Split levels, UAD/CU & Below Grade Living Areas

[KenAZ]

There are plenty of sales in your (our) market that you can compare apples with apples.

Yes, but they are not all the same exact model, so there is no way of determing the "Basement" size of comparables. I can find split level comparables and a few basement comparables. I know the size of my basement, but can only guess the size of the comparable basements. If I just include the basement level in the GLA, I have a very supportable appraisal. If I guess the basement and GLA, as FNMA, FHA and VA want me to do, how is that more supportable?

 

[residentialguy]

3 level splits are going to be similar in proportion to others...usually about 60% of the foundation size. If it's weird, you'd see it in the photo. The bit that you're off won't be significant enough for a market reaction.

 

[ucbruin]

3 level splits are going to be similar in proportion to others...usually about 60% of the foundation size. If it's weird, you'd see it in the photo. The bit that you're off won't be significant enough for a market reaction.

"The bit that you're off won't be significant enough for a market reaction"

And this would be based on "paired sales" or The Book? .)

 

[Pam Wyant]

We used to be able to treat these as all GLA. Was a lot easier, because that is the way buyers see them. There is no reason this has to be so complicated, except FNMA forms told us so. We used to be able to get exceptions in the SouthWest, but since everything has to be in a Box now, we have to do it the same as those in other parts of the country. Splits are almost impossible to appraise this way, because no one knows the actual "Basement" sf on comps. MLS and county count everything as GLA. FNMA, FHA and VA have one solution to this, they all told me to my face (At the Valuation Expo) to "Guess" the sf of the basement on split level and basements on the comps.

So guessing is more reliable than just including the lower level in GLA.

I am so happy that in a few years I will be retiring.

P.S. I have talked to a local FNMA reviewer about this and he said that you can include finished basements and the lower level of a split level in the GLA on your appraisal, as long as the subject and comps are counted consistent. The only problem is that FNMA will not admit this, and AMC and lenders do not know this.

I haven't treated the below grade area of splits as above grade GLA in the 20 years I've been working in the profession. I have a few times considered a raised ranch/mid-entry that is totally above grade as the lower level being "basement", because that is the way it functions. Believe me, if you have an older population, there is a difference in the market when the main living area requires climbing steps. With due explanation in the report, of course.

 

[G-man]

The house in the photo...the house has a basement. What's the problem?!?

No, it does not have a basement. It has a lower level below the 2nd floor. That is not a basement. Buyers in N.W. Ohio do not treat it as a basement. Realtors in N.W. Ohio do not treat it as a basement, nor do the auditors/assessors in this area. They all include that lower level in the overall GLA of the home. A basement, if this property had one, (which is doesn't) would be below the ground floor level, which is next to the attached garage. I am not unaware of how to appraise this type of property, nor I am confused as to how adequately describe the home. I can easily separate out that lower level, and even place it in the "Finished areas rooms below grade" section of the URAR. My problem is that Fannie Mae is forcing me to describe this lower level as a finished basement, when it is not. I have to write a long explanation as to why I'm separating this lower level out, then another as two why I'm making no adjustments for "basements" for comparable properties on a crawl space/slab. Prior to UAD, I could easily describe this home, place the GLA where it belongs, and all would be well. But I can't, and it's very frustrating.

 

[Michigan CG]

Yes, but they are not all the same exact model, so there is no way of determing the "Basement" size of comparables. I can find split level comparables and a few basement comparables. I know the size of my basement, but can only guess the size of the comparable basements. If I just include the basement level in the GLA, I have a very supportable appraisal. If I guess the basement and GLA, as FNMA, FHA and VA want me to do, how is that more supportable?

Assessor records here have sketches and it is very easy to determine the GLA vs GBA of a split level home.

 

[Michigan CG]

No, it does not have a basement. It has a lower level below the 2nd floor. That is not a basement. Buyers in N.W. Ohio do not treat it as a basement. ..............

Yes, it does have a basement. If you do or don't use ANSI, it is still a basement. I strongly suggest you use ANSi as your guide so that if you ever get involved in any litigation you will always know the standard you have used.

Buyers in NW Ohio and the remainder of the midwest don't treat it like a TRADITIONAL basement but they also don't treat it like TRADITIONAL GLA.

Compare GBA and GLA with different property types including split level homes and you will see that I am correct.

 

[Pam Wyant]

G-man, your real problem is you don't want to call a basement a basement. Sort of reminds me of the homeowner's who state "it used to be a mobile home but it isn't anymore"

 

[residentialguy]

No, it does not have a basement. It has a lower level below the 2nd floor. That is not a basement. Buyers in N.W. Ohio do not treat it as a basement.

I'll bet that it's like any other basement. Family room, utility room...maybe an extra bath and/or bed. Public will always think that a basement is gross living area because it's finished and you can live down there just as easy as upstairs. GLA helps determine a type of measure so that you compare like properties. Being basement doesn't mean it's anything less. Basement could be set up so that it's worth more than GLA.

 

[residentialguy]

"The bit that you're off won't be significant enough for a market reaction"

And this would be based on "paired sales" or The Book? .)

Based upon I'm a freakin smart guy . That the lower level of that kind of split is limited. What's it cost to finish a family rm and bath...10k? So the family room is 10% smaller...you think that's going to be a significant variance???