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Old 09-14-2008, 05:30 PM
 
Location: OK
2,717 posts, read 6,289,617 times
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Quote:
Originally Posted by NY'er lost in MA View Post
Thanks for all the replies. It is a walk out basement with 3 windows- so it is not 100% below grade. Regardless, would a lender actually report this and cause fines? I find that hard to believe.
In my experience, a lender will ask the appraiser whether or not permits were obtained for a remodel or addition IF the house is in an area/town where permits are required.

They won't report it, but they do not want to lend on the total GLA for a house that does not have the permits. The reason for this is that if the borrower defaults on the mortgage and the lender has to take it back, they want to be able to unload it with a minimum of hassle.
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Old 09-14-2008, 05:36 PM
 
735 posts, read 3,154,674 times
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Quote:
Originally Posted by Schousse View Post
In my experience, a lender will ask the appraiser whether or not permits were obtained for a remodel or addition IF the house is in an area/town where permits are required.

They won't report it, but they do not want to lend on the total GLA for a house that does not have the permits. The reason for this is that if the borrower defaults on the mortgage and the lender has to take it back, they want to be able to unload it with a minimum of hassle.
Okay- thank you- good explanation!! Now I understand....

In your opinion- even if the area is not part of the GLA - couldn't it sway the appraiser in some way- for example vs. a comp home with an unfinished basement? Or would the appraiser completely disregard the finished part?
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Old 09-14-2008, 05:38 PM
 
Location: OK
2,717 posts, read 6,289,617 times
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Quote:
Originally Posted by NY'er lost in MA View Post
The appraiser was with a lender (attempting to refinance) and gave no business card- she barely even conversed with me and left abruptly after measuring the exterior of our home.
She didn't come inside to look around an take interior photographs??????

Quote:
When I asked about particulars like the granite counters and hardwood flooring throughout she said she was not allowed to discuss the appraisal with the owners and we could order a report afterwards through the lender?!
There is an asinine law that prohibits us to discuss the appraisal with the borrower unless the LO gives written permission to do so, despite the fact that the borrower pays for the appraisal. An appraisal for lending purposes MUST be ordered by the LO/Lender and they are the client.

This was a result of the S&L melt down many years ago when the powers that be decided that appraisers could be influenced by homeowners and because LOs are professionals, there would be no pressure or attempts to influence.

We all know how THAT turned out. Sadly, there are appraisers out there who will cave when a LO tells him/her .... "you make this deal work and there are 10 orders a month in it for you."

Quote:
With a previous property we had an appraiser come out for the same exact thing- refinancing and she was very polite and discussed the upgrades we did vs. comps in the area etc. And the appraisal came through favorably. She really took her time and everyone was happy- the lender and us!
I hope she discussed it in general terms and not in specifics. Because she can lose her license for doing that.

We always give the borrower our business card but tell them right up front that we cannot discuss the appraisal with them unless their LO sends us an email authorizing to do so.
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Old 09-14-2008, 05:40 PM
 
Location: OK
2,717 posts, read 6,289,617 times
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Quote:
Originally Posted by NY'er lost in MA View Post
Okay- thank you- good explanation!! Now I understand....

In your opinion- even if the area is not part of the GLA - couldn't it sway the appraiser in some way- for example vs. a comp home with an unfinished basement? Or would the appraiser completely disregard the finished part?
There is nothing to sway ..... we don't determine value based on personal likes/dislikes .... we measure the market response and use Paired Sales Analysis to determine a contributory value.

Based on what you told me I would certainly take the finished part in consideration and determine a value by Paired Sales Analysis or, if data is not available, by other, supportable, means.
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Old 09-14-2008, 08:09 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,435 times
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do you have a source book you can reference to for the uniform appraisal guidelines? try sourcing the basement specifics there. i am interested in this.
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Old 09-15-2008, 01:31 PM
 
Location: OK
2,717 posts, read 6,289,617 times
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Quote:
Originally Posted by brokerdave View Post
do you have a source book you can reference to for the uniform appraisal guidelines? try sourcing the basement specifics there. i am interested in this.
I don't know what you mean by uniform appraisal guidelines. However, ANSI Standards are guidelines and can be deviated from when local customs dictate, provided an explanation is included in the report.

The Uniform Standards of Professional Appraisal Practice (USPAP) do not cover this issue.
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Old 09-15-2008, 02:45 PM
 
Location: Pawnee Nation
7,525 posts, read 14,540,277 times
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Quote:
Originally Posted by brokerdave View Post
do you have a source book you can reference to for the uniform appraisal guidelines? try sourcing the basement specifics there. i am interested in this.
From: SQUARE FOOTAGE–METHOD FOR CALCULATING: ANSI Z765-2003

Quote:
Detached Single-Family Finished Square Footage
For detached single-family houses, the finished square footage of each level is the sum of finished areas on that
level measured at floor level to the exterior finished surface of the outside walls.
Quote:
Above- and Below-Grade Finished Areas
The above-grade finished square footage of a house is the sum of finished areas on levels that are entirely above
grade. The below-grade finished square footage of a house is the sum of finished areas on levels that are wholly or
partly below grade.
Quote:
Reporting of Above- and Below-Grade Areas
No statement of a house’s finished square footage can be made without the clear and separate distinction of
above-grade areas and below-grade areas.
Quote:
Ceiling Height Requirements
To be included in finished square footage calculations, finished areas must have a ceiling height of at least 7 feet
(2.13 meters) except under beams, ducts, and other obstructions where the height may be 6 feet 4 inches (1.93
meters); under stairs where there is no specified height requirement; or where the ceiling is sloped. If a room’s
ceiling is sloped, at least one-half of the finished square footage in that room must have a vertical ceiling height of
at least 7 feet (2.13 meters); no portion of the finished area that has a height of less than 5 feet (1.52 meters) may
be included in finished square footage.
You can get a copy here:
NAHB Research Center
400 Prince George’s Boulevard
Upper Marlboro, Maryland 20774-8731
301-249-4000 phone
301-430-6180 fax
http://www.nahbrc.org


As Schousse said, USPAP does not address specifics such as how to measure or other such items. It deals with the ethics and overall concepts. It provides definitions, addresses competency, deals with how appraisers approach a problem. It does not tell you how to make adjustments, how to measure, what value principle applies to what situation ow what definition of value you have to use. It does address the responsibility of the appraiser in Real Estate Appraising, Personal Property Appraising, Real Estate Consulting, Appraisal Report Reviewing, Mass Appraising, Equipment Appraising, Value in use and Business Appraising, Report types and delivery, Work file maintenance, and other Appraisal Practice issues.

You can find the complete USPAP (Uniform Standards of Professional Appraisal Practice) here: http://www.appraisalfoundation.org/s...6&DOC=FILE.PDF
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Old 04-26-2009, 11:11 AM
 
Location: Stoughton
3 posts, read 7,809 times
Reputation: 10
Originally Posted by brokerdave
strange. i know a dozen states personally that basements are standard for the area's but are not allowed to be included with comparables.

finished basements are calculated separately from the above-ground Gross Living Area(GLA). this is what i meant and that is a regulation for you to follow. while this may be a selling point for a seller, not necessarily a value point for appraising. i understand that local markets will dictate the value of a finished basement. but this usually has to be influenced by governmental regulations/zoning, how new the structure is, the quality of the finish work and other factors.

i never stated my degree of knowledge, if any, for MA. and i also said they should check with local contractors to find out about permit. most of america doesnt require permitting.

i would suggest calling your past appraiser and asking for an explanation.
-------------------------------------------------------------------------------------------
BrokerDave: Will you please cite the federal laws to which you refer for NOT counting below-grade basements?

Thanks -


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