Profile picture for blburkha

Appraiser won't count finished basement sq footage because there is no bathroom

I'm the seller and the appraisal came in $20K under the purchase contract because the appraiser is not counting our FINISHED basement in the square footage because there is no bathroom down there.  I've never heard of such a thing?  Is this correct?  Since when does a basement have to have a bathroom to be counted as living space?  It is finished with a ceiling, walls and floors.  Stumped!  Any advice?  The buyer is trying to get a new appraisal but I would like to file a complaint against this guy if he is wrong.  How do I do that?  Thanks
  • September 26 2013 - Lawrenceville
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Answers (6)

Best Answer

Situations like this are not uncommon, on a multi level home that bottom level can be tricky to assign; is it included in the GLA or is it finished terrace/basement? The lack of a bathroom is NOT/SHOULD NOT be the swing factor.

I tried posting a link to the NC guidelines for what constitutes living area as defined by FNMA - and what appraisers are expected to follow. Zillow yanked it of course. So, here is a summary and it reflects FNMA definitions:

xxxxxxxxxxxxxx

Real estate appraisers and lenders generally adhere to more detailed criteria in arriving at the living area or "gross living area" of residential dwellings. This normally includes distinguishing "above-grade" from "below-grade" area, which is also required by many multiple listing services.
 
"Above-Grade" is defined as space on any level of a dwelling which has living area and no earth adjacent to any exterior wall on that level. 

"Below-Grade" is space on any level which has living area, is accessible by interior stairs, and has earth adjacent to any exterior wall on that level. If earth is adjacent to any portion of a wall, the entire level is considered "below-grade."

Space that is "at" or "on grade" is considered "above-grade." While real estate agents are encouraged to provide the most complete information available about properties offered for sale, the Guidelines recognize that the separate reporting of "above-grade" and "below-grade" area can be impractical in the advertising and marketing of homes. For this reason, real estate agents are permitted under these Guidelines to report square footage of the dwelling as the total "living area" without a separate distinction between "above-grade" and "below-grade" areas.

However, to help avoid confusion and concern, agents should alert purchasers and sellers that the appraisal report may reflect differences in the way living area is defined and described by the lender, appraiser, and the North Carolina Building Code which could affect the amount of living area reported.

xxxxxxx

Hope that helps - if not drop me an email and we can discuss

  • September 27 2013
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Profile picture for blburkha
Thanks for all the guidance.  The appraisal report shows 1452 square feet above grade.  Then he marked the NO box next to basement question.  So he is not considering it a basement I guess.  The lowest level of my tri-level home is another 300 square feet on top of the 1452 on the first two floors.  It is heated and cooled and fully finished.  Just not a bathroom.  I don't see anywhere on the appraisal where he is noting the 300 square feet as below grade either.  The other thing that just really gets me...if you look at what I'm paying taxes on, it's 1752 square feet!  No where does he mention the bathroom issue in the appraisal.  He told me that verbally of course.  I quote "I don't consider your basement living space since there is no bathroom".  Crazy stuff.  Just really want to understand.  Thanks to all for the help!  Guess there is nothing I can do about it. 
  • September 27 2013
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Profile picture for wetdawgs
Is the bottom level fully above grade?   As you are calling it "basement", I'm a bit confused with the conversation.

It is common for levels partially or fully below grade to be called "basement" and given a lower price per square foot.    Therefore, the house square footage would be shown as XXX sq feet plus YY square feet of basement.
  • September 27 2013
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Profile picture for blburkha
Let me further clarify.  He is saying my home is a tri-level home so there is no basement but won't count the bottom level because of the bathroom issue.  So technically, it's not a basement.  Still shouldn't count?
  • September 27 2013
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Profile picture for CallTheSisters
Basement square footage is never computed at the same square footage as above ground square footage. 

Your Realtor should have explained that to you when you listed your home.

If the finished square footage is not heated it will not count at all.
  • September 27 2013
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He's not wrong and he's not "not counting" the area because it lacks a bathroom. he is not counting it because he shouldn't.

Finished basement area IS NOT considered in the living area calculation, it is considered as finished basement.

I'm an appraiser - several links will show you how appraisers ARE REQUIRED to measure, calculate SF and what constitutes SF
.

[Hotlink removed by Zillow moderator. Please see our Good Neighbor Policy for more information.]
  • September 26 2013
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