• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Urgent, HELP: VA loan, GLA on detached finished space

Status
Not open for further replies.

trinity

Freshman Member
Joined
Jun 27, 2008
Professional Status
General Public
State
California
Hi,
New to the forum and in quite a bind. I've searched this forum but could not find an answer to my situation.
I hope someone can help really, really soon. Meeting the buyers of my home at noon June 27 and need more information. Please feel free to contribute your thoughts even after the meeting. Here are the facts.

1. Home is in Fresno, CA.
2. Loan is VA.
3. Home has been in escrow for 27 days on a 30 day escrow.
4. Unofficial appraisal report did not come out till 25 days into escrow. Lender stopped official report because appraisal amount was 20% below sales price.
5. Appraisal states that detached finished building cannot be included in GLA.
Finished building has:
- Own A/C unit and a gas fire place.
- A separate room and closet.
- About 500 sq ft in size.
- Ceiling is 8 feet tall.
- Finished wood paneling walls and marble chip flooring.
- Was built with permits, in tax records and I have been paying taxes on it.
- Was included as GLA in previous appraisal report in 2002.
- Does not have finished hallway leading to it from main house. Main house is about 7 1/2 feet away.

Main house is aprox. 1200 sq ft. So you see my problem. My home is valued(according to this appraisal report) about $40,000 less because of this.

My questions are:
1. Can I use as an argument the fact that the detached building was included in the GLA in the appraisal when the house was purchased, it's in the tax records and I have been paying 6 years of taxes on it, it has building permits and my lender approved it at the time of sale?
2. Can I build a finished hallway connecting the main house to the detached building so that the detached building can be included in the GLS?
3. If so, what constitutes as finished hallway? Or, what is the definition of a covered hallway by VA appraisal standards?
4. What should I pay attention to (do's and don'ts) when building this hallway?
5. Any other solution besides building a finished hallway connecting the two buildings?

I thank you all in advance for your awesome help. You don't know what your help means to a desperate person like I.
Thanks again.

Teri
 

realbiz

Junior Member
Joined
Mar 14, 2008
Professional Status
Certified General Appraiser
State
California
Hi,
New to the forum and in quite a bind. I've searched this forum but could not find an answer to my situation.
I hope someone can help really, really soon. Meeting the buyers of my home at noon June 27 and need more information. Please feel free to contribute your thoughts even after the meeting. Here are the facts.

1. Home is in Fresno, CA.
2. Loan is VA.
3. Home has been in escrow for 27 days on a 30 day escrow.

4. Unofficial appraisal report did not come out till 25 days into escrow. Lender stopped official report because appraisal amount was 20% below sales price.
Never heard of this, as the report when finished is downloaded to the VA system when completed. The lender can only read the report, they have no control over a VA appraisal.

5. Appraisal states that detached finished building cannot be included in GLA.
Seems correct based on this information

Finished building has:
- Own A/C unit and a gas fire place.
- A separate room and closet.
- About 500 sq ft in size.
- Ceiling is 8 feet tall.
- Finished wood paneling walls and marble chip flooring.
- Was built with permits, in tax records and I have been paying taxes on it.
Building included in the GLA ,or a permitted separate structure is subject to property taxes.

- Was included as GLA in previous appraisal report in 2002.
Based on this information, the detached room should not have been included in GLA.

- Does not have finished hallway leading to it from main house. Main house is about 7 1/2 feet away.

Main house is aprox. 1200 sq ft. So you see my problem. My home is valued(according to this appraisal report) about $40,000 less because of this.

My questions are:
1. Can I use as an argument the fact that the detached building was included in the GLA in the appraisal when the house was purchased, it's in the tax records and I have been paying 6 years of taxes on it, it has building permits and my lender approved it at the time of sale?

No, seperate (detached) structure is not included in GLA.

2. Can I build a finished hallway connecting the main house to the detached building so that the detached building can be included in the GLS?

For this question you need to contact the city planning/building department to see if they will approve. You will most likely need some plans drawn for them to approve. Will it be appealing to the buyer? Will it be worth the cost?

3. If so, what constitutes as finished hallway? Or, what is the definition of a covered hallway by VA appraisal standards?

If you don't know this, I suggest you contact a local contractor.

4. What should I pay attention to (do's and don'ts) when building this hallway?

Whatever the city will require, as most will inspect during construction.

5. Any other solution besides building a finished hallway connecting the two buildings?

This is not an easy fix based on what I have read, even a finished hallway may have a negative effect on the design of the house. The way I picture this is a bridge going from the mainland (main house) to an island (detached room).

I thank you all in advance for your awesome help. You don't know what your help means to a desperate person like I.
Thanks again.

Teri

I hope this helps a little, and good luck with your sale. This does not sound like a quick inexpensive fix.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Living area that is detached from the main house is not a part of Gross Living Area, but that does not indicate that this detached area does not contribute to value.

There are many unknowns that can't be answered from where I'm sitting, but I wish you good luck.
 

CURT VAN HOOSER

Senior Member
Joined
Nov 3, 2003
Professional Status
Licensed Appraiser
State
California
Per ANSI Z765, the detached room does not qualify for inclusion in the gross living area of your home. However, it does have value and should have been valued on a seperate line in the sales comparison grid on the appraisal report. Assuming that was done, you may just be out of luck. Sorry! Maybe you should have your realtor look for some comparable properties (around 1200 sqft with a detached room) so you can get a sense of what's happening in your market.
 

Michigan CG

Moderator
Staff member
Moderator
Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
Hi,
New to the forum and in quite a bind. I've searched this forum but could not find an answer to my situation.
I hope someone can help really, really soon. Meeting the buyers of my home at noon June 27 and need more information. Please feel free to contribute your thoughts even after the meeting. Here are the facts.

1. Home is in Fresno, CA.
2. Loan is VA. It is generally accepted that VA appraisers are more experienced because of the requirements to be a VA appraiser.
3. Home has been in escrow for 27 days on a 30 day escrow.
4. Unofficial appraisal report did not come out till 25 days into escrow. Lender stopped official report because appraisal amount was 20% below sales price. Unofficial report according to who? There is no such thing as an unofficial appraisal.
5. Appraisal states that detached finished building cannot be included in GLA.
Finished building has:
- Own A/C unit and a gas fire place.
- A separate room and closet.
- About 500 sq ft in size.
- Ceiling is 8 feet tall.
- Finished wood paneling walls and marble chip flooring.
- Was built with permits, in tax records and I have been paying taxes on it.
- Was included as GLA in previous appraisal report in 2002. It should not have been included in that appraisal. It is not attached to the main dwelling and therefore not GLA. The space has value, but how much is the question.
- Does not have finished hallway leading to it from main house. Main house is about 7 1/2 feet away.

Main house is aprox. 1200 sq ft. So you see my problem. My home is valued(according to this appraisal report) about $40,000 less because of this. Have you seen the appraisal? If so, does it look credible? Have you talked to your Realtor about this? If so, what does he/she say?

My questions are:
1. Can I use as an argument the fact that the detached building was included in the GLA in the appraisal when the house was purchased, it's in the tax records and I have been paying 6 years of taxes on it, it has building permits and my lender approved it at the time of sale? You cannot argue that the detached building was included in the previous appraisal. that was wrong, very wrong, and should not have been done.
2. Can I build a finished hallway connecting the main house to the detached building so that the detached building can be included in the GLS? You could, and in my markets it would be included.
3. If so, what constitutes as finished hallway? Or, what is the definition of a covered hallway by VA appraisal standards? Typically, in my markets it needs to be of the same quality as the main house GLA and must be heated.
4. What should I pay attention to (do's and don'ts) when building this hallway?
5. Any other solution besides building a finished hallway connecting the two buildings?

I thank you all in advance for your awesome help. You don't know what your help means to a desperate person like I.
Thanks again.

Teri

Obviously, you are in California, and I am no where near there, but those are my experiences in four midwestern states.
 
Last edited:

trinity

Freshman Member
Joined
Jun 27, 2008
Professional Status
General Public
State
California
I thank all of you for your replies. They have been very, very helpful. Well, the buyer is still interested in the home as long as the sale price is the appraised price. Sure, why not, he's essentially getting the exact same home for a $25K discount. Well, it's $25K and not $55K because the detached building still has some value and we sold the house at below market value.

The CMA for this area is approx. $115 /sqft. The detached building is 480sqft. $115X480=$55,200. So just in a matter of days, my home has lost 37% of it's value. I'm still in shock.

I did speak to an appraiser and she told the same things that one of you have mentioned. Will the hallway flow with the house? No. Will I be able to recover the cost of building the hallway, heating and cooling it, and losing more in terms of value in todays very bad CA market? Probably not.

So, I looking into pursuing another avenue. I know most of you here on this forum are appraisers. I'm just trying to understand why when the house was purchased, the appraiser had included the detached building in the GLA.

The appraiser(I will not mention names) whom I spoke with said that it was a gross mistake and could not have easily have been made. She did mention legal action. My questions are:

1. Do appraisers purchase insurance for liability reasons just like doctors? Just in case they get sued for a mistake like in this case? I feel really bad in going after someone's livelihood.
2. Is there a statue of limitations since this was 6 years ago?
3. Will title insurance cover something like that?
4. Who can I go after, if at all?
5. Do I still have to own the property in order to take legal action? Or can I sell it can and make a claim for the loss of value later?

I know most of you here on this forum are appraisers and will probably hate me at the mention of legal action. I can understand that. You're only protecting your own.
I hope you also can understand my situation.

Thanking all of you in advance for your replies.

Teri
 

rcsone

Senior Member
Joined
May 26, 2007
Professional Status
Certified Residential Appraiser
State
Oklahoma
...legal action needed delivered to the deserving, so be it.........rs
 

CURT VAN HOOSER

Senior Member
Joined
Nov 3, 2003
Professional Status
Licensed Appraiser
State
California
Not having seen either report, anything I or anyone else says regarding your particular situation is speculation. I have no idea what the legal fees would be to bring suit against the original appraiser, but I believe I would try to do a little leg work first. For instance, though the GLA was inaccurately reported, is the difference in value between the 1,680 sqft he/she used and what the 1,200 sqft house plus 480 sqft detached unit would bring, significant enough to make your trouble worthwhile?

I'm not trying to discourage you, just trying to provoke thought. I suppose it would be in your best interest to contact a lawyer before you actually sell your house to make sure bringing a suit after the fact is possible. If not, and you possibly stand to recoup some money, it may behove you to set the sale aside.
 

realbiz

Junior Member
Joined
Mar 14, 2008
Professional Status
Certified General Appraiser
State
California
As you said, we are appraisers. Now you want legal advice, this is going to cost you:laugh:. If I gave you legal advice on this I would be in front of my sister who is a judge in Fresnom2:. Seek legal advice, and pay for it:beer:.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks