ANSI Measuring Standard Required in 2022
On December 15, 2021, Fannie Mae announced that it will be adopting ANSI Measuring Standard in 2022.
Appraisers will be required to use the Square Footage-Method for Calculating: ANSI® Z765-2021 (American National Standards Institute®) Measuring Standard for measuring, calculating, and reporting gross living area (GLA) and non-GLA areas of subject properties for appraisals requiring interior and exterior inspections with effective dates of April 1, 2022 or later for loans sold to Fannie Mae.
For more information, watch this video and check out this fact sheet.
- Measurements are taken to the nearest inch or tenth of a foot, and the final square footage is reported to the nearest whole square foot.
- Staircases are included in the GLA of the floor from which they descend.
- Basement is any space that is partially or completely below grade.
- The GLA calculation does not include openings to the floor below, e.g., two-story foyers.
- Finished areas must have a ceiling height of at least 7’. In a room with a sloping ceiling, at least 50% of the finished square footage of the room must have a ceiling height of at least 7’ and no portion of the finished area that has a ceiling height of less than 5’ can be included in the GLA.
- If a house has a finished area that does not have a ceiling height of 7’ for 50% of the finished area, e.g., some cape cods, in conformance with the ANSI Standard, the appraiser may put this area on a separate line in the Sales Comparison Grid with the appropriate market adjustment. The report will be ANSI-compliant and also acknowledge the contributing value of the non-GLA square footage.
What if comparable sales are measured differently?
GLA for properties in local MLS systems and assessor records may not be ANSI-compliant. The appraiser may not know what method an MLS listing or assessor used to calculate the GLA. Through research and their knowledge of the local market, appraisers determine if the GLA provided through alternate sources should be adjusted. The adjustment process does not change the requirement to report subject GLA to the ANSI standard.
Does following ANSI even reflect the market? Perhaps, adopting the ANSI standard will make the description of the subject property more precise. However, how is this going to help if Realtors, assessors, builders and architects are not measuring by the same standard? Will this create a false sense of accuracy? Will there be a lot more discrepancies once the ANSI measuring standard is used by appraisers for the subject property while the comparable sales are measured by a different measuring standards. And how do we apply the ANSI measuring standard on exterior-only appraisals, desktops, hybrids and 2055s?
- Bye Bye AMC: A Script to Sideline Appraisal Middlemen - May 15, 2025
- Appraisal Institute’s Harassment, Tests, and Dance with AMCs - May 9, 2025
- The PAREA Program: Costly Promises, Empty Support - May 6, 2025
Measure all you want but unless you are going to pay me another $1,000 a job to go measure all my comps and make sure I have access to all comps then this is a bunch of bs. Apples to apples people.
The assessors in my areas do not use this standard. Matter of fact I think it is only 3 states where it is a mandatory requirement. I myself do not like the standard.
Koma, what standard of measurement do the other 47 states use? If you’re not a fan of ANSI, how would you prefer to measure a home’s area?
The American Measurement Standard. I don’t now what the other 44 states use. My mentor taught me this and the dozens of others he trained starting back in the early 80’s. This is what I prefer and will keep using.
https://en.wikipedia.org/wiki/American_Measurement_Standard
https://heartlandro.realtor/download/sqft.pdf
That’s Hamps work, refer to pg 13.
https://appraisersblogs.com/appraisal/two-measurement-standards-ansi-vs-ams/ (Hamp again, 2011 article on this blog.)
https://www.e-rallc.com/ANSIstandards
Detailing the previous exceptions to the standards.
https://www.workingre.com/measuring-understanding-ansi-standards/
Even ANSI proponents have disclaimers; ‘The ANSI standard is not intended to supercede any locally imposed system of residential measurement.’
Although ANSI is widely accepted and even codified into various state regs, that is not true everywhere and there are entire regions where ANSI standards are not the norm of size reporting. The goal has always been most reliable approaches for most credible assignment results.
This should be agents not appraisers
We measure to the nearest 6 inches (appraisers standard) minus trim or extended walls. all other standards are similar to ANSI. The problem with the ANSI standard of nearest inch or 1 tenth foot is most houses are not perfectly square due to settling and other factors by using the nearest 6 inches it can be adjusted an inch or two to make the house square and if you have a lot of extra sides or angles on one side with additional thickness of trim and angles and a strait wall on the other it can be a foot different from one side to the other. (Using the strait wall for total length would be best.) So, the nearest 6 inches minus trim thickness seems to be a better standard. 4 inches minus trim would round up to 6 inches and 3 inches minus trim would round down to an even foot.
Measuring an outside wall to an outside wall is wider than the Inside to the inside wall, also look out for the thornbushes, they also add unwanted width. Measure all four, or more sides and adjust, Appraisers are allowed, Engineers or Architects, maybe not.
I’ve been at this 45+ years. This is not the first time some institution has tried to standardize home measurements. My reports will now simply state; Appraiser has measured the subject under ANSI methodology. Appraiser cannot warrant that comp’s reported sizes were measured under the same method. Further explanation of livable area are made in the comparison sales comments.
I can see this is going to be very interesting in the near furure.
Oh Well, it is what it is.
Van Wolslagel
Chief Appraiser
THE APPRAISAL WORKSHOPPE CO.
Appraisals & Inspections since 1972
I like this blurb. Will use something similar.
This measuring standard isn’t really much different than how we all should have been trained anyway. Banks have been very cooperative, too.
It will be the private requests that owners will argue I would guess (lower ceilings, gabled walls, etc).
Read “Mansions”, a supplement to a National publication. This publication stresses uniqueness, style, privacy, appealing to Architects, and ignoring costs.
Production housing is supported by builders, realtors, architects, small governments, and small communities, looking for efficiencies and reduction of costs.
Can we rate appraisers to ONLY Californicated developments?
hey Mike !
more reason for me to GET OUT OF LENDER WORK.
Van, I’ll buy you a beer at the airport, call me, don
Nearest 6″? What if the builder did that? How hard is it to use ACTUAL measurements. I have been for the last 28 years and have had no problems.
because MOST houses are built to the nearest 4 FOOT increment, as it costs more to cut material down to something less, and all building codes and materials are designed to accomodate that. 16″ on center exterior wall studs fit evenly in 4′ increments. Plywood, the material of choice in modern roof sheathing, is 4′ wide from the factory. Styrofoam insulation panels, too. T-111 exterior siding is as well.
Do not submit to these dictatorial mandates that put even more liability on the appraiser. We are not architects or home builders. We value property. Hopefully, the AGA will condemn this charade quickly.
https://cdn.recolorado.com/files/helpcenter/Square-Footage-Companion.pdf?
So rich to be able to post this. Especially after so many posters on this page were slinging mud and pushing fallacy and false accusation. Come again? It’s not over yet.
From the Corelogic Matrix MLS system none the less. Claiming RESO compliance! Let’s ask FNMA whom is more authoritative, the RESO group or the ANSI residential measuring standards work group.
* A bi-level house does not typically have a basement. All three fields should be the same
Someone should put the RESO group, FNMA, and the ANSI group together so they can clean up this tremendous mess they just made. I’ll bring the broom and popcorn!
Apparently MLS is not even bothering with the ANSI standard. This document published today; 04/13/2022.
++++++++++++++++++++++++++++
Square footage is calculated based on three required fields in REcolorado Matrix. Use this guide to help you determine the correct entries according to REcolorado Rules & Regulations.
!Above Grade Finished Area (SqFt Above): Above grade and partially above grade finished square footage.
!Living Area (SqFt Finished): All finished square footage of the property, including the basement if finished.
!Building Area Total (SqFt Total): All finished and unfinished square footage of the property, including all levels and the basement. The total area within the structure. Building Area Total includes only the primary building. This excludes garages, decks, etc.
!Basement Yes/No: Indicate if there is a basement or not. Below Grade Finished Area and Below Grade Unfinished Area are calculated automatically based on the previous field entries.
Basement: Indicate features of the basement, including Full, Partial, Standard/Interior Entry, Garden Level, Walk-Out Access, Unfinished, and more.
!Indicates a Required Field
+++++++++++++++++++++++++++++++++++++++++
Oh boy. We’ve got problems.
plus is this the real issue of “bad appraisals”? I would think comp selection should be addressed more than if I missed 200 sq ft of GLA. And according to EVERY agent that 200 sq ft is valued exactly as the the other 2500 sq ft of the house. Who comes up with this crap?
These idiots at the GSEs are trying desperately to improve their database to get better outputs for their AVM. The problem is they don’t know WTF they are doing. All this is a scheme to put all of us out of business.
I want to add that this will put appraisers at risk of greater liability. I can’t emphasize enough how serious this is.
If a closet has a 6’10” ceiling, I am now required to measure all of the closets and subtract them from GLA, but then double dip the measurements of the stairway
FNMA is becoming useless
I just do my job and report on the data that is obtainable and verifiable via a reliable source. If the realtors or assesors are incorrect in their reporting then that is a “them” problem. We are able to put very specific disclaimers and explanations of data verification and reliability within our reports and this is sufficient for the CYA requirements. I have been to court and hauled in front of “The Man” and argued these and other discrepancies and had issues dismissed. You are not committing violations or fraud if you are utilizing data from real estate professionals and you make it clear as to the limitations and lack of control you have over data reporting and accuracy of your peers and associates. Just “Chive On” and quit worrying about the industry, we all have much bigger problems, China, Russia, Joe Biden and our corrupt illegal federal government…
High five Sean 100%
Please don’t get political. Stay professional.
Completely true. The courthouse, the listing agents, none of them measure to this standard, and we’re lucky if they even measured walls accurately at all.
And it is insane to try and adjust for square footage that’s below 7 feet, anyway. What does the market think of sloping ceilings?…that you can generalize, but the market is not looking at specific square footage of below-7′ living area.
This nonsense will require specialized equipment and two people to measure the exterior of even a standard ranch house, given that bushes and other obstructions will need to be avoided (sometimes impossible), and someone will need to hold the target for the laser measuring tool, or a stand will have to be used, where both the target and laser are kept at the same height with respect to the walls of the house, to avoid losing or gaining inches due to angle.
And my notice on this stated condos were exempt from these standards…general appraisers opting themselves out of unreasonable requirements, while single-family appraisers are dumped on?
And does anyone’s market, out there, even use GLA as anything other than a general requirement to determine which houses they want to consider buying? Most markets do not consider much past a “small, medium, or large” house, just as they don’t consider the difference between a full acre parcel or a .9 acre.
Whoever is requiring this tripe has clearly never done this job before.
“This nonsense will require specialized equipment and two people to measure the exterior of even a standard ranch house, given that bushes and other obstructions will need to be avoided (sometimes impossible), and someone will need to hold the target for the laser measuring tool, or a stand will have to be used, where both the target and laser are kept at the same height with respect to the walls of the house, to avoid losing or gaining inches due to angle.”
You are joking right? I have been measuring this way since 1994. I have had no problems with it at all. I am able to measure a “standard” ranch to an extremely com custom house alone. All of these obstructions have ALWAYS been around and it is easy to work around ESPECAILLY with laser measuring tools. This is where they really help, you dont have to go in the bushes nearly as much. I have always been able to hit some sort of target. Unless you are pointing the laser at a crazy angle you dont have to worry about “losing or gaining inches due to angle”. Besides the good lasers have a function that will give the level measurement at almost any angle you hold it on.
The funny thing is FNMAs computer reviews judge use partly based on what the Assessor has for the size. I had one in which all of the comparables were Tri-Levels. The Assessor called one a two-story, one a ranch and one a split-level. So, the size and style were different for all of them when in reality they were basically the same style house. I had a comment in my report explaining this, but FNMAs computer cannot read the comments. So, I received a lower rating on the review because of the incorrect Assessor data.
I sometimes wonder why do we even need a sketch in our reports if no on even looks at them? FNMA does not really want appraisers anymore they just need form fillers, they want everything to be the same that is why they are redoing the forms, it will make it easier for the computer to read. Appraisers will now be called “data entry specialists.” Our function will be to feed the computer, feed the computer, feed the computer. 2 – 3 more years and I am done with the BS. After 38 years I am starting feel it. It is no longer fun.
You and me both brother!
….and just a small step further, and logic says that if agents, assessors, or property owners are not also both using and proficient with the ANSI system…. that all other sources will likely be reported with greater square footage than per ANSI standards. Unless such sources are to be permanently eliminated as “reliable” then it would seem that market reaction to differences will work against the subject in virtually all cases. In addition, if FNMA is going to continue to skim data with consistency a mandatory factor, would it not seem that virtually every appraisal from here on out will be rejected by Fannie for lack of consistency?
Wanna really scratch your head, think deeply about the Fannie requirement that a solar system cannot be considered in final value if: 1) It is leased; 2) it is financed in any other circumstance that the original purchase money financing arrangements; or 3) there is some binding provision that the secured company or lender cannot foreclose on / repossess any of the solar system components in the event of non payment. So….. unless the subject solar system on the subject is free and clear, and the lender/client can prove it, the property being appraised might as well be without solar at all. In addition, since there is really no possible way to determine “comparable property” solar system status (using the same criteria) then effectively there is no verifiable market reaction to financing of any kind, and forever foward there is no verifiable support for the value contribution of a solar system of any capability at any cost and however effective.
FNMA = ‘Peter Principal’
They have promoted themselves to a place where they are collapsing from the weight of bad decisions. They need a new script and a scapegoat.
The script is a fairy tale. The scapegoat antagonist as usual is all appraisers. Of course the protagonist /
savior is FNMA.
Turn sound off, it’s only music to distract. No narrative
https://fanniemae.qumucloud.com/view/Gr6xh2x39AI1zQwixnxToA/sidebar/attachments
FNMA should really take a long hard look at ERC and it’s methods, forms, etc.. They would not be playing in this bizarre fantasy sandbox if they had done so years ago.
An appraiser always told me “nobody is that good”! If an inch or two or rounding to the nearest foot will make a difference in your value, then you are fooling yourself as to how good of an appraiser you are.
Yea I have one like this, 3 houses the same size. One states 1056 SF, one 2112 SF and the other, 1576 SF.
The appraiser defines the scope of work per USPAP. Hard stop. Disclose, disclose, disclose.
The county records in the areas I work in do not state which method they use. I’ve always used the ANSI standard when measuring and used my best judgment on the comps, so no change for me. It’s a good thing the GSEs have finally state unequivocally what they want on this issue
Does this mean that FNMA CU appraisal review process will no longer require appraisers to comment on why their gla is different from the public records/assessors gla?
CU error code FRE1001: The gross living area for the subject property ([GLA] sf) varies by more than [X]% and [Y] sf from public records ([GLA] sf). Please confirm the reported gross living area for the subject property is accurate and adequately supported.
ANSI has been the standard as long as I can remember, and I started in 1984. Looks like someone is late to the party.
Virgil Gleason that’s exactly the thought going through my head. If Realtors and appraisers and assessors were using a DIFFERENT standard, what would it have been? Since the beginning of time, ANSI was the standard.
In my market most Realtors use whatever the Assessor has even if it is incorrect. They have a comment in the MLS that says the buyer needs to measure the house. How many buyers’ agents help the buyer measure the house? On occasion a Broker knows something is off so they will pay me to measure the house for them. But for the most part they do not care. In some listings it says the PR was used, but when I check with the PR the numbers are not even close.
Do you honestly think that many county assessors use ANSI standards? I would bet that the vast majority of the assessed calculations are wrong, maybe not by much but they are not compliant with these standards. So how then are you to apply GLA adjustments if that home has not been measured to ANSI standards?
The ANSI Standard for Home Measurements was ” First LAUNCHED” in April 1996 .
ANSI is the non profit organization for the voluntary standardizing of many things. American National Standard Institute.
” The American National Standards Institute is a private non-profit organization that oversees the development of voluntary consensus standards for products, services, processes, systems, and personnel in the United States. The organization also coordinates U.S. standards with international standards so that American products can be used worldwide.”
The organization was not founded for the purpose of measuring the GLA of residential properties and are not aware of the problems that the Association’s adopted and promoted uniform measurement system creates on anything with as much diversity, state and local requirements and personal needs or preferences as Residential Real Estate in both construction and valuation.
There is much more to accurate valuation of Real Residential property than simple standardized measurement. Market Reaction can not be Standardized IMO. What is acceptable and even preferred by one individual does not always meet the needs and wants of another.
The organization has no experience in the area of Appraisal valuation and/ or market reactions to residential properties. While uniformity and standards may be very beneficial in the Manufactuing of switch plates or after market auto parts or many other manufactured items, Many Standards can not translate into items that have always been and will always be as individual and unique as homes and residential construction,
Residential valuation and marketing is just as diverse as human beings in many ways. Not all men can be described as 5’8 to 5’10 and not all homes GLA can be stated as Always only above ground or always 7′ ceiling height. And we , no one can have a STANDARD unless everyone involved adopts the same method.
We have sent FNMA a similar information blog, but they refuse to acknowledge they have made a whopper of a mistake trying to make an apple taste like a banana.
“The appraiser may not know what method an MLS listing or assessor used to calculate the GLA. Through research and their knowledge of the local market, appraisers determine if the GLA provided through alternate sources should be adjusted.”
No I won’t be adjusting someone else’s data and be liable for it? Not happening!
So nothing has changed. It’s the way I’ve been doing it for 30 years
So how do you apply ANSI on a drive-by? How do you measure a 2 story foyer / family room, and how do you know if a cape cod finished areas have a ceiling height of at least 7’ when you are not doing an interior inspection?
You don’t.
“If the appraiser is unable to adhere to the ANSI Standard, the appraiser will provide the code “GXX001 –” in the Additional Features field on the appraisal form and must explain why compliance was not possible.”
You just add a comment for drive-bys and comparables that it’s not possible without a full inspection.
Let Fannie Mae sort it out.
Good to know. Thanks for the info Seneca
There are comments in ANSI handbook specifically addressing 2055s and new construction
How do you know if a cape cod finished areas have a ceiling height of at least 7’ …..Interior photos….or Look at the sale from outside and use your appraiser skills you are already supposed to have, call the realtor….LOL
How do you apply ANSI on a drive-by?….you don’t, you use whats available to you and make statements and disclaimers.
Some of the houses are older than 30 years Did they RE measure with the standardization?, or what. I know do you?
Many of the houses we do are in excess of 100 years old, the construction was barely measured at all, and most of the architecture was built by eyeballing the lengths and distances.
Still better construction than modern cardboard housing.
So, we are now to be going around measuring homes for a drive-by? I don’t think so. My life is worth more than this job.
Take a pill, get over it.
I have a question about comparables
If the MLS says one thing and the Public Record says something different which one, do you use? Also, if you know that they are both incorrect what do you do? In some markets buyers do not consider a lower level with above grade windows to be a basement. However, the PR might have it as a ranch with a basement, as a two-story, as a bi-level with both levels together, and sometimes as a bi-level with the levels separated. Why does FNMA believe that the PR with its old and incorrect data must be superior to the appraiser who just looked at the property and included current photos and a sketch?
Which is more important reporting the market’s reaction or complying to FNMA dictates. If the market says both levels (on a bi-level with above grade windows) should be together but FNMA says they want the levels separated for the appraisal which one is in compliances with USPAP? I just had a tri-level with all 3 levels fully above grade, the PR called the lower level a basement. FNMA used the PR for the review and said that I might have an overvaluation. This was totally bogus; the photos clearly show that the LL was not a basement. So, was I in compliance with USPAP by reporting the 3 levels together? If I came before the state board, what would they use? Would they hit me over the head with FNMA guidelines, or would they say good job, you report what you see?
I can’t ever remember coming up, in 30+ yrs, with the exact sq ft of MLS or Tax Assessor records. Realtors here only use what Assessor states. Unless they are using basements or rec rooms that have no interior access. Then it’s All In !
Using the assessor’s standard does not equal using their measurements. Some in this thread seem to conflate those. Using the same standard of measurement for comps and subjects is what is sought. Using one standard for subjects, and another for comps is not credible. Period.
So, are you going to personally measure all of the comparables with the same standard that you used to measure the subject? Have fun with that let us know how that turns out for you.
Yeah, in some of my areas you’ll be shot trying to do that.
In many of my areas, you can get shot just for taking the comp photo. Not a chance I will be getting out of my car and stepping/Trespassing on anybody else property. Not in my town.
Can good looking women be more courageous?
FYI, no, we cannot. Someone who’s pissy about you taking a photo of their house is not going to care what you look like or what you drive.
Self-claimed photographer OR good looker
So, you figure Realtors & Assessors are going to have to measure each listing to ANSI standards ? I don’t think so.
I guess they’ll have to take some meaningful education.
While the appraisers take it on the chin for years.
I sometimes wonder if the people at FNMA know what the hell they are doing. LL-2015-02, page 7 clearly states that “Fannie Mae currently does not have, and has never had, a limitation on a single-line item adjustment.” Last week FNMAs computer review said that one of my line-item adjustments was above 10%. So, which one is it? I had a comment in the report about the adjustment, but FNMA does not read the report before they give a warning to the lender and a low score to the appraiser.
CU 1-5 risk ratings are going to jump. It will bring even more flags for inconsistent comps modeling. I’ll fail to provide bracketing size, excess comparison by size alerts will be constant. This is the most idiotic proposal I’ve seen in 20 years of real estate. One size does not fit all. What about a large bi level with a full basement? Shall I report a 2 level basement where basement is twice the size of agla credited space?
Every single report if dealing with garden level will now spark probably at least 10 new EO risk alerts on both the appraisers review software and the lenders. If the goal is to slow appraisers down, confuse consumers, and provide reasons for more regulatory complaints, FNMA hit a home run with this one.
Question; Do you think zillow, trujilla, and every other data aggregate in this country will apply that standard as they auto map auto import existing assessors data? Will the VA panel adopt this standard? Will HUD also adopt this? NAR? Listing agents? Unlikely. This is interference with professional standards and commonly held performance expectations. Someone at FNMA needs to be fired immediately.
Complete theft of housing value. Many homes have bedrooms in their older style cape homes where the ceilings are less than 7′. My house for example is a 1.75 story home and has 2 bedrooms on the 2nd floor with a ceiling height is 6′ 9″ and is approx 1750 sf. I have just lost 750 sf of living area in my 1940’s cape and 2 of my bedrooms. Now I have a 1-bedroom house. This is insane, since 1940, my house has been a 3-bedroom, den, kitchen, dining room and living room house, now I have only 1 bedroom? How do I know if the comp I am using has that extra 2″ to make it a 7′ story? Guess my home is going on the market before April. Can’t afford to lose my square foot or bedrooms to this stupid new rule. We have entire houses built in the 1800s and 1700s that don’t even have a single story that has 7’… then what? A non-square foot home? I guess it will no longer conform to Fannie Mae? What a nightmare! I thought people hated me now… wait until I tell them they have no bedrooms and their GLA is half the size.
This will create systemic deficiencies in FNMA CU data, excess stipulation and revision clarification requests. If assessors and builders routinely omit stairs data.
Model matches will not be model matches anymore. Full 1004 service will result in different agla sizing statements. Repeat service will have us magically stating different sizes.
The previous FNMA standard was something with market standard and best logical reporting for uniform results.
For people whom think this is no big deal, consider yourself fortunate. There are entire counties where ANSI does not apply. I run a customary simple sketch to verify; ‘generally accurate assessment records’.
We have entire neighborhoods that consist of only bi and tri level homes, some with actual basements, others not. Garden level is agla state wide in Colorado! They built hundreds of thousands of homes with garden level and equivalent above grade quality for sump pits, water tables, soil conditions along with structural stability concerns, and energy efficiency reasons in the high country. They are often priced marketed and sold equivalent to 2 story units. ‘Typical’ reporting is garden level as agla. Am I supposed to speculate how much agla to cut out of comparable bi’s and tri’s, attribute that to basement and adjust it at a different cost basis? Garden level can literally consist of 1/3rd to 1/2 of the homes total size!
Years ago my mentors paced off the size of both the subject and the comps. Our Governor was petitioned and supported county wide publication of Records for Counties over a Million. Realtors used to compete in guessing the size, several tried to include the overhang. Lots of stuff happened, It’s better now, but it still takes effort.
>So, they trespassed on private property to pace off the size of the comps?
Around here you could get shot doing that.
I’m an Underwriter. Fannie states that “appraisers should include rooms located in above grade finished non-GLA areas in the room counts (Total Rooms, Bedrooms, Baths) in the improvement section and in the Sales Comparison Approach grid to comply with Uniform Appraisal Dataset requirements.”
In other words, move the non-GLA square footage to a separate line on the adjustment grid and give it a value (if warranted) and continue to count the bedroom or bathroom in your room count (even if that space is not included in the GLA).
Fannie also says “when there is a finished area that does not meet the ANSI minimum ceiling height requirements, the additional square footage MUST be reported on a separate line in the adjustment grid and a market adjustment applied, if warranted. We require the appraisal report to account for ALL OTHER SQUARE FOOTAGE that is not included in the GLA.”
This is less about “removing” square footage (Fannie wants every square foot accounted for) and more about categorizing it differently on the grid for uniformity. If your adjustments for the separate line item (non-GLA areas) have a market value equal to that of the GLA square footage, it will be a wash.
Adapt or die.
Steve….Well said !!!
Naaaaaa Steve, that’s no good, because you still drive up the gross adjustment indicator, even if you balance out the net.
Try this method instead, as detailed in this post way way way down at the bottom of this page. I had the dreaded tri level w/ basement, 4 total levels, and came up with a great solution.
It should be considered incompetent practice to drive up anything with false net/gross indicators. That’s not a practical suggestion, although it seems to be the go to suggestion from many an appraiser on this board. It is where the mind goes first, the first logical conclusion. We are forced to adjust it out, so just in turn adjust it back in elsewhere.
But then you’re left wondering about net/gross indicators and their fundamental importance to be truthful expressions of similarity and or dissimilarity of comparables. It is an illogical thing to think two relatively similar houses should have gross adjustments that high, yet zero net adjustments. It reads like some sort of clever appraisal trickery or fraud. Try this instead.
https://appraisersblogs.com/solving-the-ansi-measuring-dilemma-a-simple-work-around#comment-34587
Basically I ignored ANSI, filled grid normally, ran a pdf copy of both grid pages, uploaded them into the report. And then field locked my size adjusts after applying ansi to subject, but not applying ansi to comps. I ran all zero’s for size in the size adjust lines, left room count and room adjusts the same, and then applied my size in a lower line item. Exact net/gross match between the two reports. So I complied with ANSI technically, while snubbing the requirement and I never did apply any size adjusts along the ‘ansi method’. I hopped and stepped over the issue and ignored most of this incompetent non negotiable no opt out ansi dictatorial crap.
This whole illogical approach of parsing size out in ways not recognized by the local mls, not recognized by local people, not recognized by the municipal building codes which the assessor prescribes, it’s all hogwash. Whomever thought that was a good idea in places nobody else uses this standard is clearly incompetent. Appraisers are supposed to conform to and understand their municipal building codes in their local jurisdictions. To practice otherwise is a clear indicator of incompetency. So there are better methods to suggest.
The riddle is: How to find a work around without effecting the net/gross indicators…. I came up with than answer though.
And now FNMA is in violation of Dodd Frank Reg Z, by applying pressure to the appraiser and disallowing our own independent judgment. Wow I thought only lenders could apply that type of unethical hardline absolutist approach to appraisers, turns out FNMA supports pressuring appraisers despite resistance from those appraisers. We have people at FNMA whom have no respect for appraiser independence, and they’re making new rules which harm appraisers credibility and ability to make independent judgements. If there was an appraisal hotline up, I’d call and report FNMA and the ANSI group. ANSI should change their web page, there is nothing voluntary about this.
The most illogical rudimentary juvenile approach of saying above grade is a literal term. So stupid. Above grade is a general term meant to describe fundamental character and appeal. It takes a special kind of person to call a garden level a basement when all market data, local MLS guidance, and local municipal building codes say otherwise. A more sophisticated approach is what many jurisdictions use, which is recognizing a perimeter and volume based approach when it comes to defining what a basement is or not, qualifiable building area attributable to the generally above grade portions, etc. I’ve never met anyone in my entire life in Colorado whom mistook a garden level for a basement. Because we do not live in a two dimensional world.
Anyways, I’d bet underwriters are dealing with the aftermath of this incompetent guidance too. Seriously, think about suggesting my method. It’s very simple, requires only simple explanations and it’s basically just directions to scoot your size adjusts down to lower lines, and field lock the adjust areas those size adjusts normally go, enter zeros there instead. Scan in the report prior to doing that so as not to confuse the reader. It’s a clever function within the appraisal software to be able to field lock and over ride warning errors. Regardless though, warning indicators of size different jump in the final report which is xml readable because that’s what FNMA wants, the appearance of incompetent appraisers. Whomever pushed this as mandatory at FNMA should be fired for incompetency and violations of appraiser independence rules. It’s like they are clearly doing it wrong, on purpose. That’s gross incompetency. We all get to clean up their mess. Just fyi, I’m being critical of FNMA, not you. Thanks for participating in this thread. The ANSI mandate is a boondoggle of epic proportions.
Good ideas do not require force.
Baggins…No one cares about net/gross adjustments anymore, so why do you ???
Chris stop being a flaming egotist and speaking for everyone at once in a blanket extra extra extra extra extra ordinary assumption.
Nobody cares about net gross anymore? Do you even hear the words that come out of your own mouth? All the traders, all the mathematicians, all the assessors, all the tax collectors, the educators, the students, the stock market, the business analysts, the budget planners, pick any given department, the entire world just magically decided we don’t need reliable math anymore. You people are lost in an illusion. Wake up. Net gross does matter and nothing you or fnma say will change that.
Baggins… You’re going to lose all your clients if you keep up this absurdity. And I would rather not lose you on this forum.
One more time my friend, nobody cares about net and gross except you.
And I am still wondering why.
And who are you referring to as you people ?
Do you think there’s a big conspiracy against you, or is it that you’re just afraid they will notice you are using dissimilar comparables to write your appraisals?
And now you somehow believe that appraisers whom understand valuation theory are going to lose clients? That’s not what my managers said when they dealt with appraisers whom drove net/gross sky high for no good reason other than to comply with ANSI, despite nobody else in their local jurisdictions doing so.
Some people have provincial views where they can’t see the big picture of complex systems. Because if I was a portfolio manager or somehow involved with billions of dollars in mortgage securities; simple reliable references regarding appraisal development competency, like let’s just pick one out, the net/gross indicators. Who needs those?
Only in your own mind am I the only one out there whom believes in compliance with local municipal guidelines. Go ahead, take that position with the inspector, the treasurer, the tax collector, the sheriff. See what happens.
I admit, I’m not an appraiser. I’m learning a lot about the appraiser’s perspective on here. But Fannie doesn’t care about the gross adjustments. In fact, Fannie says “Fannie Mae does not have restrictions on gross, net or line item adjustments”.
I know this is painful. It adds a lot to my plate as well, as an underwriter, but the pesky underwriter conditions (in response to Collateral Underwriter conditions about GLA being “materially different from other appraisers”) that appraisers receive all the time now will, in theory, start to become less frequent if the entire industry moves to one standard. It will take years for old appraisals with old measuring standards to flush out of the system but GLA and non-GLA should become more consistent and transparent and uniform from one appraiser to the next as time passes.
Steve..Well said again….
Are you kidding? Do you have any idea how many people out there can’t use a measuring tape? Or have no concept of spatial awareness?
David….Are you really trying to say appraisers don’t know how to use a tape measure???
In 36 years of appraising and reviewing our peers work, I have seen all kinds of things. The most frequent has been appraisers not noticing that their subject property is landlocked
No Steve, you’re drinking the cool aid. “The industry”. Um… You mean specifically appraisers. Because ‘the real estate industry’ where I am at, does not use ANSI, and they probably never will either. The industry, except for the realty agents, except for the MLS groups, except for the assessors, except for all the buyers and sellers. So no, ANSI in these areas will not cause anything to be more consistent or transparent, in fact this is going to confuse the hell out of everyone and make the appraisers look incompetent.
Net/Gross is a valuation concept which is used well beyond the appraisal industry. I suppose we’ll be special retarded cases in this matter too, and defy all known analysis rules regarding net/gross indicators being the most absolutely important measurement indicators of similarity and dissimilarity. Oh because Fannie said that does not matter, throw centuries of mathematical theorems out the window.
Give not one single care about one single entity trying to reform the wheel. Not going to put square tires on my car. A garden level IS NOT A BASEMENT. Perhaps FNMA should finally acknowledge the issue of the problem of appraisal management companies, excessive outsourcing, and do their frigging jobs and utilize the CU system to kick appraisers off approval lists if they can’t do something as simple as…. Drumroll…. Become competent with the LOCAL STANDARDS IN PLACE IN THEIR LOCAL COMMUNITIES.
How is a standard to measuring followed by every appraisers result in inconsistency? If all are measuring with this same standard every house measurement by any appraiser should result in a very consistent total GLA. Are you lead by what real estate agent say? Who cares if the agents dont “adopt” ANSI? Agents are out to sell and will add anything in as “GLA”, list any area as a room (closet-deck-patio) just to make it sound bigger, add in basement size into the GLA and say it has a full basement then in the next sentence say ” large crawl for storage. Thats who you look to for “accurate” info? Prior to this I would see more than 1 sketch of a house with very different total living areas because most dont know how to measure and or dont care. In fact there are many who are so stupid and lazy that will use an assessors sketch, when available, in the report and pretend they took the measurements. These are the ones who need to be weeded out. Why do you protest, you now have to actually do your job?
Chris .. well said. Baggins seems to care more about people who have nothing to do with the appraisal process, then the ones that actually do.
70% of my appraisals are bi levels and levels for one reason and one reason only… The lenders cannot rely on assessor data, therefore they need appraisals and appraisers who can think instead of just using imported data and analytics.
Otherwise you’re just a form filling monkey like so many I reviewed.
We’re back to being form filling monkeys and cheating on sketch duties. Keep reaching. Well at least you’re coming around to the argument that we can’t competently perform appraisals from different states with the same high degree of certainty as in person. Tell me when you’ve actually seen an appraiser pretend to measure like some appraisal theater. That imported data spoken of actually prevents all the shenanigans agents would use. Which is how in areas where we use such tools and respect local municipal guidelines, and qualify the accuracy of then utilize reliable standards and measurements from the assessors office, we’re not against the wall with pervasive levels of wild west anything goes methodology and potentially incompetent or deceptive agency pertaining to accurate size depictions.
So appraisers should stay aware of codes and compliance for everything involved in the process, except the sketch. Permitted additions, unpermitted additions, improper improvement applications that may be subject to tear down orders, all the liability that goes with that, pay attention. You’d better make a note about the water heater strap and alarm systems or whatever. But when it comes to the sketch, local municipal guidelines no longer matter and garden levels magically become basements. Got it.
And remember, the appraisal industry is stand alone. We’re not integrated right alongside MLS systems, realty industry systems, and their thousand other supportive systems, we stand apart and independent from everyone. Nope that’s wrong. There would be no appraisal valuation service industry or gse’s in general if we were not providing supportive services to these other industries ourselves. Hence the NAR objection to ANSI. I’m not sure what planet you guys are on. Here on the planet earth, we coordinate together and attain maximal results by identifying local customs, then following them.
You guys are talking about requiring people to speak chinese when they’re driving through zimbabwe. This is a logical fault. Some ideas read well but in the real world don’t work out in the long run, especially when only the one singular group clings to something nobody else picks up. Like the air conditioned lawn mower, photo below. Boy that must have had them energized and excited back in the day. But you’ve never seen one in person, because it’s cumbersome and the larger lawn mowing industry never adopted such designs. Same as the larger assessor realty and MLS systems through the entire state of Colorado, not having adopted ANSI standards. Newsflash, you’re the guy riding that thing, out there still trying to sell it. People are standing by entertained sort of shaking their heads in amazement you still believe in the product. Good luck you’re going to need it.
In the last 3 weeks I have come across 3 appraisals where the appraiser, 2 reports by one and one report by a different appraiser, used the sketch and GLA form the assessor. So yes they are form filling monkeys. The fact that I saw 3 in this very short time all done within the last month means this is a very big and very common problem. Other reports in the last month included an appraiser who measured out the GLA including areas where the ceiling was a s low as 4 feet in height. I measured the same house and came up 200 square feet different than this “appraiser”. Not only did he incorrectly measure the house he missed the fireplace which was even in one of his pictures, said it was a full basement then showed a different size of the basement than the first floor as well as a different footprint of the first floor for the basement then proceeded to explain it has a crawl space below the family room. The problem is, there ARE a huge number of form filling monkeys pretending to be appraisers and are getting away with it. I would bet all 3 of these appraisers I am talking about are totally against ANSI along with being a professional at what they do.
Well that begs the question, is this an amc appraiser? The overwhelming pressure placed on appraisers by appraisal management companies does result in corner cutting. That exacerbates existing assignment disparities by amc’s where they do not select appraisers by quality criteria but rather merely by the lowest fee. And they never let go of a discounter regardless of long term performance history. The amc simply makes too much money by using them. Because cost savings of reduced price services are not returned to borrowing consumers.
If you’re in a position to see this activity form a verifiable pattern yet continue to allow that appraiser to be on a panel and receive more orders, then either you don’t really disagree with the method or are violating your ethical duties regarding client management and competent services yourself. We are supposed to hold each other to a peer standard.
Which reminds me, the local assessor, he’s a licensed appraiser right? I guess the peer standard no longer applies to him, or to me when I’m dealing with him. So much for that ethical guideline too. ANSI is nothing more than a gimmick in places where this is not adopted by the larger realty and assessment community. Keep on riding it until the wheels fall off if you want. We’re standing by entertained with this rolling disaster.
It should not matter! Pressure is not allowed from Anyone no matter who the “appraiser” is doing “work” for. Now you seem to be making excuses for fake and lazy appraisers. Problem is, as it has been pointed out MANY times here, there are way too many of these fake and or lazy appraisers. You are saying its alright for an AMC to pressure the appraiser and we have to look at “those kind” of appraisers differently? Again I am seeing this push back about ANSI when it is clear those who do not want to do the job right complain when they are required to. If it bothers you so much just become and “appraiser” for the local assessors. It seems you would be very happy rounding measurements and not being held down by “the man”
I agree we have a problem with systemic appraiser deficiency. This is a consequence of systemic training deficiency. I did not field a single question on any three of the PSI exams I took (and aced all of them first try), regarding regulatory guidelines, all the dealt with was valuation theory sort if IRV kind of stuff. All those puppy mills back in the day. I remember the old sales pitch used to be that I could get my hours by setting up to receive orders from a certain appraiser, at a fee split amount, and I would do all work send report to them, they’d sign it, or co sign, etc. It was the original amc model where appraisers churned out new licenses and appraisers would work splits like do all the work and only get a 25% amount or something. It is why they put the three trainee limit in place because appraisers were abusing that process. Thankfully those practices are not common anymore.
You are painting me as one of the appraisers you make accusations regarding. You are presuming I do not put in the work, because I don’t agree with your ANSI methods. That’s too flimsy of an argument, reach for something more substantial that requires less assumption presumption. Only in your mind is such an argument true, I’m frigging awesome at appraisal services, thorough with my reporting and documentation of both the home and the market data.
I do at times toss in an assessors sketch but only to compliment my own manually derived sketch effort. And if there is variance, I talk about it. Especially if there is variance in any form be that the agents reporting, my sketch effort, the assessors sketch, if at any point in that comparative data qualification process there is a variance between the reported size numbers, you’ve got a major problem right then and there which needs examined and reviewed. Which is why it’s absolutely short sighted to voluntarily depart from meaningful existing local standards which provide said redundant data verification and data qualification capability.
The purpose of the sketch is not to come up with some new reporting standard for a home with some standard not custom to the local community. The purpose of the sketch is to verify if the assessors stated size records pertaining to the subject are generally accurate or not. Because that size reporting basis is what agents use to develop cma’s bpo’s, listing prices and offering strategies, and is the basis by which appraisers would then make competent comparable market example selections.
Get on a different page and risk a liability disaster and accidental incompetent reporting. I agree that standardization matters, and it matters a great deal. That’s why if there is already an existing standardized approach in place, it is straight foolishness and incompetency to deviate from that. You are sidestepping the question if these negative less than reliable methods you are observing, in fact, come from amc appraisers or not. Just answer the question.
I’m carrying all of you on my back, because you guys are your own worst enemies with this mandated ansi nonsense. If ANSI is what the local assessors use, then you have to use it. If the local assessors use a different standard, then you have to use that instead. Or else you lose redundant data verification capability which is an essential step in data qualification.
thank you for letting us all know how awesome you are. We can only hope to attain half of your level of expertise and quality. This world and all of the real estate market really owes a lot to you most powerful and all knowing one. EVERYBODY bow down do you not know who this is???!!! A balding man who wears a singlet to cut the lawn with a child strapped to “his” back open to the sun and ultraviolet rays with no skin protection
Chris, I’m on about lawn mowing lately. It’s my new full time passion. So I’ve switched from general meme’s to exclusively only dealing with lawn mowing content, and all of that is random found online. It’s a great euphemism to this industry, as appraisal should be as straight forward as lawn mowing, but due to the special interests pressures within the value industry, has become convoluted and dysfunctional.
Can you imagine if they ran the lawn mower industry like they try to run the appraisal industry? Like we don’t care if that lawn is on slope or not, you can only use this mower and you’re not allowed to be versatile and use anything else. And you can’t request the lawn mowing servicer you want to use, you have to use the lowest bidder lawn mowing company ordered from our lawn mowing management company, whom outsources that task again, and you still pay full fee for that discounted lawn mowing service. Then when the mowing crew comes over they’re not allowed to talk to you about your own lawn.
Lots of people know who I am on these boards. Just not those people whom would buck up to personal attacks because of disagreement. And we’ve all seen how vindictive the amc industry can be, coaster did hack skapinetz accounts, pam crowley did get death threats, other appraisers within the past few months are dealing with similar nightmares all over again. We all observed those long long blacklists do not use lists with associated articles back in the day which lenders knew was illegal and tried to keep secret. It’s an open secret now with tech companies, they can just add you to that list via the tech relay company and nobody on the appraisal side ever knows, the blacklist approach is alive and well, evolved into new less transparent forms via tech integration.
That’s why I use a pen name. It’s not to conceal my identity from you but rather the industry at large. I’m a vocal spokesperson for consumer safety and fair dealings. I’m not all knowing and I learn so much here, as well as freely sharing what I know about valuation services in the hopes of a better future for this flailing valuation services industry.
I do care about my career and other appraisers careers in this industry I’ve resided for 20 years. I care about regular citizens and consumer protection is also one of my passions. I learned a long time ago how rife real estate is with pitfalls and hazards, and how difficult it may be for people to manage. With increasing automation, sometimes the appraiser is the only human being a home borrower sees in person before that day of closing. Which is why it is also essential that only licensed appraisers be presented in front of home borrowers, otherwise they could get run down the rails without any actually effective safeguards. FNMA can’t control the inevitable volume of hucksters participating in the lending and technical services community, that is an impossible expectation so I argue against third party inspectors, increased automation, and outsourced services too.
The market crashed immediately after I upgraded to certified, and I spent the next 5 years doing nothing but default management. It’s great work which builds a lot of skills, once one learns to deal with the fact every defaulted home comes with broken dreams and financial ruin. I like to think my occasional informational relay during conversations with people about what can happen and how even those minor things can lead to structural or economic disasters and such, has helped people along the way.
It’s saddening and interesting, to see what people leave behind. The hardest one I ever dealt with was what I called the broken house heart. All the photos, apologies written on letters posted on the wall, a family disrupted through tragedy, that one was tough. But others were easier to manage, people simply did not pay their bills and got repossessed, hoarders, let pets ruin properties, diy hot tubs right there in the middle of the living room, mold, dangerous electric, surprisingly rather common.
Thankfully the 50 state AG effort to reign in default managers like Ocwen did bring about many industry corrections, and billions in fines. We’re setting up to a similar event right now with these reckless new policies and proposals being thrust upon the valuation industry. Appraisers should seriously consider why the valuation services industry is being guided and formed by everyone except appraisers, and why our requests and objections are consistently ignored. This speaks volumes regarding the actual state of consumer protection.
Now it’s time to reign in the destructive force which is amc’s, avm’s, and their tech company partners from destroying what’s left of this industry right as we have a real chance to finally save it. Without the independent check and balance, there will be no real consumer protection. You can equate these ideals to fighting the man or being paranoid or whatever makes you feel good about it. It’s not over yet, not while I am gripping this cold steel handle of this high powered mower.
I am fueled up and ready to go partner. I do not work for amc’s and I’ll never stop objecting to ANSI. I have made compelling rational and reasonable arguments against ANSI, so counter if you want. Knowing who I am personally is irrelevant, the argument is formed, presented, and validated. Deal with that. ANSI being mandated without the ability to opt out in jurisdictions which do not recognize this standard is a calamity of errors no doubt about it. And it will have many negative consequences which may very well clearly supersede any supposed benefit of larger data system cohesion.
Well said
I do not think it helps to call your fellow appraisers lazy and incompetent. Most if not all of the appraisers I have met are hardworking and doing their best in a very tough environment. just my 2 cents worth..
Ken, these dudes showed up to this blog with consistently patronizing tones and dedicated efforts to spread liberal propaganda and industry supported corporate branding messages. Don’t mistake their participation for anything else.
That kind of junk does not happen in the lawn mowing industry. Without a man on the mower, there can be no lawn. Both the man and the mower must be flexible and have many many working options. Like they don’t mandate everyone use a ride on even if you’re just mowing an inch of lawn. These companies are promoting some pipe dream from their ivory towers, a complete industry wide standardization which only applies to value service, automation, replacement of the human appraiser.
I’ve been saying for a while now, there is no more such thing as residential housing. It’s all commercial, and regular home owners are now expected to compete with tycoons from around the world with billion dollar budgets whom buy residential housing on a wholesale level, often sight unseen. They want to run residential housing like some stock market.
The promotion of mandatory ANSI, hybrid, third party inspectors, reduced appraisal report content, waivers, just all of that, each is suspected to be a component of this larger effort. The appraisers are racist slander is simply another more complex component. These same groups do not apply the same logic to their friendly heads of the industry. This post;
https://appraisersblogs.com/violating-appraisal-independence-through-intimidation-coercion-n-harassment/#comment-34971
I find idiotic that we have to summarize the house so that the underwriters and reviewers are not forced to learn to read the report form
>This whole illogical approach of parsing size out in ways not recognized by the local mls, not recognized by local people, not recognized by the municipal building codes which the assessor prescribes, it’s all hogwash.
Exactly, and well stated.
You cannot adjust for something that nobody else is even measuring. There’s no data.
These four Appraisers Blogs responses are more accurate than most posts I have seen. GXX001 – commit to memory and create your CYA. Effective dispute would never hold up to reasonable scrutiny. This whole concept was about as reasonable as having an appraiser commit to “proper” water heater strapping. “operating condition” of a carbon monoxide alarm, or removing the word “apparent” from whether or not adverse environmental conditions exist. You show me a report reflecting a home with an 18.4″ wall and a total square footage of 2,411 square feet and I’ll show you two intentionally misleading errors.
SO, appraisers now will have to hang their hats on comparables that were 1. Stepped off by an agent. 2. What the owner said. 3. Calculated from an erroneous sketch. Sounds like applying science to an essentially emotional buyer and seller experience !!
My mentors were appraising in the 1940’s were you. Are you among the WOKE where you base an argument on contradictions and absurdness? Most truths have contradictions, many liars won’t include a basis because they fear or are too lazy to allow others thoughts
why would that be, do some areas not have an assessor. So what have you been doing up to now? have you been including 2nd floor areas with a ceiling height of less than 5 feet? have you been including basement sizes? Seems like a lot of people here dont understand that the form has an area for basement separate from the GLA. I dont recall that ever not being that way. IF there are appraisers out there that do these things then I fully understand any mistrust the public may have
Some states, counties, or parishes contract an overall appraisal every three to five years, by an independent appraiser. Some sell their non collectables as investments in a bidding process.
Did the one of the political parties talk about Federalizing the assessing housing or was that just a misconstruction?
Absolutely, totally and Completely AGREE. And now on to adjustments on these comparable! I am sure they will now be consistent! Right???
https://appraisersblogs.com/solving-the-ansi-measuring-dilemma-a-simple-work-around#comment-34587
An effective workable solution.
Work the grid twice, print the first to pdf include in report.
On second round use directions provided to move adjusts, and only change the size of your subject in the interactive 1004.
You can make your subject ansi compliant without fiddling with confusing adjustments.
Because ANSI is counter productive, and represents a departure from otherwise already standardized approaches in many states. We don’t need another standard, it’s unacceptable for FNMA to push this without a voluntary opt out option. We should be following our local community standards and municipal guidelines.
If at any point ansi causes false net gross indicators, because you can make your subject ansi compliant, but are unable to do so with your comps, scrap your method and use mine instead.
I have used the ANSI standard for 18 years and it is an excellent way of standardizing measurements. I have completed many 2000 field review reports and am apalled at lazy appraisers who copy the tax records measurements. We are to be credible in our reports and this is a good step in the right direction. There has been too much variation in SF measurements of properties due to laziness and inconsistent measuring standards. I was an estimator for commercial general contractors and know that incorrect measurements can cost someone a lot of lost money, especially as a contractor.
So how do you adjust for GLA knowing that the comparables have not been measured to the same standard? Say the difference is only 200 sf, at $50 that is still 10 grand and a 200 sf difference or a $50 adjustment are pretty small!
Realtors and home builders developed ANSI standard. Ask a realtor what it is and you will get a blank stare. Fannie allows variance for walkouts. Assessor and realtors in my market consider finished walkouts as gla. Apples to apples.
THere are appraisers out there that rely on realtors for GLA? When a home owner wants to fight tax assessments, do they go complain to the realtors in the area or the assessor? Why would anyone believe a realtor that will use a basement in GLA just to make it sound bigger, include closets, decks and garages in room count. What have you been doing up to this point. There really has been no change. They just want consistent measurements from appraisers that think no wall has ever been anything other than a whole number.
Hi Don. Thank you. Please educate me on the terms; ‘paced off’, and per below Mr Neathery’s statement of ‘stepped off’. Are those the same terms? Never heard that before. Please explain.
Private size records sounds like an insurmountable challenge. In CO we generally have easy access to assessors size and they’re reliable the majority of the time. I’m concerned about ansi in CO because half of all my homes appraised are bi’s or tri’s if in the sf det housing segments.
I think the bi level with full basement (3 total floor levels) is a good example of how ANSI is going to cause more problems than solutions. Am I to report two basement levels and adjust them each with a different basis? (the garden basis matching agla because it is agla per ‘the market’ & ‘common approaches by assessors realtors and buyers’, and then the lower cost typically associated with actual basements.)
In CO suburbia I never bothered with ansi and it’s not very common to see other appraisers using it either. Such an inflexible approach would have every single comp falling outside of bracketing size against my subject, even if they are model matches, since I’d use assessor & MLS data for comps, but would use ansi for subject which would be an entry contrary to assessor and contrary to the mls listing. Even private sketch requests for pre listings would fall outside of FNMA ANSI dictates so even sketches won’t match if those are present which is getting common for agents to upload either a prelist or builder spec floorplan. The FNMA appraisers sketch will never match what could be a total of 4 or even 5 different other data sources; assessor, mls current & previous, pre list sketch, known builder floorplan data.
It is going to confuse everyone and they won’t understand why I’m using such a nonsensical approach, apparently refusing to be on the same page as everyone else. This inflexible rule stinks of incompetency. (see links I posted at top of this conversation thread for the traditional more sensible alleviation work arounds we have enjoyed up to this point in time.)
I read a hundred pages on this just recently, including annoying AF threads. I can see why some support the standard but it just does not make sense from a perspective of seeking to achieve lower risk scores and fewer automatic underwriter tool alerts in areas with prolific multi levels. The common standard for the past 60 or so years has been to report garden partially below as agla space. Multi levels are overwhelmingly common in the 60’s to 2000’s stock in CO.
What is normally an internal EO review alert count as low as 8 or 10 in my Alamode software and lenders review software will jump to like 20+ because I’ll get fire alerts for all comps out of range, excess size differences, failure to bracket size, excess size comparison differences, and depending on how I adjust basement, other excess net/gross adjust alerts. What was a 1 FNMA risk score will become a 3 constantly if not worse. This is such a short sighted dictate from a reviewers and risk management perspective. I guess just memorize this and repeat ad nausea with disclaimers; GXX001.
I’ll have to try and push everything through ‘true’, and if they don’t accept it, will have to include screen prints of my grid prior to ANSI rule meddling and rev requeists. Providing at least a clear illustration I did not intend to submit an apparently incompetent report but was requested to due to these arbitrary inflexible rules on stating subject size. I’ll then shake my head in disbelief when I’m asked for more comps to bracket the agla size.
It would be even worse and actually incompetent if I were to guess at what agla size I should be reporting for comparable selections like another tri or something (trying apples to apples and guessing at ansi compliant sizing for comps without any reliable data source to get there as sketches and per each level size indications are not always public data). A tri can have anywhere from a fifth to over a third on the lower garden level, and some bi’s can be variable too.
There should be an exception for split level homes. Am I about to ‘step off or pace off’ if I start guessing like this, is that what it means? FNMA is acting like it owns the market and can direct everyone else. Selling guide needs to have appropriate flexibility, the hardline approach is the wrong approach.
Real-a-ters measure by walking around the foundation, Close enouph.
Excellent comments, Baggins. Fannie Mae is basically asking appraisers to produce misleading appraisal reports. My question is: where are the Appraisal Organizations?
Thank you ej. A lot of great ideas and points came out of this thread. And then I zingered it by highlighting how the selling guide has conflicting data. The selling guide even says that in some cases the below grade should be reported as agla. I bet the person whom is imposing this ‘mandate’ for reporting strategy is one of those covid believers too. There are a lot of people whom are now propagandized to the point they no longer utilize logic or reason but rather have become accustomed to following commands and barking orders. Enough with the mini dictators, I do what I want and what I think is right. I’ll continue to report in a manner consistent with the local market. What are they going to do put me on FNMA probation? Enough appraisers will be using this code that they’ll have to rescind.
Obviously there is a high probability for a conflict of interest here. Taking bets now if the person issuing this has stake in some hybrid deal or amc companies, or is even aligned with selling us ansi books. It’s another evil plot to make appraisers purchase appraisal related books we do not want and do not need. Where is the cosmic cobra breeding ground guy, he’ll back me up!
“I bet the person whom is imposing this ‘mandate’ for reporting strategy is one of those covid believers too”
Dear Lord Baggins. Just stop it.
Pacing and stepping may cover different issues. When Legg length enters in, individualism prevails, as does individual-independence. Territorialial knowledge could be important and explainable
Thank you. Upon further reflection, tri level with basement is the example, not bi. Sorry.
Actually, in my area, both have below-grade areas that the assessors include as GLA which the Realtor then uses in the MLS record. I have been struggling with this for years now, I am required to record this area as below grade but I am not to correct the MLS record? It might be wrong but I’m an apple to apple guy, when I can clearly see that the record is wrong that area will be removed and noted in the basement section with plenty of comments of how and why.
https://selling-guide.fanniemae.com/Underwriting-Property-Projects/Appraisal-Requirements/Appraisal-Report-Assessment/Improvements/1069008161/What-is-included-in-the-square-footage-calculation-for-gross-living-area.htm
Brian, that’s the updated ridiculous guidance, subject of this thread.
https://singlefamily.fanniemae.com/media/21821/display
Control+F to bring up the keyword search bar tool.
The keyword you’ll want to enter is; consistency
‘For consistency in the sales comparison analysis, the appraiser should compare above-grade areas to above-grade areas and below-grade areas to below-grade areas. The appraiser may need to deviate from this approach if the style of the subject property or any of the comparables does not lend itself to such comparisons. For example, a property built into the side of a hill where the lower level is significantly out of ground, the interior finish is equal throughout the house, and the flow and function of the layout is accepted by the local market, may require the gross living area to include both levels. However, in such instances, the appraiser must be consistent throughout the appraisal in his or her analysis and explain the reason for the deviation, clearly describing the comparisons that were made.’
I would highlight the conflict of guidance suggestions here as well. ‘The appraiser must be consistent’, which means if you have two bi levels, one is reported half agla half bas, the other is reported all agla no bas, but they are the same model same total size of home, you must make a call and adjust data to report them and adjust them in a consistent manner. Then you turn to larger market area research for similar housing and you observe which reporting method is most common, also double checking with assessor direct to see if agents have altered reporting strategies in MLS. The end goal is consistent reporting across the board and not getting nutty by reporting two identical homes in a dissimilar manner. Your primary ‘requirement’ is ‘credible reporting results’, which is absolutely prioritized above arbitrary compliance with some data which may be conflicting and lead to ‘misleading reporting.’ Consistency, consistency, consistency.
Builders lead the way as they initially build and then report sizing information to the county departments which after permit compliance & build inspection compliance, then report the size to the assessors. The assessor or the building code department or one of them will dictate how the builders should be reporting size to them. It’s normally a logical point but also detailed zoning coding guidelines which are county specific and vary county from county may dictate certain minimum height or depth requirements to qualify garden level vs basement. In the real world most garden level is half half up/down and nobody arbitrarily calls that a basement because it is well understood a basement must be nearly completely below ground but usually peeks a foot or two up for a small bas window or room for window well. Being a few feet dug in does not make it a basement, give me a break.
Don’t get too caught up in trying to do something differently or comply with every bureaucratic rule, and no, you would not ask MLS to correct their size records if the record is taken directly from the assessors database which size usually is reported that way, they just copy the size figures. Every time I’ve observed sizing variance in MLS vs assessor, it’s always trouble. I am not inviting that into my reports which I am liable for. Just took some classes too; remember appraisers can be subjected to civil and criminal penalties. Good luck explaining in civil court why a completely different sizing standard was applied to your subject which was not applied to your comps, it’s an open invitation for getting sued if people disagree with your value opinion. Target on the back argument.
The ansi rule applies to the appraisers reporting on subject but would not be applicable to all the comps who’s assessor reported sizes did not utilize ansi standards? Especially with tri levels, are we to guess at the lower third level size amount we should be removing and reporting in another line for our tri level comps? We may have that measurement for subject but would not for comps. And we’re not going to ‘step off’ that sizing guess of comps. This is why we’ll have to get used to using the exception code. GXX001.
Apples to apples makes sense to us but is too generalized of a description of the problem to be a defensible argument. If you get a client whom throws a fit about the use of the exception code, direct them to this specific selling guide language. Actually, may be a good start to the prewritten explanation about why the code is being used, refer them back to their own selling guide. Typical bureaucracy, one hand does not know what the other one is doing. We’re from the government and we are here to help.
Paced or stepped off are colloquialism’s counting’s rafter ends also worked or estimating the setbacks from the plot plan.
In the more popular States, we had National builders and published architects who advertised their products. On your lot builders advertised package deals including options. local builders worked with local agents who represented all and told all. National, and regional builders began spreading in the 1950’s and their plans were copied and advertised by local Realtors. The MLS began stabilizing using order and organization from the 1940 and forward, by the 1970s these MLSs began merging And then!
Read the Newspaper, make friends among the industry
Called the county Assessor and asked if they used the ANSI standard when measuring homes. The reply was, never heard of it.
Our county assessor in Placer County, CA came from the Personal Property space. Probly not familiar with ANSI or measuring buildings, either !
In terms of a drive-by, I don’t believe that you have to measure the subject and that’s why it is called a drive-by. If the lender wants a measurement, then the lender should order a full appraisal. In addition, I don’t also believe that a home owner will allow you the appraiser to measure the home which is used as a comparable because the home owner doesn’t know who you are and at the same time does not want to put the family’s safety in jeopardy. I will not allow a total stranger to come and walk around my home in order to satisfy the ANSI rule.
If enough of us do not adhere to this it will crash their systems and we’ll see how fast this is retracted. I will be moving forward with the standard that has provided my reports with credible results for the past 15 years.
Just did a little research and found out hybrid appraisals (I do not do these) are being completed using ANSI measurement standard. Hmmm I wonder why Fannie Mae is making this a requirement?
Use price as a method of comparison, it is a common item and frequently arrangeable as a, MEAN MEDIAN, or MODE. There can be many ways that price can vary, some even suggested by the lenders.
The ANSI. rule is too awkward for we sophisticates.
One time a manager served me but good for having used price basis for research. You want to stay away from that if possible. Although proof is possibly in the price, it’s still important to utilize other investigative methods to come about comprehensive data which brings good price alignment. You’ve got to back into it because price does not always equal value. Damn, 20 years of saying that…
How broad is the statement ” most probable value in dollars, and or estimate of value? I believe that the form asks for a summarization for the arrival of VALUE. Does the price offered have any influence on your conclusion or should you round out, up, or down? AND what else can you round?
Remember the VA used to ask for any “evidence of discounting”.
Koma you know the funny thing about that… All these tech companies and amc’s pushing hybrids copy static language, similar to how they all copied scope of work and engagement guidelines. They may state they’re using such a process as ANSI. Then they’ll just turn around and import the readily available assessor and MLS data, which of course, may not be ANSI compliant. It’s all automated data mapping to form fields for maximized efficiency. Ask them questions about regulatory structure or the details of what their disclosure language actually means and they will be unable to explain it. I used to really have a good time catching these companies and people tripping up on their own generic approaches. Then I got tired of educating a constantly rotating staff of telecom workers and abandoned amc work completely. Cheers.
Hey Baggins, Just received an email to sign up for an app called CubiCasa. It will measure the subject house to ANSI standards by just using your phone… hahaha Again, none of my area assessors/mls use that standard of measurement.
NFM lending sent out a recent email, direct assignment on valuetrac. Not sure if they have always been direct but have at least called more more appraisers and a new sign up link recently. FYI. There is an escape from the amc madness.
CubiCasa; THIRTYFIVE DOLLARS PER SKETCH!!!??? Headquarters in Finland. Written by their marketing experts from a world away. Sorry dudes from Finland, I’ll keep my 10 dollar 100 ft tape measure I bought 20 years ago and you guys can keep your tech and reindeers or whatever. Globalism is a disaster, as the whole world moves to exploit our industries. Create a program once, charge $35 dollars to perpetuity and infinity with a rising cost basis as the inevitable software update is needed. I wish every tech developer on the planet would take a very very long vacation and like learn to make quilts or do pottery or something instead, things we could actually benefit from and use without contributing to more environmental pollution and ewaste. Special prediction, you’ll have to always pay more whenever you upgrade your phone. For those not in the know, you can sub all of that with various freeware or just print out a grid page which is a free form on alamode and use a pencil. It’s all marketing hype. Did you know that investors are standing by willing to pay cash for your house tomorrow, no appraisal necessary?
https://www.cubi.casa/your-mobile-phone-is-the-new-disto-for-home-appraisals/
`Years past I did a lot of hard money second loans. The hard money lenders used strategies to insure against loss. Encouraging the borrower to falsify financial info and NOT be allowed a bankruptcy worked.
Who was the crook, It didn’t matter how an assessor appraiser, or Realtor measured the house, the lender was protected?
Hello, I’ve been appraising for 22 years. I have worked directly at Fannie, Freddie and HUD. I have help create policies, and the HUD 4000.1. One thing I have learned in all this time is these originations have got to stop trying to shift the blame to appraisers. Some Genuis at Fannie thinks by invoking Square Footage-Method for Calculating: ANSI® Z765-2021, that every appraiser is going to NOW measure the same house at the same GLA. (WRONG) not going to happen!! Instead of trying to change the appraisers, why don’t you impose stricter mandates on builders. YES, they have the blueprints, make it mandatory that this information is listed in County records with a copy of the sketch. Then the appraiser uses this. (Duh) If not; here is what’s going to happen. WWIII, Yup Between Sales agents, appraisers, and lenders alike. Sales agents ARE NOT going to use this new standard when listing a home, neither are builders, and therefore they are going to miss price the home by comparing them to larger homes, especially Cape Cods. Then, when an appraiser comes in and does use the new standard and pulls comps that are much smaller than everyone else was thinking, and the value is much lower (explosion)*** So for all you brainy acts Remember A modo we had in the Army (KISS) Keep it Simple Stupid. If an area of a home that is above grade is livable and heated it’s GLA. Even if the ceiling height is less than 5 feet. It’s cost money to insulate, run plumbing, electrical, drywall etc. It still cost money to put a roof over this area, a child’s bed or dresser will still go against that wall. There may still be hardwood flooring wall to wall or expensive carpet etc. Whoever came up with this has no idea of what they are starting. I review appraisals now for that past 8 years, and I have while at Fanni & HUD. The different things I’ve seen will shock you, NOW you want to ask some 75,000 appraisers across the nation to add heated are with ceiling heights of less than 5 feet to make it an extra line item on the sales grid. And who’s to say how much on this adjustment??? Another saying we had in the Army; This is going to be a Charlie Foxtrot!!!
I couldn’t agree more! The longer I am in this business the less I know, very frustrating. After 20+ years I wish that someone would show me a matched pair let alone enough matched pairs to support any adjustments. And now I am to further complicate the process, on a positive note, it might bring to light the fact that we have been making unsupported adjustments on data that can’t be proven as factual for many years.
Oh no! Don’t say that. LOL. You know the support lies within the adjusted value indicators and their alignment with each other. Follow the rules of bracketing and you can’t miss, even in complex scenarios. If one just takes the time for very careful logical comparable selection, everything you need to support adjustments lies within the relationship of those few market examples. Everything you need to successfully defend the value conclusions and determine reasonable adjustments lies in the competency of comps selection and the adjustment grid itself. ‘Narrowly aligned adjusted value indicators’. What more proof do you need?
It’s all old hat and the stupid things the non appraisers keep doing is the only excitement left. You will be required to use this standard! That is somebody begging to be ignored and become instantly irrelevant. There is no quicker path to losing support than to bark out mandates to everyone in sight and tell people they no longer have personal choice options. I do what I want.
Hummm think I’ll plan my retirement party in April of 2022.
I am IN control of WHAT i DO. I am NOT in control of the “comparable sales” I USE!
May as well IN this pool of ____….ADD the following: HYBRID / BI’ Forms: IF I am PART B, the signer of the Report (following 5 years of liability) HOW am I to KNOW, the PART A was measured at all MUCH less by using ANSI ?? IS this the best THEY could come UP with ??? JUST like back-when EVERY Appraiser needed a CRIM-check! Or when DISTANCE GEO’ was THE BIG deal, so your client would NOT send you an assignment >10 miles from your business address BUT you resided ____ miles away. THAT was a really stupid one… like I only know market w/n 10 miles. LOL! WHO are these Idiots?
Article that asks questions and gives some solutions…..but not quite.
https://appraiserelearning.com/fannie-maes-big-christmas-surprise-ansi-required-in-2022/
So by one of his examples. do you make two adjustments for sq ft since you can’t extract out the attic sq ft in the comp?
Subject Comp
GLA 1000sf 1500sf -$10,000
Feature 500sf 0sf +$10,000
Do you comment that staircases in a two story home in this market is typically 80 to 120 sq ft. Then state you are using an extraordinary assumption that the comp has 100 less sq ft than what is stated. Then state “in order to meet ANSI the appraiser is subtracting the stairway sq ft from the comp in the grid”?
Got this email today but haven’t listened to it yet.
https://appraiserelearning.com/the-appraisal-update-podcast/?goal=0_ea97ed434d-9cef02a541-15568401&mc_cid=9cef02a541&mc_eid=4996d3394d
Maybe all of us appraisers should retire and let the Genius that are coming up with the new crap (square foot method) etc. let them leave their comfy desk and go out into the field and actually do the work. Let them take countless hours of CE, pay the ridiculous MLS, E&O and appraisal software fees. Let them be responsible for the report for the next 5 years. And then maybe, JUST MAYBE they will screw their heads on straight. Can I get an Amend?
Martin, I think that’s their main purpose. Get everyone to use the same method then their systems will have enough information to cut us out. Would love to see the catastrophe if/when that takes place.
On another note, just joined with another local lender that keeps their loans in house. They do not even require UAD. Sweeet! Retirement can’t come soon enough.
Please refer to the Fannie Mae ‘standardized property measuring guidelines document’. I have this printed next to my computer. ‘Is there an exception to the process? If the appraiser is unable to adhere to the ANSI Standard, the appraiser will provide the code GXX001 in the Additional Features field on the appraisal form and must explain why compliance was not possible. ‘ A few months from now most appraisers will have memorized this numerical sequence, get used to typing it in; GXX001.
So for split levels, Fannie will get less property information rather than more as we’ll have to occupy this limited 2 line data entry field with static opt out language and referral to yet another disclosure disclaimer pre written field entry which we’ll either have to place on pg 3 or addenda. That’s too bad because that field is commonly understood by people whom actually understand appraisal reporting, to be reserved for a summary line of the subject homes features and amenity.
Some lenders will push back because in order to keep FNMA CU systems risk scores low, they do constantly seek fewer underwriting exceptions as a rule of thumb. Day 1 systems are likely to alert every time appraisers seek to push this exception through. It will be the appraisers responsibility to comply with uspap and not provide a misleading report. This will simply have to be something lenders get used to because appraisers are not allowed to push misleading reports under our regulatory structure. Remember as Mr Towne said; ‘uspap only applies to appraisers’. It is our professional licensing responsibility to adhere to ethical standards and must either alter scope of work or decline the assignment if we are instructed to provide misleading reporting content. Forming an illusionary fictitious agla number which omits assessor reporting, ignores realty agent reporting, and may change both adjustment and cost approach basis figures for the omitted ‘below grade’ area in question certainly seems to qualify as a misleading conveyance of real property data.
Also remember that the scope of work is not dictated by a client (in this case; lenders ordering FNMA appraisal products on FNMA forms under FNMA selling guide guidelines). The scope of work is a mutual engagement which it is the appraisers ethical responsibility to form in an acceptable manner before accepting engagement and eventually completing the assignment. The appraiser can not claim any liability protection or regulatory exception by claiming the client dictated they provide misleading reporting content. Quite the opposite in fact.
The tech workers riddled in every ancillary sector throughout the appraisal industry do not understand these concepts. They labor to increase efficiency and profitability of the process for their uses and their intentions, enjoying the absence of any individual licensing or personally applied regulatory requirements, as tech systems development is not a very well regulated industry. It’s a free for all and many just try to impose what they want upon appraisers, while simultaneously not being qualified to work with appraisers in the first place.
Protecting the public trust is not a priority for the myriad of companies seeking to profit from licensed appraisers efforts. Regulated appraisers provide a check and balance. It is our responsibility to slow these companies down or choose not to utilize their products or methods if they direct us towards operational or development methods which may diminish the reliability of our appraisal work products. They seek whatever they are seeking. We seek ethical compliance. A clearly defined scope of work is the bridge which allows us to work together.
This is yet another example of why these decisions should not be left in the hands of tech people or non-licensed managers. Another example of why failing to hire enough licensed appraisers on the management side results in poor outcomes. A consequence of the ongoing abuse of the appraisal industry as we are exploited by tech companies and unnecessary third party injection on all sides.
Lenders whom have failed to hire qualified actively licensed appraisers will be left at a disadvantage as they bungle the process and errantly presume they can force the appraisers acceptance of a scope of work which ultimately results in misleading reporting content. Much time and effort will be wasted, clients may be lost, increased appraiser liability will be the result for appraisers whom fail to utilize this exception and demand the lender client accept the ‘exception to the ansi measuring requirement’. Sorry FNMA, after some reflection, I have formed the opinion that in many situations adhering to this guideline may result in misleading report content and could expose me to professional liability. GXX001.
Feel free to form some pre written disclaimer content and post here for others to use. It will be like the intended user debacle and eventually FNMA may issue ‘acceptable language’ or just rescind the demand entirely once they realize such a voluminous portion of reports are utilizing this exception code.
Don’t go whistling past the graveyard as you throw in the towel just yet, just memorize the exception and get used to using it. Form defensible arguments and language why you must insist and will not be able to continue engagement if they reject this alteration to the scope of work regarding ANSI compliance. Some appraisers will have to use this, others will not, it will depend on the nature of housing and assessors policies in your area. As noted in above commentary from all the blog participators, you have all the talking points needed; Assessor does not use it, agents do not use it, comps alignment issues, valuation analysis basis changes, fictitious data, misleading reporting, etc, etc. Thank you for reading the Appraisers Blogs.
ANSI Z765 can be downloaded for $25. https://www.homeinnovation.com/z765.
QUESTION: Where is the FREE version & WHY do we have to PAY?
The ONLY updates are member & copywrite edits. Source: psa@ansi.org January 6, 2022.
https://www.homeinnovation.com/z765
Thanks JD. Have fun reading through that, wow.
https://www.homeinnovation.com/-/media/Files/Standards_Development/Square_Footage/2020_Z765/ANSI-Z765-Update-Public-Comments-Report-PCR.pdf
Disapprove, disapprove, disapprove. Appraisers objections were considered and summarily ignored.
It’s just like uspap with drafts, rewrites, open comment periods, committees. They’ll constantly update it and we’ll need to buy more books. It’s going to wreck havock on FNMA CU database modeling and automatic review tools. But that’s not why they’re imposing this…
https://image9.zibster.com/8658/20200716112906_315618.pdf
https://www.homeinnovation.com/about/news_and_events/home_innovation_news?p=1&
Vertical integration. It’s not what you know. It’s who you know.
https://www.homeinnovation.com/about/news_and_events/home_innovation_news/2021_0501_consensus-committee-approves-latest-version-of-ansi-square-footage-standard
I used to use ANSI standard, about 30 years ago. That was back when we had measuring tapes. I discovered that rounding to the nearest 1/2 foot was just as accurate. The measuring tape cannot measure to the nearest .1 foot, because it bends, even more so on 50 foot plus walls.
But now they say “Now you gots dem lazers”
LOL, I hate to break it to you, but lasers are not more accurate. I measure each wall twice, and rarely come up with the same length both times. Since I round to the nearest 1/2 foot, it didn’t concern me. Now I got to measure maybe 3 or more times, and hopefully they are with .1 foot of each other
The angle you’re holding the laser at matters, too.
And sometimes you have no decent line-of-sight directly to the opposite wall, this is especially true when doing outside measurements.
Hmmm….interesting comments. After 39 years in the profession, it still amazes me how little control appraisers have over their own profession. We have non-appraisers telling us how to do our appraisals. Meanwhile, our profession continues to be fragmented from within. Ol well, like other professions, at least technology has made a significant impact.
You are spot on about our industry. I have been a residential appraiser for over 35 years, and it always amazed me how no one in this industry stands shoulder to shoulder and says, “we are mad as hell and not going to take it anymore”. Instead, many act as though other appraisers are the enemy and willing to cut their throat in a heartbeat. Unless this attitude changes, we are doomed for extinction.
Well now is the time. I am pushing hard on finding more local lenders. Two that I have keep their loans in house and one doesn’t even require UAD. If my other clients inform me their jobs are for Fannie I’ll decline. They’ll keep sending, then asking, then pleading and I will say no. It’s good to cover a rural area where appraisers from neighboring counties will not venture into.
Now I saw the exception, but why waste my time adding more information with Fannie keeping an “eye” on me. Hopefully enough of us will use the exception or even stop as to cause enough chaos. I dropped the ones requiring a yearly background check and survived, I’ll survive this bs too.
In house lenders are like white whales. If you find them they often also make borrowers sign a caveat they may sell to recapitalize mortgage lending funding if necessary, although they’re likely to retain servicing oversight. Don’t get too excited about the perceived protections of that particular working avenue. GSE work is a mess but also provides the benefit of scale and the largest body of borrowing consumers. In house lenders could get wiped out with a price slide and might be in house because they’re sanctioned from certain packaging and reselling opportunities or create generally higher risk like hard money or bridge loan types. Be careful.
You know what’s really funny about this new ANSI square foot method. Two things. 1 All during Covid Fannie, Freddie, HUD, VA were all accepting drives-bys, or desk-tops. No one cared??? Even as of today, Fannie/Freddie still accept Hybrid appraisal where Non-Licensed appraisers are allowed to make the site visit, including measuring. Now tell me who full of S##T????????????????????????????? NUMBER 2, We are all still going to use comps where the GLA does not or did not a hear to this new standard. So, what more important, the size of the subject or the comps that we use to value it by ?????????
When I refinanced earlier this year, chose the no appraisal option (as my otherwise really great CU regrettably uses an amc), they stated ‘avm alternative option’, but then ordered a hybrid value report which was completed by a realty agent. Public records and realist data, just basically an integrated copied avm value, with bpo like drive by photo service, relayed through an amc of course. Sadly, I fed an amc anyways even though I tried not to. MB said you should do these, we order a lot. They seem to miss the point of what an appraisal valuation opinion service is, and what it is not. Ten years into separation from loan production rules and most mortgage bankers have a decreased understanding regarding uspap ethical implications and requirements. Most new appraisers don’t understand the process as intricately either. Separation from loan production still stands as a regulatory gift and windfall to amc’s. And according to the volume of helpful suggestions from appraisers outright disregarded by Home Innovation (formerly a national builder advocate, now vertically integrated with fnma & the green product sales movement), it would seem that Home Innovation really does not care what appraisers have to say either. Did FNMA people even read this document before pushing this new mandatory measurement requirement? Probably not.
Seriously, take a minute to read through this. Pay attention to the committee roster, objection comments, and volume of denials.
https://www.homeinnovation.com/-/media/Files/Standards_Development/Square_Footage/2020_Z765/ANSI-Z765-Update-Public-Comments-Report-PCR.pdf
To your point, this is not about measurements, it is about the continued attempt of dismantling of the appraisal industry. The lending industry has been trying for years to get rid of their only stumbling block to complete control and what better way then to disguise it as a NEW requirement hoping appraisers will boycott so steps can be put in place to circumvent the appraisal. Appraisers need to unit and start a class action lawsuit with an injunction put in place to postpone so this can potentially can be reversed by the court. Any takers to head this up?
ANASI? Sounds racist!
So bad…. It was actually good. Thanks.
Meet your future competition.
https://mailchi.mp/be58f75dd7ad/december-trainee-update-13553180?
I’ve been in finance my whole career. Been in appraising for 20 years. This is just another incompetent decision by people who BELIEVE they understand the minds of buyers and their motivations. There is not one person who voted this in that understands my motivations as a buyer. YES…there is not one person who made this a regulation that understands my motivation as a buyer. Measuring a home is so common sense it is ridiculous. And to think someone might be off 5-10%…..God forbid. Interesting. We are required to include three comparables in each appraisal. I usually include 4-5. We do that for a reason. Not only to bring the sales within range of a reasonable value, but also to understand that GOOD appraisers already know he value before they complete. Its called knowing the market. And sadly….none of the people who made this decision knows my market. Any comments??
This is the definition of ANSI…Another Neurotic Standard created by Idiots. Once again another standard to strangle the industry and cost more to the consumers. Wake the hell up people. Does anyone think for ONE SECOND that minimal GLA differences have to do with the motivation of someone wanting a home? And here is the bolded statement above …….We welcome critical posts & opposing points of view. We value robust & civil discourse. You may openly disagree, but state your case in an atmosphere of mutual respect, in which everyone has a right to a particular view about the topic of conversation. Please keep remarks about the topic at hand, & PLEASE avoid personal attacks. If the poster gets you upset, it is the Internet, you can walk away from it.
According to the statement above…..PLEASE avoid personal attacks. Hate to say it, but the new regulations are a personal attack on consumers because you see by comments you are costing more to consumers. Apparently, common sense is gone in our industry. I had a great run…but people in my own industry dumbed down, and have no clue why they did it. GLA??? Are kidding me??
https://appraisersblogs.com/ansi-measuring-standard-required-by-fannie-mae-in-2022/#comment-32975
Don’t miss the details on the volume of appraisers whom were part of the ansi work group but had their opinions and suggestions dismissed. The appraiser communities (or at least a small sampling of that), had their opinions ‘recognized’ and summarily ignored.
Take the gloves off, let them have a piece of your mind. This is what happens when we allow special interests to control everyone else through the power of proprietary government connections. This ansi thing is yet another in a long line of reasons why government should get out of the business of subsidizing lending and insurance. Lenders would never go for this if it was 100% of their money on the line.
I’m disappointed that the AGA has not strongly condemned ANSI. And the special interest profiteers like Bryan Reynolds.
Issue: Adoption of ANSI Z765-2021 by appraisers
Benefits: None
Detriments:
1. Appraiser is no longer on a level playing field with public & revaluation company reported gla for comparables
2. Dwellings not meeting ceiling height will, in all probability, require large gla adjustments in the appropriate area resulting inherent issues and questions for not appearing comparable. Especially true of identical or near identical dwellings.
3. Confusion with underwriters, and borrowers resulting in extensive time consuming responses to lenders and management companies.
4. Extensive use of extraordinary assumptions will be required for the comparables. (In other words, “guesstimates” as the requirements do not rise to the threshold of extraordinary assumptions).
5. Misreporting and different reporting of comparable gla from different appraisers as the result of the “guesstimating” requirement. As noted, the new requirement do not rise to the level of an “extraordinary assumption” however the appraiser is being led to believe that it does (fairly loose use of the intended use).
6. Appraiser is to alter, at his or her own peril, gla reported by public records for comparables. It is made clear this decision is at the liability of the appraiser.
7. No direction on the existence of suspended ceiling height vs. actual ceiling height. Just one in a plethora of examples.
8. Serves no good purpose to anyone including the borrower, lender, appraisal management company or appraiser
9. Will result in contested and angry borrowers and lenders. Especially with the use of “guesstimates”,
10. Comparable gla becomes argumentative and personal in opinion with no real bases of reference. I wonder how this will work when a national data site is used for checking data and comparable gla, for a particular property, is reported 10 different ways by 10 different appraisers?
At least the current process has some bases that allows all properties, subject and comparables, to be on a level playing field. While it is not a perfect system it does allow the idiom of apples to apples and not apples to oranges.
In any scenario, one must ask themselves, “will anything good come out of this”. In my opinion the answer to that is “no”. If the answer is “no” then why pursue it? I see this just being a total debacle that will need to change at some time in the future. It seems this change is likely being brought about by bureaucrats justifying their existence and force feeding everyone this is in their (you and me) best interest. It is totally irrational and has no positive outcome, only negative. So, for the sins of a few the masses will now suffer and, the suffrage is not limited to the appraiser; the entire industry will suffer the debris left in its wake. The initial proposed change should have been “highly” publicized and presented to the masses of people in the lending industry who work in the field and understand the difficulties they face every day. I myself, was not aware this change was being proposed. This whole idea presents significantly more liability exposure to the appraiser given they have made it clear the appraiser is responsible to make his or her best judgement in arriving a comparable gla, really? This, in itself, is alarming if not in direct violation of USPAP reporting requirements. And speaking of USPAP why have they not commented on just how the appraiser is going to comply with these new FNMA requirements and not be in violation of USPAP? It smacks of all kinds of USPAP violations sooooo, how can an appraiser perform his or her job in a manner consistent with USPAP and still meet the new FNMA requirements? They can’t, simple as that. This seems to me to be ripe for discussion.
Of course, the bureaucrats, who arrived at this new concept, will argue it is about people not liking change however, nothing could be further from the truth. It is about the appraiser being able to conduct his or her business in compliance with USPAP on a level playing field and not relying on “guestimates” (at best) in arriving at a value estimate. If the respective towns and revaluation companies are not required to change how they calculate gla (something FNMA does not have the power to do) it is doomed to failure. I can see this whole ridiculous requirement resulting in increased lawsuits, reprimands from licensing boards, increased insurance costs and an overall collapse of the appraisal industry…. perhaps this is the end game here?
Unless the way the towns and revaluation companies change the way they measure their properties to meet the new FNMA appraiser requirement, I see this being of no positive benefit what-so-ever to anyone. It is akin to saying all prior appraisals are null, void, unreliable and should be disregarded and, that my friends, is pure nonsense. Holding the appraiser accountable to meet an entirely different industry standard is ridiculous. ANSI serves a purpose for an entirely different industry and is being reinterpreted to apply to the appraisal process. For that matter why not incorporate all of ANSI into the appraiser requirements? Did I just suggest that?
In closing, “if it ain’t broke, don’t fix it” is probably the best closing statement to make. Me, like most of you, never knew there was a problem with relying on relevant, reliable data sources for comparables that, according to FNMA are no longer reliable. Shame on them.
PJTMC, although you eluded to this at the end of your well written post, you forgot one thing; To force appraisers to buy constantly changed and constantly updating ansi books they neither need nor want.
Seriously, take a minute to look at the ‘committee’ action links I posted. Have fun reading those and marvel at the obvious special interest influence whom basically ignored like 14 out of 15 appraiser committee helper objections. They had their mind made up ahead of time, the token action of getting professional objective opinion did not yield the results they sought, so they ignored the professionals and all their helpful objections and suggestions.
It’s much like what has been happening with covid, censor and/or ignore everyone whom has legitimate reason to disagree. Conflict of interest has become the norm rather than the exception with just about everything having to do with governments lately. Hamps book on measurement theory is better, easier to understand, and we’d only have to buy the book once or I think it’s even free to review online. Shake a stick at that. You know what they say, if you don’t really understand the issue, you may have to reconsider your answer and opinions later. Those green building idiots are just trying to sell more product and want to corner the market with a unique production and unique measurement of production they know damned well other builders and various city authorities don’t follow. They’ve got a mainline into FNMA lending and even get special reduced mortgage rates and reduced processing fees for mortgage loans pertaining to their green certified housing products. Clear as day conflict of interest, that group should be separated from a variety of checks and balances to their growing power, the sketch methodology just being one example.
You can’t negotiate with people whom say what’s mine is mine and what is yours is negotiable.
Lot of good points being made however that and 10 cents will get you a cup of coffee and that is what is ecpected; the appraisers will lay down and take it. Appraisers need to organize, hire a class action Attorney, get an injunction and sue to reverse this decision. There is ample information to prove why it will not work and is a detrement to the general public. Like my coach used to say, “talk is cheap, it takes money to buy beer”. Talk is meaningless unless we take action. Anyone on board?
.
I think suing them would be a tough row to hoe, but given that this is tantamount to widespread mortgage fraud, it may be the only solid legal option. Otherwise, I’m already submitting every report with the exception code and explanation in my reports.
Great idea Jesse, get ahead of it. I’m going to wait to the day myself.
If there is to be any class action by appraisers, my vote is to look at the continued violations of Dodd Frank RegZ on Appraiser Independence, specifically the C&R fee rule and the disregard of the original spirit of that law which would have seen amc’s wiped out overnight or suffer $10k/$20k recurring daily fined for every dang time they got away with what’s your fee and turn time nonsense which drove the appraisers fee down below what the consumer was actually charged for the appraisal service. If anyone would take this proposal seriously it could be the largest class action lawsuit in American history, could really rid us of the amc debacles which continue to perpetuate industry unraveling. Companies like Appraisal Scope, Appraisal Port, Mercury, and the big amc players whom run their own email systems could have records subpoena for discovery and it would be so easy to prove. How many damned emails does it take to place single orders? We want to know how many emails they are allowing to be sent and how much cumulative time they waste for appraisers. Wasn’t there an amc involved with this ansi deal too? The amc’s continued undue influence saying they represent the appraisal industry at large is a fabrication, an outright lie. The majority of appraisers out there refuse amc services outright. And we might just get a dollar or two in the process downstream of all the lawyers but at a minimum we could all return to gse lending without much ado, get full fees without middle men, have more access to more working opportunity, train and hire new people, just like the good old days before all the carpetbagger amc’s sprouted up like duck dynasty chia pets.
An injunction to stop FNMA dictates? That’s novel and sure, why not. I guess everyone rally around AGA? ASB ain’t going to do a damned thing, they support forced book purchases, they don’t object to that. The problem with lawyers is someone has to pay for their services and the lawyers must prove harm. Which means successful lawsuits will come after the fact. When enough appraisers use the exception code or refuse service if the code is not accepted, they’ll rescind the order. It’s obviously a short sighted move, what was the point of developing the CU database if they would turn around and ruin the integrity of half of their sizing data. The people pushing this and promoting this are just in one branch, while other gse decision makers are in another. Eventually they will sort it out but in typical bureaucratic fashion, create two new problems for every one they seek to solve (Mises). Want to make a real difference? Wind down the gse’s completely. Government has no business using tax dollars to fund mortgage lending or insurance, it just leads to massive mal investment and gross reductions in actually successful lender risk management policy The fed remains addicted to unlimited spending and unlimited printing, mortgage backed securities are moving towards being an empty bag again. We’ll see what happens this year if they dare to raise the rates, refuse to stop printing money, or both. They can’t bury QE in housing forever and it’s about to bust out. Inflation proves it.
I THINK ITS TIME FOR APPRAISERS ACROSS THE COUNTRY TO TAKE A STAND. IN THE FAMOUS WORDS OF NACY REAGAN “JUST SAY NO” USE THE EXCEPTION CODE EVERY TIME. I SEE LENDERS ALREADY SAYING THAT THEY ARE NOT GOING TO AHEAR TO THIS IN THEIR ENGAGEMENT LETTERS. HELL, NO ANSI Z765-2021 MUST GO!!!!
Your ENGAGEMENT Letter is your agreement with your customer for the amount of work proposed. Carefully word your contract and charge enough. IFF you’re working for someone else, that a different story or CONTRACT.
It simply amazes me that not one so-called Appraisal Organization has not come out and condemned this latest attack on appraisers.
Add the Appraisal Foundation and the appraiser not being able to be compliant and NAR who will be directly affected no doubt not to mention many appraisers are members. Write your State Attorney and let them know this may impact tax revenue and is not in the best interest of the consumer.
The only change for me will be how I handle upper levels with sloped ceilings. I generally use my judgement as to how functional the room is. Some have built-ins and such below the 5′ mark.
All else is pretty much how I’ve been measuring for 38 years.
Is the ceiling 12′ high in the closet, or 5′ in the upstairs bedroom?
First and foremost, “location, location, location” is the mantra of Realtor’s and has been for years. That is a pure and simple, unadulterated “fact”. If the appraiser is being blamed for undervaluing properties based on location, then shouldn’t the Realtors be held equally accountable for the listing prices of the varying market areas they work in (could have something to do with their PAC, ya think?). That is the absurdity of this assault on appraisers; but I suppose, in their minds, the end justifies the means. It appears there is an all-out assault on the appraisal profession at the moment from varying agencies. Now the ASC is making unsubstantiated and inflammatory claims the appraiser is responsible for everything wrong with the Mortgage Industry. It seems, once again, USPAP is irrelevant to individuals who do not work in this industry. It is easy to be an “arm-chair quarterback” when you have a “woke” agenda. “Fly in the face of” best describes this assault on the appraiser and, visa vee, USPAP (laws we are licensed to abide by). Sad to say, USPAP and the hard-working people who oversee our industry are also being assaulted by this very ASC report and treated as irrelevant just to meet their predetermined agenda. “Hmmm, so let’s have the appraiser do unethical things so they can produce perceived ethical appraisals that meet our agenda and then file a law suit when the property gets foreclosed for over-valuation”; yeah, that’s the ticket. This can happen in any market and any value range. So why have appraisers or, for that matter, regulations? I think this is the best interpretation to the ASC report. Let’s be honest, the appraisal industry is not a perfect process and has never claimed to be. Admittedly there is room for improvement however intimidation is not the answer. I don’t think this new ANSI mandate by FNMA is coincidence and seems to be in lock-step with the ASC report. The “ethical” appraiser is the last stronghold in protecting the American consumer from mortgage fraud, abuse and collapse of the economy (or have we forgotten the mortgage crash after the implementation of “B” & “C” paper by Wall Street and unscrupulous secondary market lenders?). Sad to say, this report is not surprising given the environment we now live in. I just hope the powers to be can see through this thinned veiled attempt to “defund” and eliminate anything and everything that stands in their way. I certainly hope that the Appraisal Foundation, National Association of Realtors, Appraisal Institute, Smaller Banks, State Attorney’s and any other relevant legal & mortgage industry participant can see none of what is going on is in the best interest of the consumer and business. They all need to step up and get to the bottom of what is taking place if they want to be relevant in the future. This isn’t just about appraisers, it about the very fabric of the mortgage industry as a whole and stability of our economy. Today, the appraiser, tomorrow….?
Real Estate Values are Local, Local, Local. Intel’s decision to build a “chip” factory is based on; National Politics that State’s economy, Intel’s board directors and CEO
The value of a house near the church, the park, the school district or placed on a prominent lot illustrates local competition, or Market Value. Remember Local, local, local.
The confusion is that a lender is able to sell a local loan to an investor in Warsaw Indiana or Warsaw EU. or Warsaw China? That’s the value of the NOTE or Paper, not the RE
Does anyone have a website I can go to that gives an understanding of the ANSI 2021 regulations in a reasonable common sense summary?? Thanks.
The $25 document is only 16 pages.
Measure from the corners of the building in inches or 1/10 inch.
Stairs to basement count regardless of finish. Finished stairs count for level they descend from. So a finished stair well that is say 10 x 3 from 2nd floor to 3rd unfinished attic level counts a 30sf on 3rd level.
sloped ceiling levels are from 5′ with some portions being measured inside and some accounting for stud dept. They give a drawing to show you what to do.
Below grade is counted as below grade… that’s novel concept.
It’s not that big of a deal. Not sure what everyone is going about with drive-by and all that. If I put a sketch in a 2055 I simply tell them where the measurements come from. I sure didn’t measure it while sitting in my car.
https://www.homeinnovation.com/about/bookstore#Purchase%20Square%20Footage-Method%20for%20Calculating:%20ANSI%20Z765
So, if it is no big deal why make it a requirement? If it’s no big deal then why not make it a requirement for every institution involved to use this method (metric system anyone? Aaah early 1970’s fond memories). The reason everyone is going on about this is because they know in their areas this method is not being used by mostly anyone else (Realtors/Tax Assessors/MLS) and they are cocerned about using information to give credible results.
It’s not used in my area either. At the end of the day the methods are all very similar though.
What I mean is. If they want a required standard for all appraisers. Then pick one and roll with it. It’s no big deal. ANSI, the North Carolina standard, whatever. All are similar and none are difficult to learn.
Many of our MLS listings will say SF per Appraiser. That doesn’t always mean it’s correct. However if after April 1 they listings say Per Appraiser ANSI I will know how it was done and I’ll know it was not taken from some 7 year old appraisal done by a trainee that got it wrong.
All that nonsense from FNMA about measuring and appraiser credibility is fiction in my opinion. Why are they doing this? I think as someone mentioned above they must want data for their AVM’s and Desktop products and I’m sure the programs run better with data that is acquired in a similar manner.
Around here the credibility rating from high to low would be
1. Appraiser
2. Assessor
3. MLS except for new construction which is often fiction | MLS pulls from Assessor most often.
4. Realtor — They rarely measure because they’ve been taught it’s a potential liability so they pass the buck. This can result in going back to 1. and paying an appraiser to measure. Easy money.
5. Homeowner – yep, agents will place listings based on what the homeowner says.
So FNMA, for my market, has it completely wrong with the credibility claim.
Appraisers, here is your chance to tell Fannie and Lyle Radke, along with one of the makers of this disaster Bryan Reynolds that you will not submit to ANSI.
Geez what a bunch of crybaby appraisers I’m reading about, either conform to the regulations or leave the business.
If the options are to commit fraud by using a non-market standard, or leave the industry… I guess some appraisers can go to jail would be option three. GXX001 –
What is wrong with you? You have been instructed on how to properly measure a house for uniform standards across the country, suck it up or leave the business.
6% of the country uses this standard. To use a different standard of measurement for the subject than for comps would be an invitation to fraud.
As an appraiser, you are to view the comparable properties and determine the correct gross living area, as best as you can, and if you think there is an error in the assessor’s reported figures you are supposed to reconcile that in your addendum stating why you have used a different GLA than the assessor. Suck it up or leave the business. You are not committing fraud by reporting the correct GLA of the subject property. What is wrong with you???
So making up a new GLA. No. Using an non-standard measurement system. No. These amount to an act of fraud. And this is why FNMA has provided GXX001 – so, not using ANSI is still adhering to FNMA’s guidance. Good luck explaining on the stand where you got your made up GLAs.
We have been using Ansi for 30 years, you do what you want, but you have been instructed to use the ANSI system, so good luck explaining that to the judge if and when that time ever comes for you. You must be an old dog who cannot learn a new trick.
Ad hominem will get you no where. 5 years in. 94% of the country doesn’t use this “standard.” Good luck
You have been instructed to use a new measuring system, get over it or leave the business.
Is there an exception process?
If the appraiser is unable to adhere to the ANSI Standard, the appraiser will provide the code “GXX001 –” in the Additional Features field on the appraisal form and must explain why compliance was not possible.
For example, berm homes with their entire square footage below grade would be eligible for an exception. The appraiser must provide
justification for an exception, lenders are responsible for confirming the appraiser provided an adequate explanation. Fannie Mae will monitor for inappropriate use of exceptions (i.e., using methods other than the ANSI standard for homes that have typical above grade square footage).
I do not understand why you were making a mountain out of a molehill, the measurement is for basic homes, not for unique homes with unique square footages. Wait till a buyer measures their home or another appraiser and finds out your GLA does not match their GLA and you were making gross living area adjustments, your insurance company will pay out of court and your insurance rates will go sky high because you are an old dog who cannot learn a new trick. Good luck to you sir.
Because making up GLA’s is fraud. Because using an non-credible measurement standard is a USPAP violation. Because using non similar measurement standards can result in 5% differences in GLA and therefore fraud. Because its fraud – which is the justification I’ve put in every report since this non sense came down the pike. If your market uses ANSI, use it. Otherwise, let appraisers be professionals and not monkey’s jumping through hoops.
Per FNMA: GXX001– ANSI is not used by any market assessor and its use would be misleading and result in over/under valuation on a regular basis. As it would result in mortgage fraud to provide a non credible valuation based on non credible methods, the appraiser can not comply with this requirement and employs the FNMA exception.
You might also refer to page 36 in Working RE for more reasons not to use ANSI.
Have you not been instructed to use the ANSi method of measuring ??? What will you do when the Judge asks you why ??? That is if your insurance company lets you get that far. They wont, they will just cut a check….then you are screwed for insurance for being dumb. Cry all you want. You have been instructed to use ANSI. get over it or leave the business old dog.
So, by your logic, the appraiser is to rely on his or her best “guesstimate” and not rely on what was once considered a reasonable, reliable data source when evaluating a comparable gla? The change eliminates, for the most part, anything being a reliable data source when it comes to comparable gla and there is no longer a “level playing field”. So, in some cases, using your logic, 10 different appraisers, using the same comparable, can potentially come up with 10 different “guesstimates” and potentially 10 different value estimates? As you have stated, when an appraiser “determines” (your word) their “guestimate” is “correct” (your word) the Assessor data, that is presumably based on physical measurements, is wrong and make a statement to that effect in the report? I’m sorry but that is preposterous and elitist. If an appraiser has proof his or her calculations have some basis for accuracy other than a “best guess” then your theory may be relevant. What I can agree with, for potential gla differences, is stating the appraiser FNMA required calculations differ from that reported by the Assessor, period. The appraiser, in most cases, has no clue whatsoever if the Assessor is wrong just like they don’t know if their guesstimate is right or wrong. I believe the appraisers are just trying to find common ground so they can do their jobs effectively and with some reasonable confidence the data they are using is accurate defensible and supported by a common, verifiable and reliable data source. It just seems counter intuitive FNMA wants gla accuracy down to the inch for a subject property however throws care to the wind when it comes to a comparable with a “best guess” being acceptable. You don’t sound like and appraiser however all opinions are appreciated and welcome in this debate.
Yes, If assessor data is Obviously wrong, the appraiser is to use his/her best questamete, We in the Northeast have had these skill since our training. I would prefer to replace the comp, but if I have to use it, yes we make statements of what we did in the report. If you are from the west coast, sounds to me you appraisers are just data entry and not have critical thinking skills. You worry about liability about the comps, I would worry about liability from your lenders, investors and the borrowers. Maybe that why “they” let me appraise multi million dollar, unique, ocean fronts, Yadda yadda yadda, properties for the past 30 years.
I cut my teeth in the north east appraising… and ANSI is not industry practice in much of it. ANSI can be credible… but it results in more guessing, which is why it shouldn’t be used in areas where the assessor isn’t using ANSI (ie. 96% of the country).
Think about it, when the appraiser start to use different GLA’s for the comparables, if they need to, it will screw up the lender’s AVMs even more keeping us employed. And especially with the conflict between the GLA of the subject property reported by the assessor which is wrong 50% of the time which you should know if you learned in the northeast. It’s really not a big deal, and that is the point I am trying to make, we have been instructed to measure the properties in a certain way. And I will say it again either conform or leave the business.
So, your rationale is spite, not credible reports. Good luck boss.
Man for someone in this business for 30 years and being so angry (see your prvious posts), you might want to consider retiring yourself.
We are just having a conversation about this as rightly we are allowed to. Your demand that we follow them blindly and just leave the industry is preposterous. What I/we can do is not accept any orders from Fannie and if enough of us do the same then it’s on Fannie to realize and figure their problem out.
Angry..not angry my friend, just got back from an 8 week vacation in Asia. I am as Happy Happy as could be. I will be retired at the age of 56 in less then 6 months living in paradise never having to work again.
I am just amazed. We have been instructed to measure houses with ANSi, it is not a big deal, just like we were told to report past sales histories, prior assignment notifications, UAD etc, etc…. it really is not a big deal.
Happy Retirement.
Thank you, after 30 years, i am done appraising. My point is that we have been instructed to use ANSI, why get all worked up over it. What Asia has taught me is worry about the big things, be happy. There is noting that can be done, so…..get over it ! its not a big deal.
Fraud is a big thing… thanks.
Jessie, Maybe I am missing something…What fraud are you taking about???
The only credible way to value real estate is to have similar units of comparison. If you have to “make up” means of adjusting the GLA of comps (because in 96% of the country ANSI is not the standard of county measurement, much less others) then you have to have a credible means of that adjustment. IF however, your county consistently measures homes in a market, even if its not the most precise in any one given instance, then you have consistent units of measurement. If you live in a non-disclosure state or where the assesor is drunk while measuring… good luck, luckily that’s not my market. But if I use ANSI I would regularly either 1) make up a means of adjusting county measurement to ANSI or 2) under/over value real estate by 5%. Knowinly using non credible methods to come to non credible results is fraud. So, the appraiser must determine the credible scope of work (USPAP) to make a credible value determination. In my market, the use of ANSI would be fraud. Therefore, everyone of my reports will disclose that and employ the exception:
“Assumption/Limiting Condition #2 – In an effort to use the same units of comparison between the subject and comparables, in order to provide credible valuation results, the standard of the county is deferred to whenever possible and credible for the purpose of analysis. Per FNMA: GXX001– ANSI is not used by any market Assessor and its use would be misleading and result in over/under valuation on a regular basis. As it would result in mortgage fraud to provide a non credible valuation based on non credible methods, the appraiser can not comply with this requirement and employs the FNMA exception.”
So what you are saying is measuring the subject under ANSI is fraud, because the comps were measured another way. If you then see the assessor info is incorrect, make a statement as to why, no big deal. If you know the assessor is always off, I hope you are reconciling the comps in GLA in the 1st place…comes back to those critical thinking skills we appraisers are suppose to have, other wise we are just form fillers.
So Jesse, many here and in my market as well notice that the assessor often gets it wrong. It’s just painfully obvious. Would you accept that obvious wrong as credible. I would not.
I just had a property last week. The assessor measured the dept of the dwelling 1′ too long. It was a cape design. On the upper level they also included some unfinished space as finished and did not include the stairwell.
Ironically when all was said and done and I used ANSI we ended up very close.
You wrote “IF however, your county consistently measures homes in a market, even if its not the most precise in any one given instance, then you have consistent units of measurement.”
Maybe I’m reading you wrong but it seems you are conflating Accuracy and Precision. If your county “consistently measures” then they should get precise results.
If they “consistently measure’ incorrectly, then they will get very precise yet in-accurate results and as I noted above it is often painfully obvious.
If you precisely measure a dwelling to 1” and read your ruler wrong that’s precise and inaccurate. This is what I see in several assessor’s records especially in the 2nd and 3rd levels of transitional dwelling. The assessor is very precise in their measurement method of choice. They are precise in their method of reporting by whichever means they choose. Say for instance a 24 x 42 Cape Cod 1,008 down 504 up. The method simply being to count upper level as 1/2 of lower level. No dormers even though the dwelling has 2. Now I look at MLS photos and see the interior is clearly more than 12 feet wide upper level. I have MLS room dimensions stating the room is 16 feet wide. I see 6′ tall bookcase, etc..
So the assessor has great precision in measuring and reporting but is about 150sf off the mark in accuracy. I appraise the identical home next door and end up with larger measurements yet I do not make an adjustment for GLA. I simply tell the client why I have not done so and maybe even include a photo from the comparable upper level. I consider that my job and why I was hired in the first place.
In the above scenario my measurements will not align to any published source yet they will be adequately precise and more accurate. At the same time all my reporting is credible. In fact I lend additional credibility to published data. I’m not going to inaccurately measure a dwelling just to match some other published data method. I have way too many counties and sources of the reported GLA to try and “do it the way they did it”. that would be impossible. I do not have to “make up” anything. If it’s there I use what I see. If it’s not I don’t make it up. I may tell the client I have my doubts the comparable GLA but no proof.
FNMA is making this bed, they can sleep in it. In the grand scheme of ANSI vs the new Condo research guidelines, this ANSI thing is a cakewalk.
So… I use ANSI to the best of my ability the way I always have done. Actually I will now tweak a couple of minor things that won’t make any real difference.
Using the assessor STANDARD does not mean using their MEASUREMENT. If the county measures to the nearest foot, that is the standard, not the measurement. Of course if the county is wrong you make corrections (ie don’t include the 10×12 enclosed porch) but you don’t make up a new measurement (9.9×12.2 because… I guessed). I sincerely can’t be asked to rebut opinions of people who are failing to read the counter point.
USPAP says the appraisers determines the scope of work, every FMNA report is required to be USPAP compliant, so that’s the end of it. If you have a consistent way to read the assessor’s tape for them after the fact – congrats, I won’t get caught playing that game of make believe (call it critical thinking, it’s guessing at best). If you want to be a form fillers using FMNA’s non credible scope, so be it – but I’ll continue to use critical thinking skills and use USPAP and recognized standards as my guide.
Jesse,
I’ve read this entire thread, taken a class on ANSI last year, etc… been using the method very closely for 38 years. Had 4 + years of mechanical and architectural drafting before I graduated high school. So I have a little experience in measuring things and drawing them.
You wrote:
“Of course if the county is wrong you make corrections (ie don’t include the 10×12 enclosed porch) but you don’t make up a new measurement (9.9×12.2 because… I guessed). I sincerely can’t be asked to rebut opinions of people who are failing to read the counter point.”
I haven’t asked you to rebut anything if you are speaking to me. You however are the only person that seems to bringing up make believe numbers. Why would anyone take an assessor’s dimensions and “guess” that they are incorrect and make such a minuscule difference as you suggest.
I can understand someone discounting the assessors measurements when they say it’s a 2 story home and several sources note it to be a 2.5 story with 500sf of finished space with a bath on the third level. That’s not make believe. That is data source verification.
You seem to suggest that anyone using ANSI will be guessing and making up measurements. Changing assessors figures to unrealistic degrees of accuracy and without any support from another source.
Not sure how ANSI standard could cause all that.
I’m just trying to figure out how the opponents to ANSI here are determining it to be so harmful.
I just don’t see how it is going to change the results anyone gets by all that much. Some of the changes are not even part of the Standard. They are part of the Annex which is not the Standard.
Again as I mentioned the only time I see concerning differences in appraisal sketches is a result of incorrectly drawing the sketch. It’s a spacial awareness issue, a mis-read measurement issue, etc. I don’t think I can recall a single time when multiple competent appraisers measured a dwelling and used whatever means they desired and had the results have any impact in value comparison. They are all very close. Varied precision used by each but all the results acceptably accurate to the market.
That’s with regard to the subject we get to measure. No guessing there.
Regarding comps. If you have a Comp that the assessor says is 2 Story 3,500sf. The MLS says 2.5 Story at 4,000sf. The MLS listing has a current appraiser’s sketch included indicating three levels and 4,000sf, and the MLS photos show the 3rd level finish is equal to the level below.
I’m reporting 4,000sf and explaining why to client. That’s not guessing and it’s not changing the assessor methods nor results. It happens all time here.
FNMA does not suggest that we guess and ‘correct’ other measurements. In fact they say they know the other measurements might be different but we are to adhere to ANSI. Well in my case the other measurements have always had the potential to be different. I don’t guess what they. I use verification sources.
The county I grew up in measures one neighborhood to include the second story as GLA, one doesn’t, that’s their standard for each neighborhood, they’re consistent… annoying but consistent. They did this based on who entered the sketch originally. If I use ANSI, I have to then “make up” an open to below adjustment for comps, easily in excess of 150sf. Nearly none of the counties in my area add staircases (I can think of two plans where they were added, and that county measures to the nearest foot). A few staircases is another 30-60ft. So, with ease we now have a 200sf difference between the ANSI measured subject and the county measured Comp. In some markets that’s a ton of money.
If I apply ANSI consistently in analysis, I commit fraud as I am not using consistent units of comparison – OR – I play pretend and make up some number (and that’s not a game I’m willing to play). IF however, I used the county standard as my guide, I have consistent units of comparison. Are they the most accurate… based on what, some arbitrary standard? No. But are they reliable for value determination? YES.
To force appraisers to use a non-credible standard is an act of fraud. To use non-credible standards is an act of fraud.
To use an non-credible measurement standard is a USPAP violation.
I will not be party to FRAUD.
You keep straw-manning the weakest arguments possible. Outside of the ANSI Faithful, no one knows what this made up standard is. The county assessor of the above county openly mocked this new “standard,” and rightfully so. New construction is placed in the public record not by the builder sketch measurements, but by the measurement standard of the county.
So if as you say – “I don’t think I can recall a single time when multiple competent appraisers measured a dwelling and used whatever means they desired and had the results have any impact in value comparison. They are all very close. Varied precision used by each but all the results acceptably accurate to the market,” would you support FNMA forcing appraisers to use a worse standard in the majority of the country? Those who are standing up to this nonsense are doing so because we are critically thinking professionals who know this is 1) at best a waste of time, 2) at worst an invitation to mortgage fraud, 3) another step towards hybrid appraisals (at least they’re still illegal in VA for an appraiser to perform, for now).
GXX001-
Additionally, I would urge those who advocate for ANSI to read WorkingRE’s article in the latest edition: Stairway to Confusion. Another great perspective on how ANSI is being used to commit real estate fraud.
Are you seriously trying to say that if you measure the property properly using ANSI. With an accurate measurement of the true gross living area, that you will be committing fraud??? Seems to me your reports prior have not represented the true gross living area of the property then, No matter how your assessors measure, you seem to be very knowledgeable on what counties do what, so I am still unclear how you think reporting the actual gross living area under the new guidelines is fraud. My friend, you make no sense, I don’t know how you were doing it before, but either way your measurement should have been very close to the actual gross living area of the property regardless of what tax assessors and counties have recorded. From what I am understanding you are saying is you have provided inaccurate gross living area figures in your appraisal reports. It blows my mind that we are even having a conversation about this.
You’re reading what you want now. With no basis in the words on the page. I’m not sure how many times I can type this – STANDARD DOES NOT EQUAL MEASUREMENT. You can use the county’s standard and come to a different measurement than the county, but that resulting measurement will be more consistent then applying two completely different standards to your subject and your comps as evidenced above.
IF you use a different standard of measurement for your subject than your comps, you are not producing a credible report. If you use non-credible standards of comparison to derive adjustments, then your value is not credible. If you do this knowingly, you’re committing fraud. If you’re comfortable making up an adjustment to the GLA of your comps based on hunches… go ahead. I don’t find that credible, maybe your peers do.
So what you are trying to say is if your actual measurement is 300 ft² below your assessor’s reported gross living area, you still report the assessor’s gross living area in your report. Because the gross living area figures of the comps would be similarly measured as the subject property was. If I understand you, you are the one committing fraud by misrepresenting the actual gross living area of the subject property based on an assessor’s reported figure. And now when you measure properly, you will have to reconcile the comparables to similar gross living areas as the subject property if they are similar models and then you will have to make a statement in your addendum explaining what you did. No wonder you are so worked up.
Misrepresenting according to what? The biblical cubit? Sure, I’ve been way off. Oh… you mean the pretend standard used by nearly no assessors, one of the largest suppliers of real estate data. ANSI is a standard, but not the only one. As Thomas stated, there are other ways to skin the cat, but I’ve presented a very obvious example of where ANSI produces a nearly 10% difference in measurement.
There is a strong “ANSI is the only truth” mindset among the ANSI faithful. If I paid all that money and then was confronted with clear and obvious deficiencies, WorkingRE articles, classes full of appraisers ridiculing the standard I had adopted, I’d be pissed to.
Again, if you chose to use ANSI moving forward, and have good market data for these “guesstimate” of adjusted GLA… good on you. I don’t see how that’s credible in my market, and in the review work that I do of ANSI measured work, I don’t see them doing this due diligence that your speak of. For me, in my market, and for all the appraisers for whom the use of ANSI would result in fraudulent reports, I will protest this and every report will be marked with…
GXX001-
So you are saying if you measure your house and it’s 300 ft² smaller than the assessor’s reported figure, you draw your sketch to match the assesses reported gross living area?
The “standard of measurement” doesn’t equal the “measurement” of the county, this has been described at least 3 times so far. No, I use the measurement standard of the county, not the measurement of the county because, in my market, that is the most accurate GLA source (with some exceptions).
Well now you have to use ANSI. Not the standard of a measurement of each county. Seems to me they will have more accurate gross living area figures from you. No wonder you’re so upset. Talk about all your comp data being wrong now. Get ready for all the letters asking you why you’re changing your comp data on previously used comps.
Nope, using ANSI would result in fraud in my market. Thanks for playing. Move Along. GXX001-
How is using an accurate system of measurement fraud? You are now required to use ANSi, just reconcile your comparables and explain what you’ve done. Time for critical thinking skills and not just that entry.
Yes, critical thinking is keeping me from committing fraud by using non-equal standards of measurement. Here’s the article mentioned above, and I’ve addressed your question at least three times.
https://www.workingre.com/stairway-to-confusion/
Stairway to Confusion
by C. Brett Bowen
There has been considerable discussion over the years about gross living area (GLA) measurement standards. The ANSI Z765 standard gets the lion’s share of the attention, and is the most widely referenced standard in the industry by far. It can also be the most difficult to interpret, particularly when it comes to stairs. Here’s why.
It is primarily important to recognize two very important facts:
1) a standard is nothing more than the definition of a unit of comparison and
2) it is the appraiser’s responsibility to be consistent with that definition.
First, what do I mean when I say that a standard is nothing more than the definition of the unit of comparison? The unit of comparison for something is critical to the understanding of that thing.
If I go to London and buy a souvenir, and the cashier says the price is 15, I need to know what unit of comparison we are talking about. Is that 15 Pounds Sterling or 15 Euros? Did the cashier happen to notice my accent and give me the price in US Dollars? The unit of comparison in this example is the currency. Knowing the currency is critical to my evaluation of that price. The same applies to GLA. The standard defines what unit of comparison we are using. In other words, when I use the term “gross living area,” what do I actually mean? The standard that I’m using is what gives meaning to that term.
Second, as an appraiser, consistency with the definition is actually more important than which definition is chosen. It is not merely consistency with oneself, or even with other appraisers, which is key: it is consistency with your data which is most important. If you believe that your standard of GLA is best, but those who are reporting comparable sales data are utilizing a completely different standard, it is your responsibility to either change your standard, or convert the data to match your standard.
Maybe this example will provide some clarity on this issue: Properties A, B, and C are the same floor plan as the subject property and have sold recently. The builder’s architect has reported the GLA of that floor plan to be 2,800 square feet using their standard for calculation of GLA. An appraiser measures the subject property using a different standard and arrives at a GLA calculation of 3,000 square feet. Before the appraiser utilizes properties A, B, and C as comparables, it is imperative that the appraiser recognizes that their standard is inconsistent with the standard which is reported in the market. Addressing the inconsistency is far more important than whether or not the appraiser’s measurements are “right” or “better.”
This lack of consistency is being a big problem and a big business. There are many appraisers who market their measurement services to agents with the specific understanding that their interpretation of ANSI will likely result in a larger GLA than what is reported. Why is this a problem? Ethics. If I am knowingly using a method of arriving at GLA which is substantially different from the methods employed by most architects, builders, and tax assessors, then the assignment results are knowingly misleading. If I know that on average my method of measurement produces a GLA 5% higher than what is typically reported of my comparables, then choosing that method without dealing with the inconsistency is unethical and a violation of the Uniform Standards of Professional Appraisal Practice (USPAP).
Consistency
So how do you deal with the inconsistency? There are two solutions. The first is simply to adopt the standard (or the interpretation of the standard) which is prevalent in my market. The second solution is to revise the GLA of my comparable data by extrapolating what the GLA of the comparable data would be under the methodology utilized by the appraiser. While this solution is theoretically ethical and USPAP compliant, it comes with some obvious flaws in practice. How do you know what the GLA of that comparable would be if it were calculated using your preferred method?
This brings us back to the confusion regarding ANSI and stairs. While the recent update to the standard (ANSI Z765-2021) provided some additional clarification in some areas, there remains some significant room for interpretation when it comes to the stairs. This is particularly true when the subject lacks a basement.
Two-story homes are very common in my market but basements are not. A common floor plan includes a switchback staircase to the second floor with a closet underneath which extends several feet under the staircase with a sloping ceiling in the closet. The question is where do you count the stairs? On the first floor, on the second floor, on both floors?
Increasingly, I am finding that appraisers are interpreting the standard to include the entire staircase on both levels. I’ll be the first to admit that this interpretation has some basis, although it does create some inconsistencies with other parts of the standard, and seems to be at odds with the methods of architects, builders, and assessors (at least in my market). This interpretation relies most heavily upon the illustrations.
The published standard includes several illustrations which are intended to clarify several elements of the standard, however, the illustrations alone can be confusing, especially if you don’t read the full standard itself. The illustrations depict a home with three levels: first floor, second floor, and a basement. The floorplan depicts a staircase descending from the second floor to the first floor, and then down to the basement. If you just look at the illustration, it indicates that the staircase is included in the GLA on both the first and second floors. However, it is important to read the standard to understand why. The standard states that “the area of both stair treads and landings proceeding to the floor below is included in the finished area of the floor from which the stairs descend…” (ANSI Z765-2021, page 6, emphasis added). The Annex to the Standard, which provides additional commentary, states that “stairs that descend to an unfinished basement are included in the finished square footage of the first level…” The parts of the standard which indicate that ceiling height under the stairs doesn’t matter, all appear to be in the context of stairs on the basement level. Therefore, if there is no basement, then there are no stairs which descend into the basement which should be counted on the first floor. The GLA above grade (ie, the area under the stairs which does not descend into a basement) appears to be treated differently.
My primary evidence is that of the strict adherence to the minimum height requirements in the same example. In their example, the area which slopes below a ceiling height of 5? is not included in the GLA calculation. Therefore it would be contradictory to exclude such a space in one part of the house and then include space which may have a much lower ceiling or even be entirely inaccessible. In other words, why would an area which has a ceiling height less than 5? under a staircase be counted toward GLA, while an area with the same ceiling height in a living room be excluded? My conclusion is that it is not intended to be treated differently.
With all of that said, the evidence within the standard for my interpretation is not actually the reason for my methodology. My interpretation closely matches the methods utilized by builders, architects, and assessors in my market, thus providing a consistent unit of comparison which results in credible assignment results.
I must reiterate that whether or not you agree or disagree with my interpretation is not the point.
If your data suggests an alternate interpretation, then utilizing the method that I just described may not only be the wrong choice, it might even be unethical.
About the Author
Brent Bowen is the President of Texas Valuation Professionals, Inc in Plano, Texas and has been appraising residential real estate in north Texas for 23 years. He graduated from Baylor University with an enthusiasm for both economics and real estate, which made real estate appraisal a perfect fit. Brent is always looking for ways to innovate the appraisal process, and enjoys sharing those ideas with his staff as well as others in the appraisal community.
I don’t know Jesse, we are now instructed to use ANSI. So if you do not you are submitting a non-compliant report. Your argument sounds fine by using the same standards however your argument is baseless because now you ever required to use ANSi. Maybe I do not understand properly because everyone I know, knows tax records can be horribly wrong and we have been taught to think critically regarding verifying gross living areas for our comparables, and it’s not hard to do when you can compare your measurements with the assessor’s measurements. So good luck with it, stand on your principles and I wish you the best.
I think critically about every tax record I research, which is why I look at everyone before I go to the property, and examine it on site to confirm or correct everything on-site to be able to detail every difference – down to the unit of measurement that the county uses. This is how I know my market data. The use of ANSI in some markets will result in fraudulent reports. It seems you’re convinced that’s not the case in your market. Great for you. Allow us to be professionals who understand our markets though.
Re: The staircase closet issue. He like many others is way over thinking this…
You have a staircase… Count it. the fact it has a closet makes no difference. The closet is within the area of the staircase.
Staircase counts on finished level from which it descends and the finished level below. So it matters not if a closet exists. It is absorbed in the staircase.
He also is mis-thinking in my opinion of the varied GLA results. Architect, Assessor, Etc. He leaves out the key element and the heart of the appraisal…. His OPINION. He is supposed to use ANSI and then reconcile it to the comparable data he has. Adjust or don’t adjust and explain why or why not.
What does he do when he gets Plans and Specs and the Architect says 3,000…. the Assessor has measured and says 3,075 and he measured it at 3,150… Let’s say that happened in 2018 before the ANSI scare. OMG how did he reconcile that? Three different standards. Three different results. Would the ethical thing to do be to notify the client, turn down the report, and suggest fraud may be or become present? Come on. No, it would not have happened like that in 2018 and it will be no different with ANSI in 2022.
I don’t know what world the rest of you live in but that has been life since day one for me as far as appraising goes.
Well said !!!
Thank you for a very complete and logical opinion on this issue. I agree and feel it is possibly an ethic violation as you have stated here. I guess we will see if /when the higher levels begin enforcement actions.
Great read thank you
Jesse,
” 3) another step towards hybrid appraisals (at least they’re still illegal in VA for an appraiser to perform, for now).”
When you write VA do you mean Virginia? I am from Central Virginia. Which county does not report area above the second floor as living space?
Your comment is somewhat confusing..
one doesn’t, that’s their standard for each neighborhood, they’re consistent… annoying but consistent.” I’ll break it down and maybe you can clarify… but if this in Virginia can you give me the county or neighborhood or maybe two addresses so I can see what’s going on.
“”The county I grew up in measures one neighborhood to include the second story as GLA,” —- Ok, I’m with you here… seems pretty normal.
“one doesn’t,” — One ‘what’ doesn’t? One other county?
“that’s their standard for each neighborhood,” — that’s whose standard for each? that would be two standards. Are we talking two standards for one county? Two standards for two counties?
“they’re consistent… annoying but consistent.” — this statement can only be if we are talking about two counties. Otherwise the one county has two standards that are anything but consistent.
Again I see no need for you make up numbers. Let’s use an example from the assessor that has their head up their…. I mean the one that doesn’t count 2nd story GLA.
You measure your subject per ANSI
1000 down
500 up
They report 1,000 total.
You report 1,500 on GLA line. Because that’s accurate and the truth. Or if easier you could report 1,000 and place the 500 on an other item line.
Either way you need to explain why this is done. Then for the comps you must have some knowledge as to the 2nd story. Otherwise you would not know it’s not being reported. In fact you must have some knowledge as to it’s size, functional utility, finish, etc.
So basically you have a lot of narrative to write explaining that you best data is perhaps from your files, MLS, etc. You can then place a note the 2nd level GLA is estimated and from what source. You claim to know what the areas of concern area in SqFt but for some reason also need to ‘invent’ them?
“If I apply ANSI consistently in analysis, I commit fraud as I am not using consistent units of comparison” Yes you are. The unit of comparison is the SqFt.. It’s your job to measure and report the subject accurately. Then analyze the data available to you and apply it in context to YOUR work.. not the work of some guy 60 years ago that the assessor still follows.
FNMA is telling you.. look measure to ANSI, then regardless of how, when or why you data develops, if it doesn’t align to your ANSI finding, just tell us how you think it should be handled,,,, but don’t defer back to some other “this guy from the 1920s methods” standard.
Well said!!! My guess about the second floor was attic area whether be a one-story rancher with some attic or a two-story house with an attic finished, I put finished attic on the open lines at the bottom of the grid all the time, I know appraisers who include finished attic and gross living area but then they have to compare it to much larger differing types of properties and their reports make no sense. Which is why they want us all to use the same system of measurements, they should have done this 30 years ago and the realtor should be forced to use the same measurement system and be taught how to accurately measure properties without worrying about liability of course.
This isn’t the 1920 measurement, this is in new construction in the greater Richmond area, are you looking at assessment records? Hanover County, the plans north of Pole Green Road are a great example, its been a few months since I did one there and I’m exhausted of what is basically a USPAP scope of work discussion. The assessor who entered one plan included all the open to below, the assessor who did another didn’t. It’s annoying, but it’s consistent per plan. Hanover doesn’t include staircases at all (pockets of Chesterfield do, they measure to the nearest foot, etc, etc ,etc).
If I use ANSI in the plan that included the second floor open to below, I short my subject 100-200sf In value because I used a measurement that’s not credible. Could I make up an adjustment to the GLA, sure, but I don’t find that credible. I’d rather use the standard that the county used for those properties. It doesn’t make for a clean CU, but that’s not my problem.
My report is accurate, and I didn’t have to make up an “open to below” adjustment, a “staircase” adjustment, et al. Why… because I use the same standard of measurement.
While I understand that the “SqFt” is the unit of comparison, you’re straw manning again. The Sqft you get from ANSI and the Sqft your get from the county assessor is not always the same, therefore the units of comparison are NOT the same if you use two different standards of measurement. This is why Chris has been so adamant that you need to “think critically” and make changes to the comps to bring them into ANSI… based on…something. Can you do that… sure, but as the WorkingRE article says, you’re opening yourself up to a lot of questions.
Ok, look I’ll tell you this much.
I work in Central VA. Richmond, Hanover, Chesterfield, Goochland, Powhatan, Henrico, New Kent, King William, Louisa ( mostly Lake Anna water front ), Caroline county, Powhatan, you get the idea.
About 38 years ago myself and another beginning appraiser that is a prominent name in town stated work at an office. There was one other “beginner” .. he had just retired as a local assessor. We had a buider / appraiser present, and another couple of appraisers. Plus a full sales outfit.
I later worked with another retired local assessor that is now one of the biggest top producer sales people in town.
I have seen the work, been taught by, been friends with, reviewed, or been asked to appraise for the biggest names in the Richmond metro. what I mean by that is not that I am any better than someone else, it means I have seen a =LOT= and/or have a =LOT= of other appraiser’s work. Thus far everything so closely resembles ANSI that a change to ANSI would be insignificant.
I have never seen it done the way you describe. … and yes I look at the assessors cards. I used to sit for hours on end at Hanover and Henrico flipping through property cards.
If you are talking about new construction just call the builder. Most builders even have the floor plans on their web site.
I can’t think of anything I have done lately new construction north of Pole Green although I think I did do a review over there recently. At any rate you made it sound like Hanover county didn’t count all of second floor. I assume now you are speaking of two story foyers.
If you know or have a very good idea as to the situation just equate the situation. You don’t have to “cheat” you subject just because you use ANSI.
Believe me based on the review work I do and all the work I have seen and been a part of for the past 38 years, either I am misunderstanding what you are writing or you are the guy that is doing it differently from the vast majority of your local colleagues.
BTW, will you do me a favor. Tell all the appraisers you meet in this region to arrange their reports such that when they have more than 3 comps to put Comps 4-6 page directly after Comps page 1-3. I don’t why everyone insists on placing the addition comps at the end of the report. It’s incredibly frustrating to read in review.
If you think your addendum are going fly more power to you. It’s your work and your opinion.
My peers do a lot of interesting things, like including split foyer/multi-level basements in the GLA. Lots of complaining there too (as if FNMA hasn’t been clear in the selling guide for 7 years). We can agree on one thing, appraisers who don’t put their 4-6 comps directly behind 1-3… are strange. I hate seeing that too.
Jesse,
“Hanover doesn’t include staircases at all”
Can you go here and explain to me how the staircases are -not- being counted. Built in 2019 north of Pole Green Rd. Note that stairs are on side of home opposite garage and the skectch clearly indicates all that area is two story ( counted twice )( Per ANSI: Include from descending and area below. in this case 2nd and 1st )
https://parcelmap.hanovercounty.gov/
Search for 7774 Millikin Ln
It’s a dead ahead two story. No vaults, no two story foyers. Sketch is present on Residential Improvements tab.
It’s your MLS #2125326
As seen here on realtor.com
https://www.realtor.com/realestateandhomes-detail/7774-Millikin-Ln_Mechanicsville_VA_23116_M97506-02322
Was referring within the context of the post, with open to below space, the stairs aren’t included in the second level. Of course Hanover includes the stair case in properties that have no open to below. There are a lot of plans north of Pole Green, as I said, I’m exhausted by this scope of work debate, as USPAP has said it all.
Ah…. ok… well go back to the link at Hanover and type in 4806 Queen Carolyn Ln.
You have roughly a $700,000 home. That’s where your comps will be. $650 to $725 if you are real lucky. and that 40sf for the stair case is what you believe reason enough to not apply ANSI to your subject. So you have a 1/2% on one comp for a staircase GLA situation in that part of Hanover. You get to the bottom line and say it adjusts to $690K just add a 1/2% in your mind/notes.. $693,450. That’s just one comp. I don’t know anyone that can tell if a property really worth $690K or $693K but even if they could ANSI would not be in the way.
All the other unknowns are ok, but knowing there is maybe 40sf of stairs there is an issue. You don’t want to allow for 40sf because whatever. You know for a fact it has been omitted. You know roughly how large it must be. but it would be fraud to mention it and handle it. Hell subtract the staircase out of your subject, place it on a separate line at bottom.
Staircase – Staircase – Staircase – Staircase — Boom 3 comps no adj. All GLA aligns to county and your subject is measured to ANSI standards. ANSI does not define how you REPORT. GLA is not mentioned in ANSI.
There was a joke going around one of the shops here a long time ago. It was back when the market was booming. I think one guy had an order in like Mooreland Farms or something. It was a really expensive home, and the guy appraised it for like $3K less than the sale price. One guy chimed in and said ‘you realize you just cut an appraisal for what amounts to an upgrade on a refrigerator in that neighborhood. LOL, not even the whole fridge just an upgrade. Everybody busted out laughing.
Oh well, one man’s tree is another man’s forest.
Still as strawman, still not recognizing that this can be up to 10% of the GLA… and personal property can’t be included in an appraisal, so not sure how a refrigerator upgrade is relevant: B2-1.5-03, Legal Requirements (06/03/2020). One man’s fraud is another man’s gray area.
You totally missed the point. Re-read what I wrote. The joke was that the appraiser thought he knew better than everyone else to a ridiculous point of precision. No one made an adjustment for a refrigerator.
I guess you never appraise properties with wine refrigerators, bread warmers, ice makers, aux freezers, SubZero fridge,….. all built in and what one finds in the property and location I mentioned.
Ah, the ole Strawman comment. What a joke.
Jeese, I have been recognizing the inaccuracies of tax records for 38 years here in Richmond. So have most of the Appraisers and Brokers I have been associated with. We have never had an issue communicating that to our clients.
You keep throwing the word fraud out directed at anyone that has and/or will be following ANSI. I assume that you must also be an attorney. Why don’t you contact FNMA and set them straight?
I think Jesse has been misrepresenting his gross living areas by using what the tax assessors report, I am not sure how he has been drawing his sketches, but I don’t know how you draw your sketch after measuring her house and then try to match that to tax records. I have seen appraisers copy and paste the assessor sketch to their reports without ever having to measure the house. After I measure the house the square footages are obviously always incorrect and then the comps need to be readjusted within the body of the appraisal. I have no idea why he keeps bringing up the word fraud, and when you measure a house and other appraisers measure a house it should be within a couple square feet of each other. And Jesse never answered my question of what he does when an actual gross living area figure is so inaccurate compared to the assessor’s figure. I think Jesse is projecting that he has been in fact committing fraud every time he misrepresents the actual gross living area of a property. If somebody else can give me their opinion on my opinion I would be greatly appreciate it, because I keep trying to understand what Jesse says and it just does not make sense.
Chris,
I’m not sure what he’s doing. I couldn’t figure out how I could not know who he is when I realized he is from my area.. I got mixed up and thought he had been appraising for 30 years. That was another person’s post. Anyway he has only been appraising here for 2 years. I read through his web site blog. He has some interesting perspectives that differ 180 from my experience but hey…
Anyway, I’m pretty sure by May of 2022 everyone will be on the ANSI train. Same ole song and dance. If FNMA said from here on out you have to take two photos of the front of the dwelling several appraisers would say “oh hell no” like it’s some big deal.
I can remember years ago. Seems like 15+ now, my appraiser friend called me up and asked me how I measured fireplaces ( on the outside ). I said what are you talking about? No I don’t measure that. His reply, well I just took an ANSI class and we are going to have to do that. I said that’s crazy. He had gotten mixed up, called me back. ‘No, it’s ok, I was wrong, we are already basically using the ANSI system the way we have been doing it.’
Wouldn’t it be funny if on April 1, 2022 that FNMA says “fooled you didn’t we?”
Thank you for your response, I just couldn’t figure out why someone would be so upset to call measuring with ANSI would lead to a fraudulent report. Crazy. But he seems to be pretty firm about it. Everyone should b on the same page regarding attic and other spaces, I am so tired of hearing why we dint include a finished attic as GLA, That is when I make a line item adjustment for finished attics vs. unfinished attic, so simple. And I still don’t know how someone can include the 2 story open to ceiling family room or an open foyer as GLA just because the assessor does. Crazy !!!
Been appraising 5 years. Your ability to research speaks for itself.
I said here for 2 years. As in central Virginia. Here, I’ll quote it for you…. “appraising here for 2 years.”
Initial Certification Date2020-02-13
Rank Effective Date2020-02-13
Expiration Date2024-02-29
As you noted earlier, the concepts you have mentioned were all related this locality. Hanover, Chesterfield, local customs, etc..
I know you got your license for a few years in PA as well but that has nothing to do with the comments you made about specific local issues.
Personal Property SHOULD be properly described and documented with supporting info. PP ain’t necessarily appliances, they are frequently things like Water Shares, or Shares in a sewering system, etc.
Well said !! The tax records and public records we have access to now gives us the ability to correct a wrong gross living area for a subject property that we have measured. I have yet to do this because a liability concerns, but it could save many homeowners from having to pay access taxes in the future. As I will be retiring in the next couple months, I will leave this up to the younger appraisers to deal with. The goal is to give more accurate data so that all of us in this industry can work together to get these loans done, for 30 years I have been hearing appraisers cry about being replaced and I have not seen that happen nor do I foresee it happening.
I have to agree with you chris. For someone to suggest that using ANSI is fraud is quite hard to believe. By that logic, here in my market, practically every appraisal written for the last 40 years by every appraiser is fraud.
“The Market” Basically being the MLS, Agents, Buyers, Sellers, Brokers, basically lump all Finished Sq.Ft. into one lump sum. Above ground, finished over a detached garage, basement finish, etc..
It has only been in the past several year that our MLS would even report basement finish and many agents still don’t know how to report it correctly.
Yet we appraisers follow FNMA direction and break all those items down. Contrary to what “The Market” is doing.
That is not fraud. If anything it would be fraud on the part of those that publish “The Market” data.
Agents want a 1,000sf ranch with a finished basement to look to the public as a 2,000sf dwelling in marketing.
I have requested for multiple decades that our MLS would simply break down their reporting to show Above grade, below grade, etc. Finally they changed a few things. What the people that control the market and MLS came up with is this…..
Ranch 1 story
Finished SqFt. – 2,000
Finished SqFt in Bas. – 1,000
Unfin.Sq.Ft. in Bas. – 0
Now you might think that is 3,000 SqFt of finished space. 2,000 above grade and 1,000 below. But no, it’s a 1,000 SqFt ranch with a 1,000 SqFt finished basement.
As I said, even via that convoluted “newly updated system” many agents either ignore the basement fields altogether, report them incorrectly or some other combination.
Now the assessor will use a different system. So for every basement home I have to compare the numbers used and determine how they came to be as best that I am able.
So this argument about ‘can’t use ANSI because that’s not what the market is doing’ makes no sense to me. I can use ANSI, but I will still have to figure out how reliable the comparable data is, or which comparable version is most accurate if they differ. That’s just the nature of my market and the elements that control our MLS data ( hint:it’s not the appraisers ).
I think what FNMA is doing is short sighted but it’s no big deal for me. I think they have created a complex solution for a problem that doesn’t really exist.
ANSI should be a big deal for those still doing mortgage appraisals. The Desktop Idea is more of a big deal. Boy, its amazing how major clients for appraisers can tell appraiser how to do their job. Has anybody, out there, ever told their dentist how to fill their cavity, how fast to do and what their fee will be. LOL
raymond,
“ANSI should be a big deal for those still doing mortgage appraisals.”
can you explain why?
I do some mortgage work. I do not do Desktops. I tell my big name clients what my fees are, how much time I will need. I’ve been using about 95% ANSI for 38 years.
How is it going to be a big deal for me?
meant to say ANSI is NOT a big deal. The DeskTop idea is a big deal or a poor deal.
Thank you for the support,
I just don’t understand some appraisers acting like the sky is falling in…..our industry is always changing, get over it, frankly we all should have been on the same page with measurements 30 years ago.
Chris, For someone telling others to get over it you sure can’t. Over a month of posting and you’re the one still freaking out. WOW!
I agree with you 100%, the latest travesty is one county just reassessed, and they round it up every figure so in order to get the sketch to close some walls could be three four feet larger than they should be adding hundreds of feet to the subject properties and our comparables. We therefore now have to use our critical thinking skills after measuring the house and compare that figure to the assessor’s figure and then start making some blanket statements about reconciling the comp similarly. The benefit is this is that the lenders cannot trust assessor data and we appraisers get to keep our jobs.
Thank you for making my point….
Just a reminder that this blog is for appraisers but not a place for colleagues to disrespect one another and no place for rude and snide comments.
We encourage lively debate, but ask that you be respectful of others. If you disagree with someone, please express yourself respectfully. If you disagree with an opinion, feel free to respectfully challenge that opinion. Do not engage in personal attacks (including name-calling) on fellow commenters/appraisers. Please keep it professional and conduct yourself as you would within your own organization. Snide or rude comments are not constructive and certainly not helpful. We count on your cooperation and appreciate your support!
I agree I would be more worried about Desktop/third party sources measuring the home. To be honest I believe this whole ANSI is for the 3rd party sources they will be using to do inspections, not necessarily the appraisers. Just a thought.
I just took a 7hr course on ANSI, just to find out that I have been measuring homes like that for 39 years. As for the desktop reports, I will let others do them. I never had an issue with the desktops, but I will not sign off on another person’s inspection and sketch. In one course I just took, the lawyer said that 60% of the complaints against appraisers were over square footage. Just remember the same people who are pushing this will be the same ones who will file a complaint with the state when the properties end up as REOs. As for the state regulators they will look for any reason to destroy you with USPAP violations. They need to generate income, my board sent me a 5 page letter telling me that they would not give me credit for some of my CE, which was funny because my classes were approved by the Real Estate Commision, hypocrisy has no bounds.
If appraisers were taught to measure properties accurately, using ANSI is not a big deal. But only to those appraisers have been using assessor data and falsifying their sketches to match tax record gross living areas, I did reviews for 5 years and I know the appraisers who are too lazy to actually measure a house. I know this because I told my lenders I have to do inspections and order to give them a value and since they needed a new appraisal they said go ahead, I was then able to compare sketches to my sketches and could easily see who wasn’t bothering measuring. Can you imagine reporting a gross living area and not measure the house. Blows my mind, but that is why the appraisers are considered what we are today, because of appraisers like that not doing the job.
“I just took a 7hr course on ANSI, just to find out that I have been measuring homes like that for 39 years.”
Exactly what I expected. This comment about a small percentage of the country using ANSI I believe is a canard. I think everyone I have ever met uses a method that is so close to ANSI that any difference would be minuscule.
It may not be a State, City, or County standard…. but the appraisers are following it to a very close degree.
90 days until retirement !
Have fun
Good night
Happy Birthday. in 3 months