ANSI & Floor Plans Goofiness
“…if you the appraiser are not required to inspect the property yourself, don’t you want to have a more detailed diagram of the home, i.e., a Floor Plan?”
There’s been lots of discussion on various forums, classes, Facebook, blogs, podcasts, surveys, articles, etc., about the upcoming ‘demands’ by ONE of the GSE’s to measure using ANSI Standard Z765-2021, and by both GSE’s to provide a Floor Plan for certain assignments. Uniformity is the stated goal.
ANSI is not consistent in how they want the perimeter of homes to be measured. Here’s why: for new construction, when the plans (blueprints) are provided to the appraiser to report ‘GLA’ etc., those dimensions on the plan are measured from the EDGE OF THE FOUNDATION as shown on the plans, not the sheathing or siding on the home. (3.1) This is the same dimension locations the local assessor uses when they input new construction homes into their taxing data base from submitted plans – because in most cases they do not physically measure new construction homes in the field – they use plans submitted for the permitting process. Cantilevers extending past the foundation or lower floor are measured to the exterior stud face for the wall, not including sheathing or siding.
But when the appraiser physically measures an existing home on-site, the ANSI Standard says to measure “at Floor Level to the exterior finished surface of the outside walls.” (3.2 & 3.3) Does the ‘exterior finished surface’ include brick or stone veneer that extends beyond the actual framed finished wall surface?? Does the ‘exterior finished surface’ include the corner trim that most homes have?? ANSI doesn’t address these items directly.
When one really stops to analyze what ANSI is saying, realization is that measuring to the ‘finished exterior wall’ actually can or may have the result of ADDING square footage to the dwelling! When you also know that the ANSI Measurement Standard initially came from requests from the home building industry beginning in 1994 to establish a Standard, you can see why they might want that to be the result!
ANSI does not use the term “GLA” which is on all our forms. ANSI uses ‘Finished Area’ to reference both above and below grade areas suitable as year-round living space, and ‘Unfinished Area’ for the space not meeting the criteria of Finished Area. However, for reporting purposes, Fannie Mae expects the GLA figure to mean above grade Finished Area, and basement to mean Finished and Unfinished Area below grade.
For those who may not know, most homes in the US are designed using common lumber dimensions (measured to the INCH) to avoid as much wood waste as possible. Plywood or particle/OSB board used for exterior sheathing is in 4 FOOT dimensions (48 inches) in most cases, sometimes 5 feet wide, and by either 8 or 9 FEET long. Pre-cut 2×4 or 2×6 INCH studs used for wall framing are cut to a specific length to accommodate the top and bottom plates and wall sheathing without having to make wastage cuts in the sheathing. Interior Drywall is made in 4 FOOT dimensions, by 8 or 9 feet long, again to fit the normal ceiling heights without having to cut and waste very much material.
Most homes in the US are designed using what’s called “English Measurement”, usually meaning 12 inches to the foot, or in some cases, 10 segments to the foot. Most new home plans I’ve seen in my 21 years appraising are using FEET & INCHES, not tenths of a foot. Most US building carpenters use measuring tapes with INCHES on them! (I designed the home I live in using FEET & INCHES, not decimals!)
To repeat: ANSI says to measure the “exterior finished wall” to the ‘nearest Inch.’ At floor level. Final square footage is rounded to nearest whole square foot.
Well, since we are supposed to bend over and measure from that floor location, and not chest height as most of us do, why shouldn’t we actually measure from the face and corner of the Foundation (just below the floor level), as home plans are dimensioned? Doing that will give us consistent measurements with the local assessor, assuming of course that they use the dimensions on the plans given to them. It will also make the appraiser’s measurement very consistent with comp ‘model match’ dimensions when those exist!
Concrete block, brick wall, straw bale, rammed earth, log and other such homes are measured from the outside surface of the material, but I would argue that observing the actual foundation location is prudent to know where the actual exterior wall structure is positioned.
The ONE GSE has selected April Fool’s Day as the effective date for this new measuring standard. It has done so in an attempt to force everyone who provides home building dimensions and ‘finished and unfinished area’ square footage to “get on the same consistent page.” How can that be, when ANSI itself is inconsistent??
Turning now to Floor Plans. That wording was subtly incorporated into the former ‘flexible’ reports we were able to do during the COVID era as a required exhibit, but was NEVER ENFORCED. Then that wording was subtly incorporated into the ‘new’ form report “flavors”, the 1004Desktop and 1004Hybrid. The rationale for doing so is “well, if you the appraiser are not required to inspect the property yourself, don’t you want to have a more detailed diagram of the home, i.e., a Floor Plan?”
On the surface, it sorta makes sense. Dig deeper, though – does it really help consistency?
When an appraiser does a full inspection for a traditional SFR report (and the report goes to ONE GSE, at the moment), the appraiser needs to provide a ‘Sketch’ with exterior dimensions only (unless internal design problems are found), and MUST do the measuring per ANSI.
But, when the moonlighting pizza delivery or ride share driver “inspects” the house ** and gives a property condition report to the appraiser, then that person DOES NOT have to measure using ANSI, but must provide a Floor Plan. If the homeowner or maybe a real estate agent cooperates by holding their smart phone (only certain models) with a proper ‘app’ installed and walks around the property, the resulting Floor Plan does not have to be per ANSI standards.
Several AMCs are actively soliciting to hire ‘inspectors’ when a borrower or agent won’t cooperate on Desktop reports.
And of course, the data collected and presented to the Desktop appraiser must be “verified” from a dis-interested source, if the appraiser is to proceed with the assignment.
** Don’t get me started on the semantics of whether or not this is actually an inspection!
To summarize: So, if an appraiser does a FULL traditional inspection (for Fannie Mae), measuring must be done per ANSI, but no FLOOR PLAN is required – only a Sketch (except as noted above). But if a DESKTOP (or Hybrid) report is done… then the FLOOR PLAN is required, but it does not need to be done per ANSI.
The whole reason why ANSI is being mandated (by Fannie Mae only at this time) is to try to get SFR measurement data done by appraisers uniform across the US. But if no appraiser is directly involved, then that’s out the window.
Raise your hand if you think either of these makes logical sense in making data uniform!
- Sale Price vs Appraised Value Disconnect - April 10, 2023
- Speed Regardless of Accuracy Under the Banner of Modernization - March 8, 2023
- Marin City Discrimination Case Settled - March 7, 2023
What could possibly go wrong, ha! I have been asked if I am willing to complete desktop reports by several lenders and AMCs. I haven’t answered any of them because knowing I have to provide a FLOOR PLAN that is not readily available let alone provided by ANYONE and I will be the responsible party makes me, uhm, a little leery. TO SAY THE LEAST. That said, I’ll be happy to do some floor plans for some extra $$$.
They don’t want you, your experience or your trainees. Amc’s and Fannie want to hire Uber Inspectors with there Uber Apple Phones! This will make it so much faster with less appraisal resistance.
Carole Christensen no answer is an answer
So, I can rely on a sketch and inspection by who knows, but I have to inspect the property with my experienced trainee that I trained? Makes zero sense.
Jimmy Daust it is unreal, I can’t really have a trainee if I have to inspect it with him or her. Makes no financial sense for me. But maybe our trainees can go out and measure for realtors. This will only make the process longer, not shorter.
So the answer is to inform clients that you will only make GLA adjustments over 300 or 500 sf due to wide variance in data base (Assessor or MLS). This is easy!
For 39 years I have used 100 sf, which appears to be in line with FNMAs computer generated reviews. When I complete appraisal reviews, I never measure the subject to see if the appraiser is correct. What if the appraiser if off by 36 sf, what is FNMA going to do? I have never completed an appraisal report for FNMA, my report is completed for the lender not FNMA. I never list FNMA as an intended user in my reports.
FNMA should pay the appraisers for using the data in our reports. Corelogic is no better, I pay for the software, I pay for the portal, I pay to send the report. When the report is in the system Corelogic uses that data form my (our) reports to create their own reports on the back end to sell to clients.
I sometimes wonder if the people at FNMA who create these rules and regulations governing the appraisers really know what they are doing. The appraisal “profession” must be one of the only “professions” in which other people constantly tell us what to do. The appraiser should have united 40 years ago, we did not and now we are paying the price. Part of the problem should be placed at the feet of the appraisers who did not want to organize as a force to be reckoned with like NAR.
NAR collects a lot of money to pay for everything. Appraisers don’t have such luxury and that’s the main reason why we haven’t united 40 years ago.
If you’re filling out those appraisals on FNMA forms, you are performing GSE appraisal work. There is no writing out additional parties whom will be privy to the report once the lender seeks to recapitalize their position and fold that appraisal alongside the loan package it resides in, into a mortgage portfolio which the GSE is tasked to offload to investors. There may be a distinction between a party whom relies on the report vs an intended user, and there is approved language you can and should use in that regard. However, this does not relieve the appraiser of all possible liability and responsibility. Link provided.
I had a few clever agents once whom ran an FHA deal for a crumby house and they tried to write out inspection requirements repair requirements the works, in their contractual terms. They did in fact create mutual agreement in their contract. And then the appraiser stepped in. I was like sorry charlie, you can’t write out the standards imposed for the loan being sought. If it’s financed by anyone other than a hard money lender, and being funded by an originator whom works with gse’s and require fnma forms, the full range of compliance standards imposed by the GSE your lender is working under applies. I called them on a long list of repair items. Then I advised them one of the silliest negotiation tactics available is forgoing the home inspection. They were just coordinating to walk a struggling borrower into something even if it was an impending money pit. The first thing many agents learn in this business is how to back pat and double deal.
Per your final question, bureaucrats rarely are on the same page and no, they usually don’t care. FNMA & HUD are so far off their original charters, nobody even remembers their proper purpose. It’s all poisonous protectionism from the FDIC to the GSE’s and beyond. There would not even be a GSE without the Fed printing fiat money at a breath taking pace. There are many previous studies which prove that once lenders were able to share liability with government insurance and government guarantee programs, those same lenders quickly altered course and shifted away from sound fiduciary management and sound risk benefit analysis, to instead engage in more risky lending practices and predatory behavior harmful to consumers. They make all the money while the taxpayer takes all the risk. It’s the revolution by morning and charging breadstuffs Jackson quotes all rolled into one, now instituted as a never ending institutionalized process requirement. However, it’s never too late to abolish the fed and recognize taxation is theft. If anyone is not happy with whatever the government is doing, it may be wise to cease advocating for larger government. “All wars are banker wars.”
In 1986, The National Association of Real Estate Appraisers, was a wing of NAR, and to be a member you had to be a Realtor. Due to national legislation conflicts with NAR and Appraisers, the appraisal wing left NAR and formed The Appraisal Institute, shortly after that a dozen appraisal organization appeared on the scene, each representing its specific interests. Some times working together, often not. There is a side group, the State Appraisal Associations, now more than thirty that work together and have begun to be a force, they are less expensive to join, mostly voluntary, and need and welcome individual appraiser support. Even if you are part of one of the national associations, you should join your state association.
As to measurement, in 1986 NAR issued a statement to all REALTORS, do not measure houses: over and over Realtors are being sued for wrong measurements. The living room on the listing was 10 x 15, the buyer purchased a 10 x 15 carpet, and it was too small. NAR recommended that the Realtor use the assessor’s square footage. A month later I sent in appraisal reports with no square footage in the comparable section, with the explanation that neither the buyers, sellers or agents knew the square footage of the houses; subject or comparable, I was told to put in a number anyway, any number.
I do not know how Assessors do it everywhere, but in Maryland for detached houses they measure the first floor above ground level. They take that measurement and multiply it times the number of floors: 1; 1.5; 2; 2.5; 3 etc. They do not use 1.25 or 1.75. Then, on another line they add costs for dormers, but never add that space, including shed dormers. A saltbox is 1.5 time first floor. A cantilevered 2 or 3 foot over hang, is not added for the added space. These can be rule breakers, for the owner getting a lower tax. A cape cod whether roof is 4/12 or 12/12 with dormers, or none is measured as 0.5 times first floor. Realtors continue to use the assessor’s figures.
It is time we use descriptive words and forget the measurements, because so often size was not a factor: like 3 big bedrooms. or 10 little tiny bedrooms. One I inspected recently: The kitchen was so small they had an 18 inch wide dishwasher. The answer is that as we have to purchase the ANSI guideline, we need to add an additional charge for an ANIS measurement. The cost of the book would be a good price. I cannot believe that FNMA would require we use a private association formula and make us pay for it. Are they getting a kick back?
Think of it this way, you measure the outer surface of the house, the stairs are on both the floor of the lower level, and in the air up to the second level, therefore the stairs are on both floors. The open area floor of first floor to 2nd floor ceiling is not counted. Add the over hangs.
It is likely that your ANSI measured house is bigger than the assessor’s identical house next door. Your bank will think they have a bigger house with more value than the house next door. And if you say, you measured using ANSI you have a standard, and the other house is “unknown” you are not responsible for that error. Or you could say, the ANSI measurement is X, which is standard, and then put in the figure that the Realtors and Assessors use for your subject on the comps page, because that is what the market thinks your house is, and then sit back and watch the computer programs blow gaskets trying to make you fix it. What is correct, what the market thinks? Perhaps the problem can be solved, as the ANSI measured house has external obsolescence because the market outside the property does not think the house is as big as it is. Thoughts?
Fitz, you really nailed the issue. I was saying, if such major institutions like GSE’s want to get more consistency in measurement, they should be pleading and advocating with their government connections to push something like ANSI down the line for assessors, somehow through taxation, builder standards, codes, some regulation other than appraisers. I mean, they’re just short cutting to the people they have some form of jurisdiction over, the largely unrepresented appraiser. No opt outs!!! A harsh tone. Do it this way or else.
But none of the assessors around here comply with ANSI, we have a million or more tri and bi levels, all of which have that partially below earth ‘garden level’ area. And like a magic trick, appraisers are supposed to cut that out. It’s so problematic, because that cut out formerly agla now basement non basement area should still adjust same as agla, while occasionally we’ll need to cross compare against something with an actual basement with a lower adjustment basis. If ANSI is going to be demanded by FNMA, my suggestion is the new forms need three different gla adjustment lines. ANSI qualifiable above grade, basement, and a third special line for situations where ANSI requires we cut out ‘market recognized agla’, which still needs adjusted at the normal agla basis. It’s going to steal a line item on my current 1004 form and I’m not sure the updated form is capable of even writing in a special line like we do now.
Why can’t they just leave well enough alone? If you read through the ANSI working group for measurement standards material (linked in one of these blog rolls as we’ve had several lately), the ANSI group straight up ignores all the licensed appraisers suggestions and does it their way instead. They like ignored 14 out of 16 appraiser consultant objections and suggestions, denied, denied, denied. Like some frigging kings of industry, or board leaders, the ‘ANSI working group’ is driving the actions of tens of thousands of appraisers, effecting hundreds of thousands of realty agents and all the others down the line. Even NAR wrote a letter someone posted on this blog, asking FNMA to walk this back immediately.
And now they’re going to make a fortune selling silly digital ebooks. I agree, someone has to be getting paid handsomely for this and truly if this is going to be the standard, FNMA should likewise demand ANSI release the book for free to public and stop charging for it, if not incorporate it into the selling guide. By incorporating it into the selling guide this would in a certain way prohibit or at least slow down the inevitable repeat update of the ANSI book. It’s going to be cosmic cobra on steroids far worse than the new uspap book every two years. This private company is going to make a lot of money selling everyone from apprasiers to reviewers to just a great many people this book. We won’t be allowed to legally share it I’m assuming that’s true. And nobody else will be able to understand how appraisers are doing things unless they buy this damned book. Since when did we have to pay for a book to understand a shoe size (another standardized deal ANSI completed), or to know the size of standard tools, or know electrical measurements, etc. Of course it takes skill but if there is to be standardization, the point of that is for the betterment of an entire industry and should not be used as a cash grab held behind a paywall. The other ANSI thread caught on fire has like 350 posts.
A few pro senior appraisers were really helpful and they make this work. But they don’t necessarily deal with the same ‘market recognized’ sizing situations in other states. The ANSI allowance list for using GXX001 is clearly written by some coastal person, talking about burm homes and cape cods. Never seen that home type in my entire life. We have Bis and Tri’s that always have below ground garden level, unusual mountain A frames, builds into mountains and slopes, lot of walk outs. I wrote FNMA asking for an expanded list to be included in the allowable exception code lists. What a mess. We’ve all had enough government mandates to last a life time. These people do not understand the principals of volunteerism and think they can run the world and make everyone comply with dictatorial mandates from an ivory towers. This has got to be more disrespectful than hvcc and cutting us off from lenders. Or, well, it’s close.
I’m going meme nuts lately. It’s fun though. Here is a unique creation, overlaid on an ANSI safety sign… At some point groups like this ANSI body need to slow down. Want to standardize the whole world. Tired of getting pushed around by people whom don’t have appraiser licenses themselves.
Maybe all of the homes in your market area fit that. 100 sf difference can be a big deal for a 300 SF condo. In a 10,000 Sq.Ft. house the market might not notice a larger difference.
How will these AMCs instruct their Uber Inspectors to set up the inspection with the Owners. Will they disclose that they are not appraisers upfront or will they claim to be appraisers. This should be DISCLOSED up front to the Home Owner so they are aware of who is coming into their home, what there qualifications are and who will have access to the data, to protect the public trust.
This is like giving law advise, without a Law license. Why is this acceptable Appraisal Practice? This will be a Hugh Cluster F—!
What we need to do is inform home owners of the privacy risks. A lidar 3d scan is not a laser measurement, far from it. A 3d scan is similar to someone taking what is likely hundreds of thousands or even a million photos inside your home. The chain of data custody will be broken. Every home scanned in this manner is disclosed by the software developer to then have a ‘digital fingerprint’ created where that homes content rests in cloud servers and can be accessed for a wide range of other tech company purposes in the future. If there is some sort of privacy disclaimer the lender pushes it will be meaningless, big tech always monetizes data and that is their primary business motivation and company function.
Hide your gun safe, your political posters, and your pipe! Hell no you may not come into my house with 3d scanning equipment. I refuse to accept this third party inspector nonsense on principal alone, because they are playing loose with peoples 4th amendment rights to privacy, to be secure in their persons houses papers and effects.
Below is a version of what I have posted on George Dell’s blog, Richard Hagar’s Facebook page, various appraisal Facebook pages so far, and verbally to our local MLS contact.
“ANSI came out in 1996 and was probably fine for homes built in 1996 or later. It is laughable when used for many much older homes. I have corresponded with Home Innovation which indicated to me that when ANSI measure standards do not work in these older homes ANSI declarations #2 & #3 should be used to opt-out. In Fannie Mae’s interpretation of ANSI, there is only a limited opt-out for occasional use(GX001). Ridiculous! One of the most egregious ANSI issues is when a 2 story home from decades earlier has a 6’5″ 2nd-floor ceiling height which does not meet the ANSI minimum 7′ standard so it is no longer square footage. The potential comps may or may not have the ANSI required 7′ height. There is no source for this comp information. The assessors do not have this information nor do the agents. Fannie Mae ignores this fact and merely states that the appraiser should simply keep researching as if there was some hidden source. Need more? In my state, New York, the assessor’s manual requires the lower level of raised ranches and splits to be measured as square footage if finished in a similar fashion to the upper floor since that is what the architect intended. Agents agree. ANSI says it is not square footage. Still, need more? Only Fannie Mae requires ANSI. Freddie Mac, USDA, FHA(HUD), VA, and 48 states do not require ANSI.
2nd floors that are not ANSI compliant are typically at worst legal non-conforming and are well accepted as square footage in our subjects market.”
When I asked the appraisers who say they have been measuring using ANSI for many years where they get the comparable sales ceiling heights they do not answer or give vague answers like “from the market” or refuse to answer.
Any standard must start with the Assessors! That is where the agents and homeowners start and any standard must start there as well!
That’s right Jim, it all starts and ends with the assessor. And the assessor does not always do things the way people think. If the building department is busy they may field measurement at any time during or after construction, they may confuse plans and builders can forget or purposefully not share change orders which buyers request during construction phases. Then there is also general incompetency sometimes and I’ve seen homes hundreds of sq ft more or less than what people thought they were supposed to be. I run across a sketching challenge and inconsistent data reporting vs what is really there, about once or twice a year and it’s always a big deal when that happens, sometimes altering the course of deals and costing people tens of thousands of dollars. I mean good work explaining it but why bother.
I’ve already started entering GXX001 into my reports. I’m not sure if my sketches are ANSI complaint, and I don’t care either. ANSI is a standards institute whom has their hands in a wide range of other topics and interests. That group has carved out proprietary relationships and special deals across the spectrum from suppliers to construction companies to special terms via FNMA loans. The ANSI group utilized dozens of appraiser consultants whom the far majority of those qualified appraiser consultants recommended against this across the board ANSI blanket standard. ANSI ignored all of their advisement and pushed forward with this anyways. That’s on their own website and we detailed the links to the pdf docs containing appraisers objections in a previous thread. ANSI is a power player helping other proprietary interests corner the market in an obviously biased power play. ANSI and their underhanded plays do not direct my actions. The ANSI groups have ignored their own consultants to their own detriment and in doing so flushed a substantial portion of their credibility down the toilet. Talking about going metric to the tenths, reporting contrary to long held traditional reporting standards, we’re not going for it.
Hello Jim Where did you get your info that Freddie Mac does not require ANSI? Thank you
Kenneth, Freddie Mac selling guide. No mention of ANSI. Only Fannie Mae has announced the imposition of ANSI.
I am informing every Realtor that I know about this Desktop and ANSI situation. I am suggesting that the listing broker should have a comment it the contract additional provisions and the MLS. The comment could say:
“A licensed and insured appraiser must inspect the property. Nonregulated third parties will not be given access to the property.”
Good CJK, good ideas. I talked to a realtor about this just in the past few days. He was telling me the issue of non appraisers inspecting has become so bad that he’s even using prohibitions in the showing time automatic showing services. One good suggestion he had for other agents was to take a for sale home off of the automatic showing services lists the very same day that a contract is accepted. That assures him that regardless of who wants into the home after that, they have to personally contact the agent. I really like your specific language though, great comment, be sure to post that again and again and again, it’s great language.
Tell you what, if I’m going to have a desk job I want retirement, benefits, vacation, sick days, the works. I’m not going to languish with only desk work as a 1099. All FNMA needs to do in order to increase appraisers potential to complete more work, is stop the amc’s from stealing half of the appraisers income. Amc’s bragged about record setting business growth while simultaneously shutting down appraisers potential nationwide, costing us tens of thousands of new hires, pilfering well over a billion dollars of our now lost income in the process. The desktop third party inspector has been tried before. It was a gimmick then and it’s a gimmick now, regardless of the flashy new branding they are applying. This is an inferior work product, now with inferior non regulated third party inspectors to boot. It’s laughable and the only desktop I will complete is one which does not require an inspection what so ever. Going to start offering inspection review services! One could make a complete business simply backtracking everything that will go wrong with third party inspection services.
This is a profession gone already. It has become a gov Real Estate scam… looking for the next victim. Go and find something else
Penny auctions. There is nothing new under the sun and it’s all been done before. There is no such thing as a safe loan. Debt is dangerous. I’m going to kick it until the final minute of the final hour. Or maybe I won’t. Who knows and I’m not bothered by it.
This whole thing is bull crap and all the more reason appraisers like me who have been in the business almost 50 years are fed up and retiring.
Having taken and passed in class real estate appraisal classes in 1976 I know that it was standard to not include basement (walkout or not) because of lighting issues,ventilation and more recently radon gases. It did not appear as a difficult issue to follow because everyone was on the same page. it has only become an issue as bad apples started stretching square footage to include things like backyard storage units. Have seen 2000 squarebfootage homes advertised as 5000 square feet.
The new ANSI guidelines are a **itstorm waiting to happen; in NY the are so few realtors and agents who even know what a tape measure or a laser looks like let alone know how to use one. In my area I know of 2 agents who actually measure every listing the proper way, the other several thousand put whatever they want in the listing, including finished basements most of the time. It’s a PITA for sure measuring the new way, but I’ll do it because we are supposed to, but here is my response to am AMC who asks me “why is there a large discrepancy between the appraisers noted SF and what is found in public records?” I reply this; “the appraiser is not privy to the measuring techniques of the local assessor or any real estate person associated with this transaction, if the Client is concerned with any apparent discrepancy between the subject’s SF as noted in this report as measured by the appraiser and other prior reports or public records or current MLS listings, those entities should be contacted by the Client explaining how they arrived at said SF, please do NOT ask the appraiser to explain any possible discrepancies”. I never get asked again.
Except you are privy to that information. Building and design standards are part of the local jurisdiction’s public management package. Anyone and everyone whom hopes to construct or alter property in that area must know the zoning and coding regulations. Building size and space recognition and standards is in their code books, publicly available for all to see. Appraisers absolutely should be aware of how such discrepancy in county data occurs, otherwise we could accidentally mis match our comparative basis and apply unwarranted adjustments. Until the entire industry top to bottom adopts a uniform standard, it is the appraisers duty and ethical requirement to know or provide informed speculation how others came about their figures. If all that results in is they don’t know what they’re doing and are apparently incompetent, so be it, but you have to research the point anyways. Counting stairs or not, being probably the most obvious example. All this authoritarianism lately, you must do this and can’t opt out of anything, these are not professional approaches and we still request a voluntary opt out from FNMA on the matter of ANSI. Specifically because none of our local jurisdictions have adopted an ANSI method, or anything even remotely close to it.
“But in response to an AMC whom asks me”. I have identified your primary problem. Getting them off your back is of no consequence and is not an indicator of effective liability management.
In Maryland the discrepancy is easy to explain, the Realtors are instructed to use the assessors guesstimate.
The first year a residence is constructed, back to 1940s, the assessor measures the first floor. Then they multiply by 1; 1.5; 2; 2.5; 2; 2.5 etc for the number of floors.
Separately, they add cost for dormers, a set fee for each dormer is added from a cost book, a higher cost for shed dormers, the dormers are not measured, and not included in the living area square footage.
If a property owner adds an addition, 50% of the time it is not added to the square footage. It is tax free space. But in some cases, the assessor will decide, without inspection, that a faux window is a finished floor, see 1; 1.5 etc. The assessor does not come into the house to measure.
Finally, in around 2000, the assessors were told to add for all other heated space on the property. With no guideline for how to measure that space, they include it as the primary residence living area.
We had one property with a primary residence, 5,245 sf living area, and 10 cottages between 550 and 1200 sf each. With the last transfer, the Realtor’s listing had primary residence as 12,650 sf. No mention of the cottages. The Realtor used the assessor’s figure for finished space. The fun part was finding Appraisers referring to the sale as having a 12,650 sf house, and trying to adjust for the size or using it to value other large houses.
No matter how you measure a house, if you have not measured the comparables yourself, you are guessing. How about we use “S-1” tiny, small, medium, large, very large, and “S-6” huge, for comparison sake? Just like Q1-Q6. It would simplify the appraisal process, and make it easier for transformation of the appraisal process.
Then we can have fun arguing about How big is Huge?
Finally a breath of fresh air. I see no reason to suggest an accuracy beyond that which the data provides and particularly see no reason for a floor plan that Fannie Mae justifies as important because of functional utility. How many of you have been using the functional utility adjustment row lately?
Functional utility… It’s a house, capable of sustaining human life. Water, heat, air, toilet, walls, roof, etc. It’s not a barn or a dome or a hobbit dwelling burm home on the side of a hill. And you can’t glean much from a sketch either. It’s only after families spend time in a home they realize perceived functional deficiency. Like why is this hallway so narrow and only supports one way traffic? And everything else in the same price class has those narrow hallways. Unless we’re dealing with exceptional mis matches and such, functional utility is almost always offsetting. Can you imagine the office guy at the desk, looking at all these sketches, trying to imagine functional existence of the residents, hoping to scrape out a stipulation request. These new FNMA standards are utterly pointless. They’re just colluding with the ANSI group to force appraisers to buy more books.
Don’t ever let someone confuse an appraiser with an architect or IT guy, totally different careers and scopes of work. The FNMA scope creep is just entirely too much, on top of what was too much to begin with. I’m going through old workfile boxes recycling paper. We used to just scan in forms and worms pages with pencil drawn sketches and that was just fine. Wake me when it’s over. GXX001.
Where did the 700+ ANSI complaint posts go? Must have been a different thread. Oh yes, that was a lot of fun.