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The Correct Way To Measure Below Grade Finish?

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CGinMN

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May 20, 2011
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Certified General Appraiser
State
Minnesota
Interested in hearing how others measure below grade finish. Is it like above-grade finish, where the outside walls (in this case the foundation walls) are included in the finished area, or are you measuring from the interior of the walls/foundation. I use the former, but I think agents in my market often use the latter, in which case the subject typically has a higher percentage of finished area below grade are compared to the comps because I have included foundation walls.

Thoughts?

Edit: For clarification, I also exclude the portion of the foundation wall in unfinished areas, like utility rooms, storage rooms, etc.
 

Terrel L. Shields

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May 2, 2002
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Certified General Appraiser
State
Arkansas
If I have the exterior of a house then usually that's the dimensions I use for lower level. Today's project is split-level. The county called it 1 story w basement but It's on a slope. I think of it as more than finished basement.
 

Mike Garrett RAA

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Jan 14, 2002
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Certified Residential Appraiser
State
Colorado
What do your peers do? What is of public record and how is that determined?
 

CGinMN

Junior Member
Gold Supporting Member
Joined
May 20, 2011
Professional Status
Certified General Appraiser
State
Minnesota
What do your peers do? What is of public record and how is that determined?

I'm asking here to see what my peers are doing. Public records are usually spotty and I find them to be more untrustworthy than what agents report.
 

Vermonter

Senior Member
Joined
Mar 21, 2007
Professional Status
Certified Residential Appraiser
State
Vermont
Usually my basement sq ft matches the 1st floor, so that would include the foundation walls. Then measure the smaller of the either finished or unfinished space and subtract from the total. I include the exterior walls in the measurements and everything is rounded to the nearest foot, which is consistent with assessment records and what my peers do.
 

EddieB

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Feb 17, 2005
Professional Status
Certified Residential Appraiser
State
North Carolina
I use your measuring method. I don't believe ANSI discusses below grade but you should check.
 

ucbruin

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Mar 11, 2014
Professional Status
Certified Residential Appraiser
State
Massachusetts
Usually my basement sq ft matches the 1st floor, so that would include the foundation walls. Then measure the smaller of the either finished or unfinished space and subtract from the total. I include the exterior walls in the measurements and everything is rounded to the nearest foot, which is consistent with assessment records and what my peers do.

:clapping::clapping::clapping:

No offense....
On this issue, I've taken the liberty to consider myself your peer!!!!! :)
 

Ariba

Senior Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Colorado
Interested in hearing how others measure below grade finish. Is it like above-grade finish, where the outside walls (in this case the foundation walls) are included in the finished area, or are you measuring from the interior of the walls/foundation. I use the former, but I think agents in my market often use the latter, in which case the subject typically has a higher percentage of finished area below grade are compared to the comps because I have included foundation walls.

Thoughts?

Edit: For clarification, I also exclude the portion of the foundation wall in unfinished areas, like utility rooms, storage rooms, etc.

Why would you use mix methods? What method do you use for second level and/or attic's?
 

Peter LeQuire

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Joined
Jan 3, 2005
Professional Status
Retired Appraiser
State
Tennessee
Basement area is not always the same as that of the main level: some basements include the area(s) under porches, particularly poured slab entry porches; they often don't include areas of bays, which in many non-masonry or stone veneer houses, are cantilevered away from the foundation. There must be others, but I have to go to the courthouse and dew some diligence.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
This is Fannie's biggest faux pas.

The (stupid) rule is: If any portion is below the grade the entire level is to be described as below grade. No one else on Earth thinks this way.

So it shouldn't matter from a valuation issue, just follow the market. But describing it and dong the appraisal report gymnastics can be a pain.

Fannie Mae did try to clarify the issues but I think few residential appraisers have ever read anything from the selling guide.

https://www.fanniemae.com/content/guide/selling/b4/1.3/05.html

"Only finished above-grade areas can be used in calculating and reporting of above-grade room count and square footage for the gross living area. Fannie Mae considers a level to be below-grade if any portion of it is below-grade, regardless of the quality of its finish or the window area of any room. Therefore, a walk-out basement with finished rooms would not be included in the above-grade room count. Rooms that are not included in the above-grade room count may add substantially to the value of a property, particularly when the quality of the finish is high. For that reason, the appraiser should report the basement or other partially below-grade areas separately and make appropriate adjustments for them on the Basement & Finished Rooms Below-Grade line in the Sales Comparison Approach adjustment grid.

For consistency in the sales comparison analysis, the appraiser should compare above-grade areas to above-grade areas and below-grade areas to below-grade areas. The appraiser may need to deviate from this approach if the style of the subject property or any of the comparables does not lend itself to such comparisons. For example, a property built into the side of a hill where the lower level is significantly out of ground, the interior finish is equal throughout the house, and the flow and function of the layout is accepted by the local market, may require the gross living area to include both levels. However, in such instances, the appraiser must be consistent throughout the appraisal in his or her analysis and explain the reason for the deviation, clearly describing the comparisons that were made."
 
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