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Raised Ranch GLA?

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KYLECODY

Senior Member
Joined
Apr 26, 2003
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Certified Residential Appraiser
State
Arizona
When theres a rr with the entire basement above grade is there a "correct" way to count GLA or does it depend on your market area????

I know in the near Denver mountains on a RR all finished square footage is included as GLA whereas in the City it seems that many waver back and forth on if they divide up the square footage as a finished basement or count it all on the GLA line, with different basement values and GLA values psf....Thx for any info.
 

Richard Carlsen

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Jan 15, 2002
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State
Michigan
The way I do it is that if any of the lower level is below grade, it is counted as basement and only the upper level is GLA,

UNLESS......

the floor plan requires the lower level for the house to be functional such as the raised ranch I did last fall where the kitchen, bath and dining were in the lower level and the bedrooms, living room and bath were in the upper. Not the greatest setup but without the lower level with the rooms therein, the house would not have been functional. I used all of the living in both levels as GLA.
 

Mike Garrett RAA

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Jan 14, 2002
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Certified Residential Appraiser
State
Colorado
If any is below grade....it is below grade....period.
 

Jo Ann Meyer Stratton

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Jan 16, 2002
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Certified Residential Appraiser
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Arizona
It depends!

Consider the information that you will be able to obtain regarding the comparables. If you have access to the amount of square footage of each level on each of your comparables, their degree in interior finish, construction quality and materials--then you can forge onward with above grade on one line of the sales comparison grid and below grade on the basement line of the grid. That way you are comparing apples to apples and oranges to oranges.

If you can not find the information regarding the comparables from any source and the only way to obtain that information is to go measure every comparable, walk through every comparable then you might have to lump all livable areas on one line. If that is necessary because the buyers of the comparables won't let you in the door, then provide extensive explanations in your report of what, why, who, where, etc, etc, etc that you did. And now you are comparing fruit salad to fruit salad since you don't have information on how many apples and how many oranges are in each of your comparable's fruit salad.

It sounds like your area in the city would provide you the detailed information to split between the GLA and the basement lines in the sales grid. But the out lying areas might fall into the "lumping" category.

When you are measuring the subject, very carefully measure everything. In your sketch very carefully detail everything, the amount of area on each level and note on the sketch what is above grade and what is below grade. On the front of the form and in the cost approach still keep everything separate so it is very clear how much is above and how much is below.

Its the sales comparison grid that gets tricky depending on what information you are able to obtain regarding the comparables. And remember, explain, explain, explain--and then explain some more!
 

Terrel L. Shields

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May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
JA said
And now you are comparing fruit salad to fruit salad since you don't have information on how many apples and how many oranges are in each of your comparable's fruit salad.

Exactamundo in my market. We just looked at a 990SF per level "Raised Ranch". About 25% of the lower floor is below the groundline. But you enter the house from the lower level, there is no access to the upper level unless you enter the house or go completely around back, up 4' of wood deck stairs onto the deck and enter a bedroom.

A bedroom, office, bath, living room, dining & Kitch is on the lower level. 2 beds, a bath and office upstairs.

That's equal a two story in my book. Has this simply been a walk out basement with 2 bedrooms downstairs and/or rec room, etc. I would view it different.

Also, finish is same. My SF adjust is same, even if I break it out.
 

Steve Owen

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Missouri
UNLESS......

the floor plan requires the lower level for the house to be functional

Interesting. I don't remember any exception like that in ANSI. In the class I took, they even used a graphic example of a split level with the back of one wall about two feet below grade and the rule was stated as "if any part of any level is below grade then that entire level is counted as basement." However, it does seem to make a certain kind of sense to consider whether the house would be functional. (I have usually broken the ANSI rule when it comes to "berm" or underground houses and counted the entire house as GLA. the logic I used there was that all the comps were similar.)

I just had one of these not too long ago where the kitchen was in the basement. I treated the below grade level as basement, but changed the way I adjusted on the finished rooms line since the subject basement was more expensive to construct and more valuable from a function stand point than any of the comps. Now, I'm wondering if I really did it right. I don't think it would have changed my value opinion to have counted it as GLA, though. The comps still would have been the same ones I used.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
Appraising rules would be a whole lot simpler to follow if we could just get people to build and remodel houses to our rules.

But unfortunately they don't so....we are faced with appraising to rules or appraising to reality.

The proverbial "Rock and a Hard Place".

But then, that's why they pay us the big bucks.
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
Consistency in the adjustments between the subject and the comparables is more important. If the you throw the basement finish into the AGLA for the subject do the same for the comparables, or visa versa. Then add comments to the report to explain what you did and why you did it. Worse on I had like this had a third level entry from the street and the rest of the house was down. It really was a split level with an attic entry, after I finally figured out what I was looking at I was able to find comps made sense and the adjustments came into line. But I had to write a book about why I threw out ANSI and industry standards.
 

Dee Dee

Elite Member
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Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Kyle,
Greetings from the mountains west of Denver....where typical buyers, listing agents, MLS and sometimes even the county records could care less about ANSI standards, at least when it comes to raised ranch construction. Raised ranches are far more common in this area than two-stories or ranches and their layout design is seen in more than half of the homes here.

I'm in agreement with JoAnn and Richard, with a few added suggestions.
If you're going to lump the GLA of both levels together, then be sure that the lower level is a finished walk-out (garage only walk-outs are less favored and require adjustments), total all bedrooms and baths, and be sure that all bedrooms have windows that pass code.

Don't make the error of equally comping a ranch-style home with a raised ranch. Ranch homes with ground level access to the main living areas (kitchen, living room and at least one bedroom and full bath) with walk-out basements generally sell for a higher price due to fewer stairs. Sometimes MLS doesn't discern the difference but the buyers certainly do.

Above all else, be consistant in your choice of comps and adjustments and EXPLAIN. FWIW, I've done at least a thousand appraisals on raised ranches in this area, and not once have they been questioned under review.
 

Pam Wyant

Senior Member
Joined
Feb 12, 2003
Professional Status
Certified Residential Appraiser
State
West Virginia
I agree with Mike & Steve - ANSI doesn't make an exception for a disfunctional floor plan created by part of the home being below grade. That needs to be addressed as functional depreciation in the cost approach and under utility in the sales comparison - if it has an effect. If you are in an area where such homes are common, it may not - at least similar comps should be available.

The one exception I have made, and it isn't really an exception, more of an explanation, is the berm homes. Like Steve I have counted them in the GLA, simply because it isn't acceptable to most lenders to have 0 SF 0 bedrooms, 0 baths. I do make certain to thoroughly discuss that although the entire subject is below grade, it has been considered as GLA in order to provide a meaningful comparison. Luckily I have been able to find at least one berm comp most of the time, and if necessary adjust the other comps with above grade GLA under quality of construction.

Pam
 
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