Please also consider the fact that the sunroom now has 24 years of physical deterioration. I’m assuming that the windows, etc. have not been replaced. What is the expected economic life of the components? Obviously I’ve not seen the property but these are things to ponder.

Andrew the easiest way to answer that is to ask if the local building department ever issued a certificate of occupancy and final sign off on the permit.

No permit. Not GLA. No certificate of occupancy for year-round living area-not gla.

Thanks

I get it Chase and feel your frustration, but with what you’ve disclosed, it seems cut and dry that if it’s traced back to being a known sun room, it’s a sun room and not traditional GLA. I know it won’t make you feel any better, but locally our public record files almost always mistakenly adds basement area into the GLA, and or guest house area (attached or detached) into the GLA. As the appraiser, all 3 areas would need to be separated out (like a sun room), and valued accordingly.

Good luck.

Chase I was all set to try and find an exception fitting your contention. Nope. Google sunrooms. Look at high-end California models. $5,000 to $10,000+- for best. 400+-SF at $10,500 = $26.25/sf. You need $65.84 for your ‘target’ $16k (something else appraisers don’t do is try to hit targets).

They are not under the same original roof and are clear add ons from all the pictures I’ve seen. Nice features but no the same as a living room or original-built included-inside family room or great room. Check ads for them in your area with all the specific features you have and see what cost is. Even that’s only half the battle though because the cost does not necessarily equate to par value. Good luck.

The home has been finished that way since 1995 and has appraised at over 2400 sq ft ever since. I have copies of the last two appraisals which were 2414 sq/ft GLA and 2428 sq/ft GLA which included the sunroom. I am on the fence about just selling the house with the lower GLA and pursuing legal action against the appraiser from when I purchased the home. My appraiser valued the sunroom at $87 sq/ft. The new appraiser listed it separate at $7500 which is a 13000 difference.

Good luck.

Thank you again, for all of your generous knowledge! You’ve given me enough to work with and I now know where to go from here.

1) I’m definitely sure she undervalued. We had the house appraised 1.5 years ago at 950k for our HELOC and she appraised at 880K, after a huge construction project. We live in south Orange County, CA. Property in our area is not depreciating.

2) The legal document I’m referring to is the original county assessor’s sheet I obtained from the county off the microfiche. We needed it for our recently completed construction project. From the county I was told this was the worksheet used by the county to assess and inventory the house as built.

3) I need to submit a correction to the appraiser because she said it was a 2 car garage but it is clearly a 3 car garage (she even took a photo of the single plus 2 garage) and I will include my reasons for WHY I believe the property is worth more in that same letter.

Thank you again. You have been generous and kind in your expertise.

Erin

The fact that you say the basement was originally approved as a basement and my knowledge of Southern California hillside building schemes over the past 35+- years tells me the basement was not build as living area. IF it became livable area later then I’d simply have to see the documents and permits you are referring to.

As for “County records.” Assessor records used to be made available by buying electronic tapes of COunty records. The convention was (in most counties but not all) to report SF of Living area-though usually calculated to mean area under the main roof for single-story houses.

Since CoreLogic took over most commercially available sources of public records out here, most appraisers are pretty much forced by economics and time constraints to use their data. Recently they started reporting conflicting data. RealQuest (CoreLogic) by subscription reports GLA and lately MAY ALSO report GBA (living area plus all other structural areas); Realist, CoreLogics MLS accessed public records service that we also use MAY report a GLA; a different MLS undefined SF and maybe even GBA. Appraisers are left to use their knowledge of standards and local ordinances in calculating GLA. It can often be wrong because too many do what you had hoped they’d do for you – include non-living area.

On top of that some cities have bowed to developer and broker pressure to ‘allow’ below grade non-living areas to be reinterpreted. Further confusing this is the upsurge in non-standardized ADUs.

The living area should still be dictated by local code and development standards as evidenced by the certificate of occupancy (also lately less reliable).

In answer to direct questions – YES, all improvement area should have been considered and addressed in replacement cost scenario. Personally, I’d have done it by Size and costs per sf. Others may do portions as lump sums. Is the result going to be a definitive universal amount and size? No. Not unless you have blueprints and finish schedules it won’t.

As for “asking for credit as one way versus another” the property is what it is. Let me repeat that. The property is what sits there legally. Without game playing or reinterpretation of codes. If all areas were not included then there is a reason to suspect the appraisal may have had deficiencies. IF that is the case it is OK for your lender to order a new one. This time instead of allowing them to have their AMC shop for the cheapest appraiser around, you may want to encourage them to shop for the most competent appraiser around. Be sure to provide ALL your findings and research to that appraiser (don’t selectively withhold).

It is ok to explain WHY you believe the property is worth more than it was appraised for. Do it in writing and DO NOT SAY we think it is $XXX,XXX; OR that we think it was $100,000 low. IF you provide good legitimate sales data that should be apparent to the appraiser! (Not merely higher, dissimilar sales).

You have to also consider the possibility that it is worth what the appraiser said it was.

Thank you. This is very helpful! I’m getting a real education in ADUs and basements!! We essentially have 3 levels, the first being the garage, the second the basement and laundry room and the third the main living. To make it more interesting, it is sort of like a split level. When you enter at the front door, you are halfway between the main living and “basement” level. So from the entry foyer you walk up a half level to the 1st floor or down a half level to the basement. I have the original county inventory records and they call it a finished basement and 1st floor (main living). The original inventoried sf from 1974 showed 554sf (total of laundry (small bathroom was just added 1 month ago so sf has increased) and basement) at the basement level and 1905sf on the main living for a total of 2459. 2459 is still the amount shown today on the county records for total sf of our house. So that means the county is including the finished basement in their sf – but does their sf represent GLA? County also inventoried the full bathroom, laundry and family room (with wet bar) and the fireplace, on the basement level. For the “family room” they are referring to our current ADU. With all that said, I have a few more questions that might hinge on the info just presented.

1) I was unclear about the laundry room and wm. When you go down the steps to the “basement” level you land at a foyer, to the right there is a door that used to be the entry into the ADU. The tenant has a stackable wm/dryer unit on the other side of the door; therefore you cannot enter the apartment. You can open the door but look at the back of the tenant’s stackable. To the left of the foyer you enter another door to our full laundry room and a separate toilet only bathroom. The sf of this space is 270sf and the appraiser gave us gla for this which is on the same level as the basement. So if level is the determining factor, how did we receive sf for one and not the other? Is it just that it’s not accessible?

2) Would we be better off to ask for credit as a finished basement instead of an ADU? If it were a basement, would we get credit for the full bathroom and fireplace?

3) On the cost basis calculation, she only considered the gla and the garage (non-gla) and totally left of the 408 for the basis. If the cost basis represents the cost to rebuild, how can she leave off 408sf of the first floor of my house? Again, the ADU is not underground.

Thank you again for your help! I really, really appreciate it. We are trying to refinance a HELOC and our current loan into one loan and this appraisal just stunningly blew it out of the water. She came in 100k less that what we thought.

Erin

Erin, we invented the four-story 2-story house on a hillside in CA. It wasn’t ‘built’ with a downstairs mother-in-law quarters. (Let’s not confuse it further with split levels since that is a whole new area of standards and considerations). That is just the name someone gave the basement. (The fourth story when present is a mezzanine or loft area that years ago would have been considered about the same as a finished attic; definitely a nice feature, but not GLA. I never had a problem (subject to quality) addressing these honestly and accurately as below the line (basement in the old days) other areas that MAY be at same value rate as actual GLA. It’s actually FNMA itself that has caused the current era of confusion about them.

In your case, you obtained permits to have it legally converted to an “ADU” (whatever the hell those are supposed to be defined as today), so imho it is now other ‘livable’ (habitable) area but I would NOT include in GLA on an SFR appraisal. The fact that access can only be obtained by negating the intended use of the laundry room is quibbling. Creating a functional inadequacy to list one area as GLA results in negatively impacted value for the other area. The ADU (a non defined term that should never have been accepted into appraisal jargon) may well be worth 100% the same as your other regular GLA but it is NOT intended as a living area for the primary residence. The original development permits did not call the house a three-story or four-story. It (guaranteed) is called a two-story residence for a reason. (IF you were an income property, I’d consider it as rentable area).

This is a case where the FACT of the RE Characteristics don’t fit the one size fits all FNMA forms (especially under UAD).

Whether your particular appraiser properly adjusted is another matter. You didn’t ‘lose’ a 408 sf from GLA – it never existed as GLA so your financial loss analogy is erroneous. Now IF that ADU area is finished to the same quality and finish (SAME – not subjectively ‘close’) then it stands to reason it should have about the same value – not net negative. If the quality is lesser than that above, then it should not contribute the same on a price or value per sf basis-normally. Also on a CALIFORNIA property what percentage of the overall value was $3,000?

The city planner that told you to ‘drop’ adu status for it to be gla doesn’t know his rear end from a barn door. For more on, this read Horrike VS Coldwell Banker in CA courts. (Malibu property with an extreme example of what you describe). Built as 2-story per plans and city code. NOW city and all concerned claim basement level is gla CONTRARY to the original permits and plans. THIS case is probably the poster child of why we need very specific standards in labeling living area. It used to be clear from plans, permits and code before FNMA and agents started muddying up the waters to deceive buyers.

Recently, we had an appraisal and the appraiser removed the 408sf ADU from the GLA. The laundry room off the ADU is counted (same grade) but the ADU is removed. On the one comp she added 25k for the ADU but subtracted 28k for the loss of sf, fireplace, bathroom, and bedroom. So we ended up neg 3k. Also, there was no math for where she came up with the 25k. She found 1 comp that had an ADU which she cites in her report but then ended up using another comp as her mostly sole comp. I’m baffled and frustrated. The city I live in told me when I got the permit, that all I have to do to “remove” the ADU status is to simply stop using it as an ADU. So, can I just “decide” it’s not an ADU and then have it reappraised? Why have any ADU only to get penalized for it?

PS – if that gated entry area (‘breezeway?’) is the area in question unlikely it is GLA as one has to go ‘outside’ to pass from one side to the other. I just can’t tell where living area starts or stops form picture though.

Marylyn I still don’t see the appraiser’s measurements tied to a specific picture so I can’t answer your question. Interior photos all look great and quality appears to be consistent.

There are a number of possibilities: The appraiser COULD honestly just be wrong. Your other data on size could be wrong. MLS is notoriously unreliable for size reporting. Zillow? Why are you wasting your time (or anyone else’s citing one of the least reliable data services in America?).

Local custom may also enter into it. In California, we used to have so-called Florida rooms or sunrooms that ranged from clearly identifiable screened in areas to pretty high-end glass-walled additions. They used to be categorically outside GLA. Now it is more quality related and subjective. What does the Certificate of Occupancy for your house show? Building permits?

Again, the only thing I can suggest to you is to obtain a competent review appraisal and require specific attention to measuring size. Let the reviewer or new comparative value appraiser know exactly what the issue is. As you describe it, it appears the size could be understated but I’m 3,200 miles away so how could I tell?

It MAY something as simple as no visible air conditioning or heating vent in the specific room. “Shares all utilities” is just too ambiguous”. We can play guessing games forever but until you verify specifically WHY the 407sf is excluded then that’s all we are doing…guessing. Get the lender’s permission for the appraiser to discuss the specifics with you, and then ask the appraiser to explain because you think he MAY have made a reportable signficant error that had a substantive impact on the conclusions. He’ll know what that means.

If I had a 407 sf error alleged I’d be happy to have the opportunity to correct it…or the reassurance that it was not an error, and an opportunity to attempt to explain the reasoning to you.

For what it’s worth we don’t simply “get to pick and choose” as you state. We are OBLIGATED to use the information source that we deem to be most credible and reliable. If your state (or County) has a reputation for taxing at builders stated SF instead of per plans and ANSI measurements, then the appraiser would NOT deem them to be credible.

Is a 407 sf error probable? Who knows. I can only say it is possible. Larger, more articulated homes like yours can have blind walls and other difficult access runs where measuring is hindered. Sometimes it is an owner himself that hinders accuracy. (I NEVER measure inside first unless an owner insists to the point where I have to consider withdrawing from assignment-some owners that unthinkingly JUST WATERED their lawn before I get there aren’t crazy about me walking outside and then inside). It’s very difficult to use interior measurements on larger houses like yours.

Bottom line if the source of discrepancy is not positively confirmed, then ask if he will remeasure it. If source IS known, then call a few local appraisers up and ASK them how they would treat it.

Nationally renowned appraisal expert & educator Hamp Thomas wrote a great article in Appraisers blogs on this topic. Here is the link to the article and to the standards discussed in it. http://appraisersblogs.com/appraisal/two-measurement-standards-ansi-vs-ams/

I thought I replied to your comment but I accidentally made a new one.

See below, thanks!

The seller purchased the property 4 years ago and did not run across this issue so I’m still confused how it sometimes is included and sometimes is not. The 407 sq ft shares all the home’s utilities and the condition is equal to the condition of the home, fully finished space. How is it that the county appraiser’s site and MLS list the property as 2891 sq ft? I’m paying taxes on 2891, cooling 2891 sq ft, maintaining regularly 2891 sq ft, so when it really matters in the appraisal, it doesn’t count? If that’s the case then it should be reflected everywhere. MLS should not list it as 4/3.1, but as 3/2. It would be listed at 2484 sq ft not 2891. I have trouble with the fact that the appraiser can pick and choose, and I don’t claim to know anything about appraising, I’m just taking a common sensical approach. The appraiser valued the property at $258/sq ft. At that value, we’re at $650k. If he included the 407 sq ft he left out, it make a huge difference in value. Even if there were a middle ground that made sense I could ask the seller to entertain it but why would the seller give up $80k if the next buyer’s appraiser would include it in the appraisal?

CMA was done by the realtor and it came in a couple thousand under sale price. That was the first thing she did.

If you’d like to see photos of the property here’s the link: https://bit.ly/2YAm8Ux.

Maybe that would help.

Breezeways are not typically considered living space. Of course, the devil is always in the details. I didn’t see it so I don’t know if the term “breezeway’ is an enclosed hallway type addition with an entry door at both ends (not really living space); or whether its really more of a 20 x 20+- room connector. Is it a slab built connector attached to a raised foundation sfr on one end? Is the equality of construction the same or better than the original house it’s attached to?

At $80,000 ‘off’ on the price that breezeway would have to be something really special to be worth $196 a sf (adjustment). I’m not going to second guess an appraisal I have not seen.

It’s very possible the appraiser is saying “contract can be written for any cash price the buyer and seller want; but if they want to finance this house they need to know it is worth $80,000 less based on current appraisal standards and market value definitions.”

You can always hire a separate appraiser to do a formal field review of the first appraisal. Cost should be from around $450- $750 depending on property complexity. A good reviewer is not likely to be at the lower end of the range (in my opinion). Disputing the results without a professionally prepared review in hand is not going to likely prevail. Getting a cheap desk review isn’t much value either. Why not ask the listing and selling agent to try to support their own listing? Where is their CMA. IF they never did one before listing the property, that may tell you something. Good luck.

IF the review and original appraisal both say MV is $80k less than you believe, then respectfully you are likely incorrect; & the seller is the one that needs to rethink their position. If the first appraisal is significantly in error then you have a right to insist that a valid appraisal be done – you paid the AMC for one.

Hi Mike. I have a similar situation. Purchasing a home with a separate bedroom, full bath and kitchenette are separated by a breezeway. It’s 407 sq ft of Living space. The two areas share a roof and ac/heat (if we ever use it in Florida). The appraiser is not counting the structure in the appraisal and we are in deep trouble here. The property under appraised by $80k (if the 407 sq fit was taken into account, it would have appraised at about the sale price). I understand appraisals are not one size fits all but if I’m paying taxes on 2891 and regularly using 2891 sq ft, why is the appraiser omitting the 407 sq footage? Is there any way to respectfully dispute the appraiser’s findings? And why is it that some appraisers will include all courtyard home sq footage and some don’t? Seems like a nightmare to appraisers and sellers/buyers alike. Any help would be appreciated.

Wow here too! Sorry for making a Joke or attempting to in 2015. Don’t even start on “peers” .