New construction w/ large crawl space added $12k to purchase price

[seeker20]

I’m looking to buy new construction in a subdivision where primarily one builder builds all the homes. This house is one of several plans that they have. But due to the slope that the house was built on they chose to build a very large crawlspace under a portion of the home which added $12,000 to the base price of that particular model/plan. My question is generally will an appraiser recognize the cost of that crawlspace even though it is not living space. I’m just concerned that the house may not appraise for its purchase price because of the addition of the crawlspace which is not living area. Any advice?

 

[Russ Kitzberger]

It seems you are concerned if the market value will equal the purchase price, since other properties do not have a crawl space. An appraiser might consider the cost approach and perhaps that $12,000 is reasonable for the cost of that item. However, cost does not always equal market value and that is something that can only be determined after an analysis is performed. In general, the overall property is valued, so it may not make a difference. For instance, if the site was sold at a discount or view created by that crawl space is very valuable, it might overcome an overimprovement of the foundation.

I assume you are using a lender. To save yourself time and frustration: It would be a good idea to explain to the lender the lack of similarly built homes in the area so they can hire an appraiser who has the skills necessary to value properties that are non-conforming. Alternatively, you can explain to the appraiser your knowledge so they are prepared for your project.

 

[jay trotta]

I’m looking to buy new construction in a subdivision where primarily one builder builds all the homes. This house is one of several plans that they have. But due to the slope that the house was built on they chose to build a very large crawlspace under a portion of the home which added $12,000 to the base price of that particular model/plan. My question is generally will an appraiser recognize the cost of that crawlspace even though it is not living space. I’m just concerned that the house may not appraise for its purchase price because of the addition of the crawlspace which is not living area. Any advice?

Cost does not equal value; in this instance it appears the cost may relate to anchoring the foundation in some way that meets code compliance / engineering requirements. The appraiser would be comparing sales in the area for the greater similarities to the subject and how the market reacts.
Hope that helps in some way.

 

[Tim The Enchanter]

What utility does the crawl space have?
Is it finished into a basement you can store things? Or just dirt under the house?
What do you get for the $12k? I am feeling skeptical it is worth a dime by itself.
Now if there is a view due to a hill and the crawl goes along with that, maybe the value is the view.

 

[Restrain]

IMO, you have a negative in terms of site utility (severe slope), increased cost due to foundation costs. Hopefully the appraiser can recognize this. However, it comes down to ‘do you want this home on this site’?

 

[Tru Red]

"My question is generally will an appraiser recognize the cost of that crawlspace even though it is not living space."

The short answer is no.

As others have already pointed out cost does not equal value. The cost for that crawl space is additional work for the builder. They do not work for free. I would be interested in knowing how they arrived at the extra $12,000. Lumber and added labor obviously. If the actual space adds no utility and it' simply extra work due to the slope of the lot.....I wonder..........are they giving you a lot discount adjustment on another line?

Do you really want that house on that lot?

 

[Mark K]

Wooded lots need clearing in order to build, often to the tune of $10 - $15K extra, that's after you pay extra for the wooded lot.

Sloping lots require deep crawl spaces costing more $.

Neither cost will be reflected in an appraisal. BTW, a buddy that's a builder says that a crawl space costs about $12K more than a slab on a level lot (2,000 sq.ft. home). The house with the crawl is worth no more than the slab house.

Builders like to tell you that cost = value, not so.

If he's built a spec home on a steeply sloping lot, chances are that he got the lot for a discount (he knew it was going to cost more to construct) and the discount should be reflected in the asking price. I.e., the house should cost no more than a similar house on a level lot. Any builder with a brain would insist on a discount on this type of lot.

 

[Terrel L. Shields]

Any builder with a brain would insist on a discount

That could be a problem you know

I doubt the appraiser will ignore the cost if presented the bid, but if there are no comps nearby that will support the extra...well, that can be a problem. And it might depend upon the scale of the sale, so to speak. Is this a $200,000 house? Or is this a $800,000 house...12k isn't much for one, but is significant to the other.

 

[glenn walker]

IMO, you have a negative in terms of site utility (severe slope), increased cost due to foundation costs. Hopefully the appraiser can recognize this. However, it comes down to ‘do you want this home on this site’?

In hill construction is always more costly, but that is something the builder is normally not able to pass on in the sales price. BUT if he can and if some appraiser will give it extra value then so be it. The truth is nobody really knows until they see this space.

 

[KHS445]

A couple of questions.

How large is the crawl space with regards to square footage?
How deep is the crawl space?
What kind of access is there to the crawl space?
What are the building requirements for footing depth in your area?
What kind of sub-surface material is present on the lot? Sand, Gravel, Clay, Rock, Dirt, Etc.?

In my area of Michigan footings are required to extend below the frost line which is 48" for standard construction. So most homes (90%+) have a basement with a few generally on the lower end of the scale having either a crawl or slab foundation, either way the footings are still 48" deep. About the only time you see a crawl or slab on higher end construction are homes that are situated on a site with a high water table.

The reason I ask the information about the crawl space is it may have more value them some think if it is usable and accessible. About 20 years ago my brother built a home in West Virginia where most of the sub-surface is rock. The site had a slope to it so plans called for part of the house to sit on a slab and part on a crawl. The contractor suggested that they reposition the proposed location of the house by about 10' and showed them how they could have an approximately 1,000 SF, 6' deep, concrete floor crawl space with an exterior entrance. He also suggested they install a set of double doors so it would be easier to store tables, chairs, bikes, lawnmowers, etc. in this space.

About 25 years ago I was appraising a new construction located on an inland lake lot. The owner's daughter was an architect and had everything planned out to the nth degree including the placement of furniture. Because of the high water table it was not possible to install a basement so she planned for a usable crawl space. There was a set of stairs located in a closet area. A cement floor was installed, lights were installed, along with a custom made workbench and storage cabinets. After walking down the stairs you sat down on a mechanics creeper and wheeled your way around. I think about that feature every time I am in that area.