Split Foyer Lower Level Question

[susan weis]

So this is what I want to put in my report "PER HUD: When any part of a finished level is below grade, the Appraiser must report all of that level as below-grade finished area, and report that space on a different line in the appraisal report, unless the market considers it to be Partially Below-Grade Habitable Space.In the case of non-standard Properties and floor plans, the Appraiser must observe, analyze, and report the market expectations and reactions to the unique Property." Followed by : "In this marketplace, this lower level is routinely expected to be equal in utility, finish, and value. As a result, the space IS included in GLA and marketability is NOT considered to be adversely affected."

I have a mix of housestyles due to lack of sales of split levels. Breaking the lower level out is atypical for me in this case and the market. Would this comment fly with FHA nowadays?

 

[Terrel L. Shields]

Hopefully...

 

[Mr Rex]

Do you have historic market support that the split level design does not negatively affect value? A lack of current comparable split levels does not automatically mean there is no market reaction.

 

[susan weis]

Decided to go with this:
"Partially Below-Grade Habitable Space refers to living area constructed partially below grade, but has the full utility of GLA. The Appraiser must report the design and measurements of the subject, the market acceptance or preference, how the levels and areas of the dwelling are being calculated and compared, and the effect that this has on the analysis. Regardless of the description of the rooms, bedrooms or baths as above grade or below grade, the Appraiser must analyze all components of the subject Property in the valuation process."
****In this marketplace, this lower level is routinely expected to be equal in utility, finish, and value. As a result, the space IS included in GLA and marketability is NOT considered to be adversely affected. *****************************

 

[Joe Flacco]

Split foyer lower level is basement. It is the same thing as a rambler or bi level. The only difference is where the front door is.

 

[Dublin ohio]

Although your commentary might be correct. I would take what Mr Rex said to heart. The kind of approach your are using was an old trick back in the days to "hit the target". Including the below grade are of a split or bi-level in GLA then using a ranch or 2 story with a basement as a comparable. Make minimal adjustments for basement and voila. The target was hit. Not saying that is what you are doing but it could send up a red flag. I would be more inclined to compare it to a ranch with a finished basement. Very similar function. If you have a true split foyer (what is called a bi- level in my market). It functions more similar to a ranch with a finished basement as you still have to traverse the same number of steps to get from the upper to lower level. But I think I would go back in time and try to find a similar sale. Market condition adjustment would be easier to support. Just my 2 cents

 

[Tom D]

i found it helpful to go 5 miles to find at least 1 similar split. that's what the secondary 4,5,6 comps are for. besides that, i would use capes & bi levels as being functional similar. what would the typical buyer consider these spaces to be. that's something an avm might not be good at.

 

[residentialguy]

If it acts like a basement, it's a basement. If it's below the kitchen level, it's probably a basement and not GLA. Doesn't mean it's worth less...it's just keeping your comps consistent with same size houses. 2 story homes would be poor comps. Try to keep to similar functioning homes, ie split level homes with finished basements, ranches with finished basement, split-entry/foyer homes with finished basements.

 

[GA Benny]

"As a result, the space IS included in GLA and marketability is NOT considered to be adversely affected."

In a perfect world, I would agree that splits or ranches with basements would be ideal, even if a little further away or over six months. However, we rarely find ourselves in a perfect world. With a statement like this and no comps that bracket functionality, I would advise including additional justification to your claim. You may want to at least provide a short paragraph that details the analysis you conducted to justify no adjustments for functional utility. For example, you could go back to the last time a split foyer like the subject, or even the subject itself, last sold and compare it to the market at that time period. It would be reasonable to assume that if the market was paying less for a split foyer design 5 years ago, they would likely react similarly today. Trying to prove no adjustment is just as hard as trying to prove how much of an adjustment. Be sure to keep all of the sales from your analysis in your workfile, just in case this gets questioned later.

 

[residentialguy]

****In this marketplace, this lower level is routinely expected to be equal in utility, finish, and value. As a result, the space IS included in GLA and marketability is NOT considered to be adversely affected. *****************************

@susan weis
I don't understand why you are doing this. What are your comps? Do they have no basement? Again, calling a finished basement a finished basement doesn't diminish the value...in fact you could give the basement more value then your GLA if it is supported by the market. But if you're trying to make it equal to the GLA of a 2 story home with an unfinished basement or a ranch or split with double foundation size, then you have a problem.