Split level w/ rear walk out

[Delta85]

The appraisal seems to be all sorts of out of wack. The 3 comps all sold over 6-12 months ago, 1 of them short sale (we found 3 sales in the last month within a mile, don't get why old sales were used), our market listed as falling (+16% year over year with a shortage of available homes and no short sales within 2 miles), and came in 40 under what the state assessed it at just a few months ago, so I don't trust anything on the report as our state assessments are known to be very conservative and under market value by a significant amount.

Yes, that windowed room is a couple inches below grade on that upper side...but the original appraisal lists it as gross living area (new build), which is what confuses me. It's finished the same as the rest of the house, radiant heat, etc. I mean is it to the point of moving 3" of soil from that portion of the house would reclassify it as GLA if its supposed to be basement now?

Sounds like you want to hang your hat on the first appraisal not because it is the correct one but because it is the one that benefits you the most.

I Have not seen your report and do not know your area, but there may be reasons why the appraiser used his sales and not the ones you found. Did you pick them based on price, or are they actually more similar to your home than the ones the appraiser chose? Most homeowners tend to pick comparables based on price even if it means trying to fit a square peg into a round hole.

Finally, speaking just for my area, if a lower level area is even slightly below grade the entire portion is considered basement.

 

[HF Mudd]

I agree with you on everything but the last statement.

I cover Queens also, and I think a typical buyer would consider the first level, as shown in Redfin picture, to be living space and value it as such. Kind of like the brownstones in Brooklyn where the garden level is one or two steps down. Most buyers consider it and value it as living space.

Regardless of how the space is described, I agree with you that the market's reaction to that space and consistency in reporting is the key.

In Brooklyn, most Brownstones (and brick and limestone townhouses) have a "cellar" below the "garden" level. I was taught early in my career the best way to tell if there's a cellar from an exterior viewing was to look for the old coal chute.

Like I stated earlier, I don't think there's a wrong way to define the space as long as the consistency is there.

 

[sputnam]

If your description is accurate...a little below grade on the uphill side...then your first appraiser was wrong. Residential appraisals utilize Gross Living Area to describe the size of a dwelling. By convention, GLA is heated, finished, and above the ground. The rule is that if any part of the floor is below the level of the outside ground level, then the entire area is considered basement.

The thing to remember though, whatever the appraiser (or Realtor or builder or the county) calls it, it is still the same house. A good appraiser will deal with the valuation correctly.

 

[Ken B]

If your description is accurate...a little below grade on the uphill side...then your first appraiser was wrong. Residential appraisals utilize Gross Living Area to describe the size of a dwelling. By convention, GLA is heated, finished, and above the ground. The rule is that if any part of the floor is below the level of the outside ground level, then the entire area is considered basement.

The thing to remember though, whatever the appraiser (or Realtor or builder or the county) calls it, it is still the same house. A good appraiser will deal with the valuation correctly.

Even if the lower level wasn't below grade, by definition, it might still be correct to evaluate it as if below grade. I once appraised a split foyer that was constructed on a crawlspace and was entirely above grade, by definition. While I have absolutely no idea why it was built that way (I would have to assume soil conditions did not permit excavation of a basement on that particular lot), the house was a split-foyer. Period. For comparison with other split foyers, I considered the lower level as "below grade" area. My other option would have been to compare the property to other split-foyers, but have large adjustments for "GLA" and "below-grade" line items. That would have just been a dumb way of analyzing the comps. 50%-plus gross adjustments for a traditional split-foyer that might have been identical to the subject with exception of the crawlspace and technical definition of above-grade and below-grade areas? I don't think so.

 

[residentialguy]

I agree with you on everything but the last statement.

I cover Queens also, and I think a typical buyer would consider the first level, as shown in Redfin picture, to be living space and value it as such. Kind of like the brownstones in Brooklyn where the garden level is one or two steps down. Most buyers consider it and value it as living space.

Regardless of how the space is described, I agree with you that the market's reaction to that space and consistency in reporting is the key.

SP, yes, it's "living space". I don't think there's an argument about that. All finished basements are living space, but it's not above grade living space. It's below the main level and functions like every other finished walk-out basement.

 

[mavric1298]

Sounds like you want to hang your hat on the first appraisal not because it is the correct one but because it is the one that benefits you the most.

I Have not seen your report and do not know your area, but there may be reasons why the appraiser used his sales and not the ones you found. Did you pick them based on price, or are they actually more similar to your home than the ones the appraiser chose? Most homeowners tend to pick comparables based on price even if it means trying to fit a square peg into a round hole.

Finally, speaking just for my area, if a lower level area is even slightly below grade the entire portion is considered basement.

The comps don't seem to even resemble our place. We didn't even look at prices when finding the new comps, just had our realtor find what she thought were comps, sold in the last 6 months, within 1 mile. similar finishing, amenities (radiant heat, new construction, etc). We are right on a border street where everything half a block in one direction is 1 million plus, everything 1 block the opposite direction is $200ish. So simply by choosing to pic comps a mile one direction than the other would make a HUGE difference.

Does that tax assessment hold any weight as a comparison? I know they are assessed value not market value, but I've always heard in our area that they generally are 5-10% bellow market value.

Also he notes "comps 4-5 are active listings in order to represent the current market expectations for these types of properties and they are expected to sell well below listed price." MLS data for our area shows a 1 mile radius from us averaged a 103% sale to list ratio on 15 homes, so again, not sure where he is getting this "declining market" and using short sale numbers from.

 

[Delta85]

The comps don't seem to even resemble our place. We didn't even look at prices when finding the new comps, just had our realtor find what she thought were comps, sold in the last 6 months, within 1 mile. similar finishing, amenities (radiant heat, new construction, etc). We are right on a border street where everything half a block in one direction is 1 million plus, everything 1 block the opposite direction is $200ish. So simply by choosing to pic comps a mile one direction than the other would make a HUGE difference.

Does that tax assessment hold any weight as a comparison? I know they are assessed value not market value, but I've always heard in our area that they generally are 5-10% bellow market value.

Also he notes "comps 4-5 are active listings in order to represent the current market expectations for these types of properties and they are expected to sell well below listed price." MLS data for our area shows a 1 mile radius from us averaged a 103% sale to list ratio on 15 homes, so again, not sure where he is getting this "declining market" and using short sale numbers from.

Are your comps split level homes and did you use the above grade living areas only when comparing? Or did you at least choose raised ranch type homes with similar above grade finished area or one level ranch homes of similar above grade living area if no split or raised ranch homes were available? What style homes did the appraiser use and what were the living areas of these comparables?

I'm thinking you may still be looking at homes and combining finished basement and above grade areas when choosing comps. In that case you could choose a colonial style home of 2000 square feet above grade area to compare to a split with 1000 square feet above grade combined with a 1000 square foot finished basement and that would be incorrect.

All due respect to the realtor, but in my experience many realtors are clueless, or purposefully deceitful, when it comes to choosing comps. In my area many realtors combine above and below grade finished areas, especially with split and raised ranch homes, to create the illusion of a home twice as large as it really is. They list them this way on our MLS.

 

[sputnam]

SP, yes, it's "living space". I don't think there's an argument about that. All finished basements are living space, but it's not above grade living space. It's below the main level and functions like every other finished walk-out basement.

I said..."Gross Living Area"...not living space. Yeah, it's kind of nit picky, but there is a definable difference in the two.

 

[mavric1298]

I'm thinking you may still be looking at homes and combining finished basement and above grade areas when choosing comps. In that case you could choose a colonial style home of 2000 square feet above grade area to compare to a split with 1000 square feet above grade combined with a 1000 square foot finished basement and that would be incorrect.

All due respect to the realtor, but in my experience many realtors are clueless, or purposefully deceitful, when it comes to choosing comps. In my area many realtors combine above and below grade finished areas, especially with split and raised ranch homes, to create the illusion of a home twice as large as it really is. They list them this way on our MLS.

So after this post and bit more reading, I agree that the lower level might not be GLA, but am I right in my understanding that what matters most is how the market views the area? GLA or not, if other homes are selling with it at the same value at GLA, then it doesn't matter if its considered GLA or not.

We actually found the EXACT same setup, roughly equal in size for both GLA and below grade (modern, tri split level) new build. The price was not even close, we're talking 140 per sq ft vs 217. This house sold last month, is within .8 miles of us, and is nearly identical. Our MLS data shows market up something like 17% year over year, and appraisal shows declining at 6% a year. Every report I can find shows the exact opposite in Seattle currently, and strong buyers market.

I started another post with some new information and questions, so I will move the conversation there now that my GLA question is mostly answered. Thanks agian for the help, very informative

 

[Delta85]

So after this post and bit more reading, I agree that the lower level might not be GLA, but am I right in my understanding that what matters most is how the market views the area? GLA or not, if other homes are selling with it at the same value at GLA, then it doesn't matter if its considered GLA or not.

We actually found the EXACT same setup, roughly equal in size for both GLA and below grade (modern, tri split level) new build. The price was not even close, we're talking 140 per sq ft vs 217. This house sold last month, is within .8 miles of us, and is nearly identical. Our MLS data shows market up something like 17% year over year, and appraisal shows declining at 6% a year. Every report I can find shows the exact opposite in Seattle currently, and strong buyers market.

I started another post with some new information and questions, so I will move the conversation there now that my GLA question is mostly answered. Thanks agian for the help, very informative

If your market views above and below grade living areas the same you should be able to find similar homes with similar living area differences selling at a particular price. If you have found them you may be on to something, but make sure they are equally similar in all the other ways as well. It won't help if you find a similar style home of similar living area breakdown but that also has been renovated, is newer, has an in ground pool, etc.