Living Area Below Grade

[Mike Boyd]

I agree with Greg. I wonder why?

Mike G. .......I do not agree with you on this. If some or all your comps have below grade living area such as the subject, you would end up with an unintelligible report if you break out the basement on the subject. Unless you have inspected those comps and measured that basement, how can you adjust properly? I would agree with you on a true, 100% below grade basement, but when one entire side is at grade and maybe half of 2 other sides is at grade, and assuming it is heated/cooled and finished just as the upper level, to me that is living area. I don't care what ansi says, common sense rules on this issue.

 

[Mike Boyd]

Flat landers just do not understand hillside homes.

 

[Mike Garrett RAA]

Mike... you can disagree all you want, the guideline is the guideline and below grade is below grade. I didn't create the rule. One of the easy ways I have found to determine what is below grade is to ask the question..."are the walls concrete?"

I forgot to comment on the statement that "in some markets below grade is considered living area". Sure it is...it just isn't counted in the GLA. Out here it is very common to have full finished basements. Usually a family room, couple of bedrooms, and a bath.

Just for kicks, get out your Marshall/Swift Cost-book and do a cost approach on a ranch style average quality home with, say, 1,000SF. Also do the cost on finished basement...notice the difference?

 

[xm72mhd]

Oops, there are concrete houses on slabs in Rocky Ford and Boone and they aren't underground. The new ones are "green" (in the environmental sense). Now what? I think its pretty clear that Fannie is in the dark, but that just means we have to remember when dealing with Fannie we just have to DO IT! Just remember Fannie-speak is almost always different and there is not a real reliable Rosetta stone for translation since both Fannie-speak and English use the same words for different things and no body but us, UW's and Fannie gives a hoot about Fannie-speak anyway. I've understood for some time now that distinguishing walkouts from above grade is only a Fannie exercise in many markets that otherwise consider the two levels to be equal in value and utility. Indeed, in some markets basement sf is equal to first and second floors in value since buyers are looking for sf to accommodate all of the kids and other stuff they have and they don't care if the house is a ranch with a basement, 2 story or a split. Explaining that satisfactorily to the Fannie-speak trained is a challenge-but that's why we get the big bucks.
For some unknown reason Fannie just hasn't caught up yet, maybe never will or on the other hand might surprise us. Anybody want to lay odds on it? Just don't expect to make sense of it when dealing with Fannie, ever. That's just the way it is.

 

[Mike Boyd]

Mike G. .....GUIDEline. Not a mandantory rule for all situations. I could agree with you if that below grade area was all open space, no bathrooms, separate heating/cooling (or none at all) and no direct access to the upper level. By that I mean an open stairway that you can't shut off. On the MS GUIDE it would be similar to a conventional 2 story house PSF. It might be different if your public records and real estate agents split the area out as far as room count and square footage, In my area, all we have are totals.

 

[Michael Geis]

I absolutely agree with all of you who say the guideline is the guideline. I also understand construction costs and all of that. I have my Marshall & Swift right next to me. However, breaking this house and comps down using Marshall and Swift would yield a construction cost of over $200 per sq. ft. using below grade only. This is just not computing in my mind. Besides, other than being totally technicall correct, what is the point of backing out the sq. ft. and making the same adjustment under the basement area as the GLA. If you do that then what is the difference. That argument defeats what was said about concrete costing less (I know that's true). Oh well, what makes sense in this business anymore anyway?

Anyways, I'm working on it now to make my wonderful client happy. It's just such an ugly crappy looking report doing it this way. Am I allowed to say crap in here? Sorry if I'm not.

 

[Wendy]

Mike,

I understand your pain. I too hate writing an ugly report. Sigh....what we do to make clients happy!

 

[Em Tee]

If you're going to break out the basement area for your subject, then you'll have to do the same thing for your comps. If you don't, it's like comparing apples and oranges. Either you do them all as GLA, or break them all down to show the basement area on a separate line. Either way, it should come out the same, right?

 

[Michael Geis]

Mary,

Yeah, it will be the same value, but the all of the adjustment limits are out of whack. And there are some huge adjustments that weren't in there before. So, overall, I like it a whole lot less this way than the other.

 

[Hall McClenahan]

Just a quick question for those who have these types of homes.

around here the current style name for these homes are "reverse 1.5 stories" has anyone else heard that name or is that a creative term specific to this area.

Hall