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This Close " " (GLA Question)

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David Beasley

Senior Member
Joined
Dec 12, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
So I've come across a unique situation, one that I've honestly never seen in my 25 years in the appraisal business here: I'm working on a 1950s era McMansion, on an old-money golf course (that is still doing well oddly enough). This property's tax card indicates it is a 2-story home via 1st and 2nd floor GLA figures being presented. This home has apparently been counted as a 2-story since it's construction by every Realtor and tax assessor that has measured it. Now for the crux: The entirety of the 2nd floor has only 6.90' ceiling clearance. Not 7' in a single place (I measured in at least 8 places throughout the 3 rooms). Of course, ANSIZ765-2003 says 7' minimum (with caveats for slopes, etc) - but these aren't sloped at all. They're just plainly under 7' throughout.

How would you guys treat this? Be the first person in 65 years to call it out as substandard clearance, or let it go and hope your E&O will cover you when it goes into foreclosure in 18 months and someone calls YOU out on it?
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
"The low ceiling clearance in the upper level gives a mild claustrophobic effect. The location on the golf course is unique and is a positive property feature. The most likely buyer would not be daunted by the low ceiling."
 

Obsolescent

Senior Member
Joined
Jul 6, 2004
Professional Status
Certified Residential Appraiser
State
Minnesota
How would the market perceive the low clearance of the 2nd floor? Was it considered an attic when it was built that was later finished (and subsequently called a 2 story?) Perhaps some functional obsolescence is in order for the 3" difference in what is typical in the market. Is the 2nd story finish of equal quality to the main living area? Historically, did this home sell in line with others at the time it was sold? Might have to go back some to determine how it fell in with other homes at the time of prior sales.
 

Peter LeQuire

Elite Member
Joined
Jan 3, 2005
Professional Status
Retired Appraiser
State
Tennessee
1/10 of an foot? Mention it and go on. Does NC mandate ANSI as the standard for residential appraisals? If so, it might be prudent to break it out from GLA treat it as other area, but treat it the way the market does and has done. If ANSI isn't required, don't mention it (ANSI) and report that you've measured the property to a level of accuracy consistent with the methods used by other market participants and that the "market" has, in the past, treated it as living area despite its ceiling height.
(Edited to correct measurement.)
 
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David Beasley

Senior Member
Joined
Dec 12, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
How would the market perceive the low clearance of the 2nd floor? Was it considered an attic when it was built that was later finished (and subsequently called a 2 story?) Perhaps some functional obsolescence is in order for the 3" difference in what is typical in the market. Is the 2nd story finish of equal quality to the main living area? Historically, did this home sell in line with others at the time it was sold? Might have to go back some to determine how it fell in with other homes at the time of prior sales.

Yeah, those are the questions I am asking myself, with no good answers. It has been blindly accepted as a 2 story for its entire life as best I can tell. But at over 6' tall, I tend to immediately hone in on low ceilings. Most are never this close to 7' (usually closer to 6') and aren't a hard call to make. But this one is, simply because the tax office thinks it's proper 2 story, as does the agent (which I don't personally care about, but legally speaking, that is another real estate professional's opinion), as do the seller and presumably the buyer. BUT, I had the "feeling" when I almost felt like I needed to hunch over to walk around up there, then took all the measurements, which ranged form 6.90-6.92 throughout. It was originally finished with the home, as "GLA" as best as the tax records indicate so it was never attic space (which would make it another easy call to make).

My primary issue is that ANSI Z765-2003 makes no provisions for grandfathering old properties where such a height requirement likely didn't exist...Thanks for the reply.
 

gregb

Elite Member
Joined
Sep 3, 2011
Professional Status
Certified General Appraiser
State
California
Easier to reach the cobwebs. Turn on the heat, the .10 will disappear. :)
 

David Beasley

Senior Member
Joined
Dec 12, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
1/10 of an inch? Mention it and go on. Does NC mandate ANSI as the standard for residential appraisals? If so, it might be prudent to break it out from GLA treat it as other area, but to treat it the way the market does and has done. If ANSI isn't required, don't mention it (ANSI) and report that you've measured the property to a level of accuracy consistent with the methods used by other market participants and that the "market" has, in the past, treated it as living area despite its ceiling height.

Actually, that's 1/10 of a foot (more than 1") and it is easily measurable and verifiable by anyone with a decent laser - including the buyer (who is the most likely to sue in a purchase case). And yes, NC makes us define what GLA method we use, and the NAHB and ANSI methods both say 7' minimum AFAIK - and those are our only 2 GLA definition options here.
 

Obsolescent

Senior Member
Joined
Jul 6, 2004
Professional Status
Certified Residential Appraiser
State
Minnesota
Yeah, those are the questions I am asking myself, with no good answers. It has been blindly accepted as a 2 story for its entire life as best I can tell. But at over 6' tall, I tend to immediately hone in on low ceilings. Most are never this close to 7' (usually closer to 6') and aren't a hard call to make. But this one is, simply because the tax office thinks it's proper 2 story, as does the agent (which I don't personally care about, but legally speaking, that is another real estate professional's opinion), as do the seller and presumably the buyer. BUT, I had the "feeling" when I almost felt like I needed to hunch over to walk around up there, then took all the measurements, which ranged form 6.90-6.92 throughout. It was originally finished with the home, as "GLA" as best as the tax records indicate so it was never attic space (which would make it another easy call to make).

My primary issue is that ANSI Z765-2003 makes no provisions for grandfathering old properties where such a height requirement likely didn't exist...Thanks for the reply.

Well I wouldn't put much weight in what the assessor says it is either. They may use their own methods and who knows when the last time an assessor was in it to make an exact determination. If they measured from the outside then they don't know what they don't know.

If it were me, I'd call it out and decide to make a functional adjustment or explain why its not warranted. I can understand where it can have an impact on people who are over 6" tall. I'm only 5'5 and don't like feeling closed in. So it may have a reduced buyer pool. Although most older homes have some sort of functional issues that buyers are willing to overlook in exchange for the charm (if there is any) of an older home. Just bantering out loud with you here to help sort out a possible solution....
 

Peter LeQuire

Elite Member
Joined
Jan 3, 2005
Professional Status
Retired Appraiser
State
Tennessee
Actually, that's 1/10 of a foot (more than 1") and it is easily measurable and verifiable by anyone with a decent laser - including the buyer (who is the most likely to sue in a purchase case). And yes, NC makes us define what GLA method we use, and the NAHB and ANSI methods both say 7' minimum AFAIK - and those are our only 2 GLA definition options here.

I can't suggest what one has to do to stay clear of the NC REA board. If the TREAC required ANSI (or any other standard that mandates that GLA must have 7' ceiling height), I would consider treating the upper level as a separate line item, adjusting it at the same rate as the main level. It would produce total adjustments that are very large, but would be treating the areas as seems to be required, and as the "market" appears to have been doing in the past. (Too bad that silly market refused to comply with ANSI.) Doing so would satisfy ANSI, and would clearly put buyer on notice about the ceiling height/non-ANSI compliance. I can imagine you'd have to write a fairly detailed explanation of what you're doing and why to placate a mortgage underwriter.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
That's a tough one...at the end of the day, USPAP does not say we have to use ANSI. ANSI is widely recognized source, however, so peer practice many rely on it, as do builders etc for guidelines.

My take on this, is it is close enough to ANSI guidelines, only 3 inches away, that since it is an older home could be functional and "grandfathered" in by market acceptance and tax assessor etc, all these years into being close enough to comply within accepted ANSI standards. I'd explain that the house is aged and the lower ceiling is consistent with era house built, that it might lower appeal to some buyers etc but it is a functional 2nd floor living area GLA.
 
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