Noncontiguous living area

[V. Nightshade]

Has anyone ever considered non-contiguous living are as part of the GLA of a property? I'm appraising a waterfront property (a gated beach community) with a 2 br 1.5 bath main house and a separate studio with full bath. Both buildings are built with the same (custom architecture, excellent quality), and the assessor considers them one. To break it out is going to end up needing a lot of compensating adjustments, so I wondered if it were ok to just call it all GLA. This is a portfolio lender, and I don't think they sell this loan to FNMA. I don't know if that's relevant either, but I'm putting it out there. Several years ago I did an appraisal in a similar beach area with connected buildings forming a compound, and I did call it all GLA as it seemed most reasonable from a market perspective.

 

[CANative]

Don't lump it all together as GLA. That would be improper.

But I can see treating it in the sales comparison approach to treat it that way if this is how the market would treat it. Sometimes waterfront property is forgiving of this type of thing. It might even be superior to all living area contiguous (rent out the space, guests, relatives, hobbies, etc.)

 

[Terrel L. Shields]

Ask the client if it was going to secondary market

If not, then I would explain and adjust accordingly. I have a similar one - about 30 -40 foot from the other...Our assessor treats them as separate buildings on the same parcel - I broken each out but they both were of the same designer and quality/age/design

 

[V. Nightshade]

Thanks. Terrell, in your case the assessor breaks it out so putting them together seems improper. In my case it's included as one. I'll probably follow Neil's advice since I hate doing anything improper lest I get raided by the USPAP police in the middle of the night. But what I'm trading propriety for is doing an across the board adjustment....unless I get lucky. Fortunately, I don't think this lender will care as long as I explain what I'm doing and support my method and conclusions.

 

[The Warrior Monk]

I've come across a few instances over the years where the living area was non-contiguous. One example including the kitchen, dining room, and living room in one building, and the bedrooms and bathrooms in another. I also appraised another property where the living area was divided into three distinct sections, connected by decking.

• One building had a kitchen with dining area, two bedrooms, and one bath.
• The second building had the master bedroom suite.
• The third building had the living room, family room, and an additional bedroom suite.

It depends on the function of the buildings, and how the market views such properties. In some cases the GLA of the property is the total of all of the buildings. In most cases, though, the additional buildings are simply accessory structures.

 

[Mr Rex]

If you count it as GLA, be sure to include one hell of a Functional adjustment.

 

[J Grant]

It's not about how an assessor counts it nor whether or not the loan is FF backed, it's about credible and supportable as well as what is industry accepted as living area (GLA). You never know where reports end up and loans even portfolio loans can end up sold so do the report you can stand behind .

 

[Mr Rex]

Those net and gross adjustment numbers just scare the crap out of some folks.

 

[J Grant]

with a 2 br 1.5 bath main house and a separate studio with full bath

It is what it is, a main house with a small guest cottage.

Several years ago I did an appraisal in a similar beach area with connected buildings forming a compound, and I did call it all GLA as it seemed most reasonable from a market perspective.

Each appraisal is different. Not sure what you mean by connected buildings versus the subject, which is a house with sep cottage, however doing this one the wrong way to match an appraisal done several years ago (which may or may not have been done correctly) makes little sense. You need similar comps to subject , a small house with sep guest cottage or next best an attached in law suite...sounds like this area has these kinds of layouts from your description.

 

[nicholz12]

It's not about how an assessor counts it nor whether or not the loan is FF backed, it's about credible and supportable as well as what is industry accepted as living area (GLA). You never know where reports end up and loans even portfolio loans can end up sold so do the report you can stand behind .

She' right about that.