Question about egress vs. non-egress windows

[Dennis J. Black ASA IFAS]

If you believe the two extra bedrooms would increase rent, then why not compare rents of 4 vs. 2 bedroom homes and apply the local GRM ? This leads to the value of the 2 extra bedrooms and would support an adjustment.

 

[Mike Garrett RAA]

Barbara......"not universally acceptable" is fine if you are appraising the universe; however, I am appraising "my local market" and basement bedrooms are the norm. Additionally, we seldom make adjustments for the number of bedrooms in single family residential appraisal (IN THIS MARKET). The adjustment is based on square footage. Many of the smaller, say 1000SF, ranch style homes have been converted from three bedrooms to two bedrooms making the master bedroom larger. These tend to sell for the same amount as the three bedroom homes.

I would not mix the income approach with the market approach for single family residential properties but that is just me. We have plenty of market data to determine if there is a market driven value for this feature. Income properties are another story especially since the form used is set up for this type of adjustment.

Back to basements for a minute.....we have homes here when none of the bedrooms are above grade. Really drives underwriters crazy. 0 bedrooms above grade is an automatic red flag! Suprisingly, these homes are readily accepted by the market. Must be that "cooler" feature.

 

[Verne Hebert]

Mike-

Good post! I am in full agreement with this market being apparantly quite similar with respect to architectural configuration.

Barbara-

Gotta' be careful with the "lawful". The typical buyer don't do lawful-the government does. In northwest montana only a couple of towns have required building codes, hence most areas here don't even have a "lawful".

The way I handle the basement bedrooms here with non compliant egress is just that. They have a closet and they are bedrooms- I state the basement windows do not have compliant egress; typical of this vintage of home with no measurable negative response by the market.

An additional thought-You are very unique in being certified. I was certified in UBC, UPC, and UMC in the early 80's. Remember that per USPAP your level of inspection is the level in which your "peers" inspect the property. Also you better handle this certification in your condition of appraisal section of the report--if you don't it can and will eventually cause problems.

 

[Larry Lyke]

Market comparison is the only valid criteria.

Depending on the market area -- in my market you can easily show a greater utility, i.e., thus price trend definitey upward for egress-, daylight-windows and walkout "Basements".

Without any of the above, it's just a finished Basement, which adds the minimum to value.

In fact, we generally have more widely used terms to identify these "enhanced" kinds of Basements:

--Finished Basement (mostly connotes a hole in the ground surrounded by soil (etc.) with one 18x26" interior hopper window on the short side of the oblong and two of same on the long side.

--Basement with egress window(s) (usually added later).

--Daylight Basement (usually crankouts just above partial foundation backfill.

--Walkout Basement (which 99% of the time has one of the above kinds of windows).

 

[Mike Garrett RAA]

Must be market specific!

In my market a ranch style home (60s ~ 80s) median price range will have an above grade square footage adjustment of from say $25 to $35 per square foot. The below grade will adjust at $15 to $18 a square foot.

 

[Ted Martin]

Basement egress windows are sized not for us full figured folks to get out but for the fire department person with breathing gear to get in to the basement.

 

[Larry Lyke]

My comments alluded to the fact that it would be market specific.

QUOTE
In my market a ranch style home (60s ~ 80s) median price range will have an above grade square footage adjustment of from say $25 to $35 per square foot. The below grade will adjust at $15 to $18 a square foot.
UNQUOTE

My metro market (The Twin Cities) is closer to $35-55 and $25-40.00, resp.

This represents a radius of 20 miles from the 2 core cities, skipping over the inner cities, which, of course, have hardly any ranch styles except for fill-in that were built in the later '70s and early '80s. And the latter has less appeal than the original vintage stock for their location.

 

[Mike Garrett RAA]

Everyone says our market has very affordable housing!

 

[BarbaraNJ]

Sorry for the delayed response------tough to surf the forum with interest rates below 6%!!!!!!!!!

Mike:
I did make an error by stating "universally"----I do realize that all regions of the country are different. However, the last time I looked, the 1004 FNMA we ALL use states right on the form: "LIVING AREA ABOVE GRADE".

Around here, if FNMA does not count that area below grade as living area, neither do we. We merely compare finished/unfinished basement and make the adjustment.

Further, I continue to believe that there is a significant difference between one, two and three bedroom homes. A one bedroom home will suit a single or couple, unless mom, dad and the kids all sleep in the same room. A two bedroom home is good for mom and dad and one child, or two of the same gender. Of course, there will always be homeowners who think its' ok to let a teenage daughter and son sleep in the same room. I have found that three bedrooms are usually what a family will shop for, even if siblings are the same gender. Nowadays everybody wants their own room. (Not like when I was growing up) While I don't make a bedroom adjustment, I sometimes make a functional adjustment for 1 vs. 2 or 2 vs. 3 bedrooms. Not universal, of course, but just my technique.

How do you get away with counting below grade square footage in total GLA when doing FNMA work??

For Vern---

Not sure, but I believe you are confusing ZONING with BUILDING codes. To my knowledge, ANY structure build to house humans in the US must conform to building codes---if, for no other reason, safety. (Like the egress windows)

However, in many areas throughout the country, zoning is not enforced or not applicable. This is most common in rural areas. That's why in some rural areas appraiser's are driven crazy by a 20 room colonial built in an area mixed with trailers, one-room cabins, and medium sized ranchers, all on lots from 1/3 AC to 20 AC. Unfortunately, when an area is very rural, the building officials don't even bother looking for "new" construction, and amatuer builders put up whatever they darn well please.

 

[Mike Garrett RAA]

What we have here is a failure to communicate!

1. GLA is above grade only.

2. Finished basements are common to this market and are used for living area. They are adjusted on the grid in below grade. Quite often a 5 bedroom house will have three bedrooms above grade and two below grade. It's still a five bedroom home.

3. Homes are not required to meet "current codes" when they were built under a previous code or lack there of. it's called "grandfathering".

4. Our market has loads of "empty nesters". We are heavily impacted by the military and there are loads of retirees. Quite often the smaller older homes are converted from three bedrooms to two bedrooms. Little, if any, market driven value difference.