What constitutes a basement

[Ellefant2sea]

When we purchased our home it was 2460 sq ft trilevel home. In having the home appraised for a refi, it apparently has turned into a 1708 sq ft home with a "basement" which is not included in the sq footage. As I sit here in the "basement", I overlookd the deck, 4 foot above the backyard, and the front entry door, living room and kitchen through the full opening with railing that opens our entire family room up to the main level. It would never have worked to have an unfinished basement totally open to the rest of the house. What we purchased was a tri level home with the front wall of one room 4' to 3' below grade and around one corner 2' to 0' below grade. The rest of this "basement" is above grade as it gets with a 2' to 5 foot crawl space.
Have they changed the rules? Is everything on our lower level basement now?

 

[Michigan CG]

When we purchased our home it was 2460 sq ft trilevel home. In having the home appraised for a refi, it apparently has turned into a 1708 sq ft home with a "basement" which is not included in the sq footage. As I sit here in the "basement", I overlookd the deck, 4 foot above the backyard, and the front entry door, living room and kitchen through the full opening with railing that opens our entire family room up to the main level. It would never have worked to have an unfinished basement totally open to the rest of the house. What we purchased was a tri level home with the front wall of one room 4' to 3' below grade and around one corner 2' to 0' below grade. The rest of this "basement" is above grade as it gets with a 2' to 5 foot crawl space.
Have they changed the rules? Is everything on our lower level basement now?

Yes, according to ANSI standards.

That does not mean that the lower level(s) don't have value but the GLA is ABOVE GRADE.

 

[AnonApprsr]

Your finished basement will probably still contribute value to the property in an appraisal. This value can even be equal to the value it would contribute as GLA.

 

[TEL2002]

An earth covered home would ALL be 'below grade', but it would still have value.

The key is the appraiser needs to compare apples to apples and not compare an apple to an orange. IOW, I would hope your appraiser used comparables with similarly finished basements and similar square footage above grade.

 

[Blueprint]

In terms of value, market perception. In terms of legal, ANSI standards.

What matters to you is market perception of the lower level in the local market. Forget the appraisal, at least for now. The appraisal may be right or wrong when it comes to typical buyer perception.

Did the appraiser value the lower level space different from the GLA?

Markets perception of below grade areas varies tremendously, particularly from east to west. If an unbiased typical buyer of the subject in your market, would consider the lower level as GLA, it should be valued in equal fashion as the upper levels, whether or not it is referred to a basement in the appraisal.

 

[Lee Lansford]

I was going to respond with some detailed comments but I see that those responding before me have offered good advice.

 

[Mike Kennedy]

Clarification note: Adherence to the ANSI is voluntary in all states. Your local (state, county, town, city, village) governing Municipal Building Department should be the source of the "definition" you seek.

 

[Mike Kennedy]

The ANSI Standard for Measuring Houses

In April, 1996 the American National Standards Institute (ANSI) adopted a standard for measuring single-family residential buildings. American National Standard Z765-1996 was developed through a process of consensus among a wide variety of participants. These included the American Institute of Architects, the Appraisal Foundation, the Building Owners and Managers Association, the Manufactured Housing Institute, the National Association of Realtors, Fannie Mae, Freddie Mac, HUD and others.

The ANSI standards are NOT LAW, only a voluntary guide, and are subject to periodic review and revision. But anyone using these standards must apply them as a whole, and not just pick out the parts they like or agree with. The standards are intended for both attached and detached single family residences, but not for apartments or multi-family residences.
[FONT=&quot]Basements and Below-Grade Floor Areas[/FONT][FONT=&quot]

The ANSI standards make a strong distinction between above-grade and below-grade floor area. The above-grade floor area is the sum of all finished square footage which is entirely above ground level. The below-grade floor area includes spaces which are wholly or partly below ground level.

Disregard the old rules of thumb that allow you to include below-grade areas if they are less than five feet below grade, or if less than half the area is below grade. If the house has any areas below the natural grade, measure that whole level separately. Even if the below-grade areas are fully finished, they are not part of the finished floor area according to ANSI standards[/FONT]The ANSI standards define "finished area" as “an enclosed area in a house suitable for year-round use, embodying walls, floors, and ceilings that are similar to the rest of the house.” Measurements must be taken to the nearest inch or tenth of a foot, and floor area must be reported to the nearest square foot. Garages are specifically excluded.