Question about egress vs. non-egress windows

[Douglas Mackay]

I'm doing a conventional appraisal of a 1940 vintage cottage (4/2/1 room count with 704 SF up / 616 SF dn). This cottage has had egress windows installed in the two basement bedrooms plus two additional egress windows in the family room. The home sold in 1999 for $83,500 (with the egress windows installed). No improvements have been made to the home since this prior sale.

The Realtor did his CMA adding $6,000 for the egress windows to all of his comparables. The sale is pending for $94,900. I'm comming in at $90,400 with good comps similar in size and location but with no egress windows. There is insufficient data to accurately do a paired sales analysis to determine the contributory value of the windows. A typical buyer might like the fact that egress windows are present but in my opinion there is little or no contributory value for this improvement. I do agree that if this sale was for a rental, then indeed added value may be warranted in that these additional basement bedrooms would be included and command higher rents (4 vs 2 bedrooms).

I would appreciate any feedback from the gallery as to how you would deal with this situation.

Thanks...

 

[Pamela Crowley (Florida)]

Guessing here since I don't deal with basements.

People will use those finished downstairs rooms as bedrooms with or without the windows. The windows are an added value and add safety, but cost does not equal value and would have to say that this case would be another example of that.

Ask the Realtor for her statistical analysis of her additional $6,000 of value for these windows. ROTFLMAO

If there are no other sales with these windows where you could justify an adjustment you really shouldn't do it - (try real hard to find something). BUT, I would explain it fully and maybe give it up to $1,000 added value as a judgement/opinion call. Up to me, that would be it. Sometimes, our judgement/opinion is all we have, we use it and explain it and get on with our life. I cannot imagine those windows adding $6,000 in value, then again, it's not my market. This post is a WAG.

 

[Mike Garrett RAA]

I think you answered your own question!

 

[Farm Gal]

Doug:

A Knowlegable Buyer would recognise the safety inherent in thier children being able to exit the rooms.

Most buyers are not knowlegable.
8O

Like Mike, I think you answered your own question.

 

[Ted Martin]

In other segments of your market can you measure the buyer reaction to different levels of basement access? By comparing basements which are fully in ground, daylight (egress windows), walkup and walkout? Granted you probably won't be able to transfer the adjustment from a new home with a sale price double that of your subject's, but it might give you a little insite into the though process of the local buyers. Also given the extent of the remodeling, could not some of the dollar difference be associated with a more extensive and higher quality of basement finish in the subject. If the homeowner is going to spend a couple of thousand or more on each window, wouldn't it also make sense to upgrade the electrical, mechanical, trim and finish in these rooms beyound the more common paneled walls, drop ceiling and less than builder grade carpeting typically found in "old bungalow basements". Another factor I might consider in my market is that these old bunglows often seep during periods of heavy rain whether or not it is disclosed buyers around here discount the finish and storage contribution of these basements. If they dug up your subject's basement to install the larger window wells did they also waterproof the basement, thus increasing it's function and utility?

 

[Verne Hebert]

I can tell that over here in the Flathead buyers do not seem to care if the basement windows are not compliant. In just the past three years the realtors have been covering their butts with listing text saying basement windows are not compliant.

Unfortunately there is little, if any, retroing of these due to the high expense. So I can't tell what the adjustment is here! My gut would tell me however that the market would pay something for them............but not for egress, I don't think--For the additional natural light.

I am sorry I couldn't help more.

 

[Ted Martin]

Based on the last sale price it looks like your market is a mirror of mine, 4%+/- per year appreciation.

 

[Larry Lyke]

I pretty much agree with the Gallery:

#1. If these egress windows are the climb-out n'up a tiny ladder version wherein the foundation walls are backfilled to the top of the window itself, they only add for safety value and legitimacy of use of rooms as bedrooms, etc..

#2. However, if these egress windows are of the daylight version wherin the ground meets the foundation at or below the window level, they add ambiance in addition to the above advantages.

#3. It's not hard to justify a couple thousand for the latter just by straight out buyer appeal by defintiton when none of the comps have same either, without even trying to prove the paired theory, which is often tantamount to backing into a whimsical [fan] justification for minimal oomph in adjustment increase.

 

[Mike Garrett RAA]

No grandfathering???? We have thousands of homes with basement windows so small only a rat could slither out. Have not seen any evidence of market reaction to them. In fact, I owned one for nearly 20 years to the day. Full finished basement, only egress was up the stairs. It has sold three times since I moved out 14 years ago.

Now code (new construction) says.....there must be at least one window large enough for a mature full figured person to climb out and up the little metal stairs. Came in really handy a few weeks ago when we had a full roll of carpet to get into the basement. Would have made a mess out of the stair well.

Out here, in the wild wild west, people enjoy living below grade. Much cooler in the sumertime. All new homes have a drain pit with sump pump. Of course we are in the middle of the worst drought in recorded history so little or no water problems.

 

[BarbaraNJ]

There are two interpretations of this issue.

As a state Licensed Building Inspector and Building Subcode Official, I spent three years learing the BOCA and CABO codes, which are soon to be replaced nationwide by the International Building Code. (various states are slow to adopt new regs.)

The ONLY reason to add egress windows to a room where there were none--no matter below or above grade---is to be able to Lawfully call the room a bedroom.

The general rule is that Existing bedrooms build/approved at time of original construction are allowed to remain as sleeping rooms. However, any and all New renovations to the home must get permits, and if the room is to be used for sleeping it must have one conforming (code at time of renovation) egress window.

What does this mean to an appraiser??? Putting on my State Certified appraiser hat, I will tell you that the increase in market value rests in the number of bedrooms. By your description, it seems that the home had two legal existing bedrooms. When the owner finished the basement rooms, he/she was asked the use of the rooms. If he/she said "Bedroom:, then he/she would be required to install the egress window to code.

I believe that most appraisers would tell you that they indeed value a three of four bedroom home higher than a two bedroom home.

Personally, I would make a small adjustment, as basement bedrooms are not universally well received.

Sorry I can't help you with the "paired sales analysis". Hope you charged enough !!!!!!