 Donald (MLS #216063593), 723 Bauman (MLS #216066965), 1122 Bauman (MLS #216019840), 719 Bauman (MLS #216070119), 1013 Donald (MLS #215111115) All are "Royal Oak Bungalows" and have the finished attic area, similar to the subject, included in the GLA and bedroom count. This appears to be the accepted standard in the market area - please amend the report to include the second floor in GLA and bedroom count and select similar sales. Thank you.

Comment I made in original report below
Square Footage

ANSI Guideline Z765 for Ceiling Height Requirements


"To be included in finished square footage calculations, finished areas must have a ceiling height of at least 7 feet

(2.13 meters) except under beams, ducts, and other obstructions where the height may be 6 feet 4 inches (1.93 meters); under stairs where there is no specified height requirement; or where the ceiling is sloped. If a room’s ceiling is sloped, at least one-half of the finished square footage in that room must have a vertical ceiling height of at least 7 feet (2.13 meters); no portion of the finished area that has a height of less than 5 feet (1.52 meters) may be included in finished square footage".

The subject's 2nd floor does not fit within ANSI square footage guidelines. The 2nd floor ceiling was measured to be 5 feet 10 inches. The prior MLS listing erroneously reported square footage to include 2nd floor with and additional bedroom.

What I want to respond

Appraiser:


The appraiser understands "common real estate practices" for the marketplace, however this is not a common marketplace practice to include 2nd floor finished attics with a ceiling height of 5' 10" as square footage. Regardless of prior MLS listing of subject property or current MLS listing of similar comparable type homes, The ANSI guidelines read that 2nd floor ceiling heights are to be in quotes.


"To be included in finished square footage calculations, finished areas must have a ceiling height of at least 7 feet

except under beams, ducts, and other obstructions where the height may be 6 feet 4 inches ; under stairs where there is no specified height requirement; or where the ceiling is sloped. If a room’s ceiling is sloped, at least one-half of the finished square footage in that room must have a vertical ceiling height of at least 7 feet ; no portion of the finished area that has a height of less than 5 feet may be included in finished square footage".

Real Estate agents are not held to the same appraisal standards or reporting practices as licensed real estate appraisers are. It is never acceptable to use MLS listing data as the only source for reporting data. The prior listing of square footage and bedroom count has been reported erroneously.

The subject home is considered to be a 1 story ranch with a finished attic space. By including the 2nd floor as square footage, the appraiser would be committing a clear USPAP violation in ethics and appraisal reporting.

The typical "Royal Oak Bungalow" has 7 foot ceilings and was built for a bedroom use.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
the appraiser would be committing a clear USPAP violation in ethics and appraisal reporting.

I'm sure you didn't mean to write that as it is kind of , well, ridiculous. lol

Did you attribute any value to the finished attic, perhaps as much as the same floor area as the other GLAs?

Otherwise I agree with your basic methods as 5'10" is pretty low.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
You need to add that in order to sign the certification, the opinions must be your PERSONAL opinions, etc.

So it this the LENDER requesting this? The AMC? someone else? Tell them you will file an AIR complaint if they insist that you change it.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Last edited:

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Good response, except that I would change this:

By including the 2nd floor as square footage, the appraiser would be inflating the area livable dwelling permitted sf

Does your public records list SF under air? Also, if any of your comps had SF of attics included in the area of dwelling, I assume you subtracted them out?

If the finished attic contributed any value , did you account for it?
 

residentialguy

Elite Member
Joined
Mar 24, 2009
Professional Status
Certified Residential Appraiser
State
Minnesota
You can choose not to include it in GLA, but you can't choose to ignore it's contributing value. It makes it messy when other homes you're using as comps are including that space into the GLA and you don't on the subject..and quite frankly, you don't know the comps well enough to make that call. So, if the comps have that space in the GLA listing, then you have subtract that area on your report...and then add it back in on anther line item if they sold higher because of that additional area. Like I said...messy
 

Artemis Fowl

Senior Member
Joined
Mar 16, 2004
Professional Status
Certified Residential Appraiser
State
Michigan
I actually found a comp for this exact situation a few years ago. Made things less messy.
 

DTB

Elite Member
Joined
Jun 11, 2004
Professional Status
Certified Residential Appraiser
State
Illinois
It's interesting that appraisers can NOT make subjective comments/judgments but the lender can FEEL x, y or z.
 

djd09

Elite Member
Joined
May 20, 2009
Professional Status
Licensed Appraiser
State
Ohio
Tell them to write their own report and they can include any GLA they want.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
It's my report and my opinion and that ends it!
 
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