Question Regarding Finished Above Grade Living Area

[Dan Feia]

Hopefully someone can help me clear something up with a disagreement I'm having with a review performed on an appraisal I had completed an appraisal some time ago....

I am getting the chance to "re-but" his/her findings, but was hoping some one could back me up with some solid info from a well "guidline" somewhere....I have been unable as of yet to locate anything dealing with this specific "issue"...

Basically the situation is this, (I appraise in MN and WI as a side note...) the home was an approximately 80+ year, added on to several times, two-story farm house, in relatively decent shape.

For simplification purposes, I'll round the numbers here....

The total FINiSHED above grade living area I had calculated was 3000 (again rounding), however there was a room on the second level of the home (approx 500 sq.ft most often it was used as a bedroom/den), situated above a DEFINITELY heated/finished kitchen, with an OPEN stairway directly to the room.

The room is completely finished in regards to it having insulated and drywalled ceilings/walls, carpeting and double paned wood windows like the rest of the home...

It DID not have a duct specifically running to it, however (as with many older 2-story homes in this region) the open (non-bending, approx 7-8 step, stairway directly to the room, provided gravity heat.....some other older homes simply had grates open to the lower level, but the effect is the same - especially since their room directly below is heated (and of course, everyone knows...heat rises..!!)

The review appraiser said in his report, that I was grossly misleading in my report by counting that as living space (even though I had included seperate photos of the room and the stairway), said the above grade living area should be 500 sqft less, and knocked the value down $20,000....(with no specific market data justifying why $20,000 of course)

Please advise...!!

Although I see room for a difference of opinion in this regard, I believe I analyzed the room correctly, and again was hoping someone can help me out with either a better way to support my side through just plain knowledge or experience, or even better, can direct me to a guidline somewhere that I may use for documention for my position (I haven't been able to find any for EITHER position), or both..!

Sorry for the long explanation....hope it makes sense..!

Thanks for any helps you may be able to provide

Sincerely,

Dan Feia
WI & MN Certified Residential Appraiser

 

[Tim Hicks (Texas)]

Let me ask you this question. Would it have been just as simple to separate that area out and give it equal value in the market grid if it is truly equal? Wouldn't that remove any conjecture on the "misleading" part of the review? I don't know. I have not seen the appraisal, the property or the review. However, it has been my experience to just call areas what they are and avoid any misleading issue. Adjustment guidelines are just that, guidelines. I would rather see a report out of guidelines with truthful statements than a report with no adjustments or omitted adjustments to avoid the guideline issues.

 

[TC]

Obviously, you are wrong, since reviewers are always right. :new_smile-l:

Seriously, those type homes are common in my area. I would have included it in the GLA as you did. Even FHA will take homes that are heated that way.

I would stick to my :new_snipersmilie:


TC

 

[Dan Feia]

Thanks for the response, and point well taken, however, at the time of my doing the inspection and consequent report, I honestly believed, and still do, that there was nothing worthy of noting separately.... as far as the area being different.

As I mentioned, this type of set up (from my experience anyway, I'm not sure abiut the reviewers) is typical for the area.

I'm only faced with having to come up with a specific reason, and consider the area seperately because the reviewer thought it wasn't...I would in fact consider a living space the same way if faced with the situation again, at least based on my experience.

The MAIN problem I have is that I can't find anything anywhere that specifically addresses what types of heating or how, and if or when it makes an area a finished living space or not....the room meets ALL other standards with regards to finishing....

Again, thanks for your insight, anymore you can provide, I would certainly welcome...!!

 

[Dan Feia]

Nice Hat TC...!! Go Twinkies...!!

Thanks for the reply, at I now don't think I'm going totally nuts here...!!

Do happen to know of source where I can find some possible documentation to help back me up here...??

Dan

 

[Tony V]

Dan....Tell then TC said so..

Google these standards and you can quote directly from them..

ANSI standards

 

[Tina]

ANSI Z765-2003

Defines "Finished Area" as:

An enclosed area in a house that is suitable for year-around use, embodying walls, floors, and ceilings that are similar to the rest of the house.

Hopefully this helps!

TB

 

[Hal Mann]

Bring This Up

At the time of my doing the inspection and consequent report, I honestly believed, and still do, that there was nothing worthy of noting separately.... as far as the area being different.

As I mentioned, this type of set up from my experience is typical for the area.

Note in your rebuttal that this is common in your market and participants routinely consider these spaces as part of their finished living area.

 

[TC]

Dan....Tell then TC said so..

It should stand up in court...maybe.

Take the others advice, you might also want to talk to other appraisers in your area to see if this is common.

TC

 

[Dennis J. Black ASA IFAS]

Identification versus valuation

I made a post in the gerneral forum about a similar issue. I believe you could have "possibly" been more clear in your description, but concerning its contributory value I tend to agree with a minor cavaet, maybe a small downward adjustment is proper. However $20,000 seems steep when someone could install electric baseboard for a LOT LESS.

I had the same thing come up on the second ERC report I ever did in 1987. Beat my head against a wall and was overruled by the reviewer. Seems some people were not in class that day when they learned that heat rises.