unusual basement

[Mike Garrett RAA]

it's a pain in the butt but you can do it (paired sales). Start with homes that have unfinished basements and compare them to those with no basements. Establish a good reference file. Once you have done that compare homes with unfinished basements to those with finished basements. After about 100 or 200 such pairs you will come up with a pretty good number to use in several different price ranges. OR

you can do what most appraisers do, guess at it. while cost information isn't to be used in the grid without market support, it too will provide a basis for establishing the upper limit.

As I said, in the median priced homes in my market, an unfinished basement has a market driven value of from $12 to $16 a square foot. Finish can be any where from $8 to $20 a square foot. Of course, in this market, basements are common and used as living area.

That's what they pay us the big bucks for....to be able to understand the market's reaction to all the items we normally adjust for in the grid. In my appraisal class I always use a range of values and suggest to the students that they need to develop their own set of adjustments.

 

[Debra]

Hello!

Thanks for all the imput. There are very few homes with basements in our area. I finally saw this basement for myself and it is finished except that it has stud walls and concrete floors at present. It is planned to be completed within 2 months. The storm shelter in the basement is finished and it has the electrical and plumbing completed with enough for a bathroom, laundry room and kitchen. The basement is about 2000 square feet and the above grade levels are worth about $100 a square foot. This home has many extra features. There is wiring for security cameras in every room in the home, the master bathroom floor is heated and when you step out from bathing there is a heater from the ceiling to dry you off. It has extra insulation throughout, 2 emergency lighting units, whole house audio and intercom system and vac. The main kitchen includes 2 of everything(it was made for two cooks). I could go on and on about more special features...that's why I was looking for an easy percentage! I have the report almost completed though. Thank God! :roll: Debra

 

[liznindy]

Debra,

You might try figuring out the Cost for the basement and finish and with depreciation this would be likely at the high end for value contribution. If you have few basements in your area, your question will be...what will the market pay for finished area below grade.

Another thing to consider, if the basement has exterior access with any exposure at the rear, daylight windows, doors, etc., the market will likely pay more for this square footage.

Isn't this business great?!! No absolute answers but good suggestions all.

 

[Debra]

Hello again!

Now the UW and lender want me to get 2 more comparables with basements no matter how far I need to go and the sales can be over a year old. I emailed this appraisal in last week. I was told at the very beginning of this appraisal order that I needed to stay within 15 miles to get comparables and sales within less than a year. There were no comaparables within those ranges with basements. We have very few basements here and even less homes this size and in this value range. How much am I required to keep on working on this/how much should I do/how much more time? I've already spent probably at least 3X the time a "normal appraisal" would have taken. Any comments will be appreciated. Thanks. :evil: :? :x :roll:

 

[Ted Martin]

Find them a comp, but disclose that it wasn't used to determine the value of the subject and was provided as additional information only at the clients requrest.

It's a POPEYE Appraisal, "It is what it is". It's not your fault there aren't any sales that meet the underwriters dreams.

 

[Debra]

Thanks...that's what I'll do :roll:

 

[Susan Priore]

Debra~

I learned a long time ago in this business that you should not scratch a notch on the chalkboard for every hour that you spend on difficult appraisals. If you do, it'll drive you bizerk! :?

Look on the positive side...In the past week you probably did at least a few appraisals where you averaged a good sum of money: Time Spent/$ Paid. But, with this deal you could probably make more per hour at Burger King! :lol:

In the end, it all works out! Not to mention, if you spend the time and do a good job on the report the client will recognize this and reward you with additional work in the future!

The UW looks at several appraisals in a day and I'm certain that he/she realizes that basements are not common in this market (either from being local or through reading your comments in the report) and he/she is aware of the difficulties you're facing...

Unfortunately for the UW, he/she has guidelines to follow also! I'm sure the UW will also be just as happy as you are when the loan is closed!

HANG IN THERE!

 

[Pamela Crowley (Florida)]

Debra,

I charge up to $100 each for additional comps when requested/required after I've delivered the report. Not always, just most often... especially when what they now want is not what they wanted first.

I've already spent probably at least 3X the time a "normal appraisal" would have taken.

and

Look on the positive side...In the past week you probably did at least a few appraisals where you averaged a good sum of money: Time Spent/$ Paid. But, with this deal you could probably make more per hour at Burger King!

In the end, it all works out! Not to mention, if you spend the time and do a good job on the report the client will recognize this and reward you with additional work in the future!

I don't know about the rest of you here but, I very rarely get any order that could even come close to being called a 'cookie cutter'. Yes, those used to make up for the wild unique ones. For the last year+, over 75% of my orders are the unique properties and the extra time they take should make them 2X, 3X, up to 5X higher than the typical fee. Under this scenario, I'm slowly making less and less and looking for other avenues to make money with my expertise. Just what is happening to me. This is partly why I come really unglued on those that ask for me to look up the comps and call them if it can't make it. Let them pay for an AVM first from someone who is not an appraiser!!!

 

[Debra]

Hello again.

In the past week no it's been bad. My inlaw died last week and we got back Monday night from the funeral in another state. I had new appraisal orders from clients that I haven't had complaints from in the past and this problem appraisal. The lender is calling me day and night at my business and home phones and email. I chose to get the new ones out first before redoing the old one. Was this a mistake or not? I need to eat.

Also, besides 2 more comps with basements on the problem appraisal...I called the other night and my lender/client was gone so the man who answered the phone gave me a 30 something minute speech on how good the appraisal is but that I should change the appraisal from suburban or the deal wouldn't go through and that this should have been understood at the beginning or a different appraiser should have gotton the job. The boss showed it to their "favorite appraiser" who is 3 hours from me in a city 10X mine and he "can get about anything done". He didn't like that I used red brick homes when the subject is white brick. There were no red brick comparables within the 15 miles.

I understand that who ordered the appraisal has only been doing it for a year and this will be his biggest deal ever BUT I HAVE A LIFE AND OTHER CLIENTS AND... :evil: In one of his many messages that he left yesterday after I had already talked to him AGAIN he said that "he realized that the changes will make the value less" (which I never said-but anyway). Comments please? Thanks.

 

[Pamela Crowley (Florida)]

Debra,

I sympathize with what you're going through. Tell them it's now $150 for each additional comp and you'll do them as soon as you get paid. Basically, tell 'em to go to **ll. If this property does not 'fit' the guidelines of the wholesaler they are trying to use, it's NOT YOUR FAULT.