Appraisers should have a basic understanding of residential electrical, plumbing and building codes. Or at least have a way to research them…
While reading the National Appraisers Forum on Friday December 4, 2020, I found a post contributed by California appraiser Craig Gilbert, who provided this link to building codes in each state.
Over the years, I’ve seen numerous appraiser comments in various places stating that
I don’t need to know anything about building, electrical or plumbing codes.
Well, I hate to be the Grinch who stole Christmas, but I disagree with that perspective.
Appraisers should have a basic understanding of residential electrical, plumbing and building codes. Or at least have a way to research them, such as the link above. Maybe even have a friendly relationship with the local building inspector who can answer questions.
I constantly see questions posted by appraisers unsure about the need for deck railings or stair handrails.
Here’s a “case study” to ponder:
Small home sold, marketed as being a ‘three bedroom.’ You get the appraisal assignment. During the interior inspection you notice a room with a single bed and a dresser in it, with an appropriate size window which could be used for emergency egress. Room appears smaller than ‘normal’ so you whip out your laser measurer and find that the room interior is 7.0’ x 9.0’, or 63 sq ft.
Is this a ‘legal’ bedroom? The answer is below (per WA State, but might be the same in others).
1208.3 Room Area
Every dwelling unit shall have at least one room that shall have not less than 120 square feet (13.9 m2) of net floor area. Other habitable rooms shall have a net floor area of not less than 70 square feet (6.5 m2).
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What a shallow, misleading article from the king of “limited perspective on the world”. No. WE DO NOT NEED TO KNOW ‘BUILDING CODES’. What we need to know is basic building PRINCIPLES that are common and accepted in our market.
I cover 10 counties. Just in my HOME county, which is suburban, there are 19 municipalities. Combined with the unincorporated area, that’s TWENTY sets of legal building “codes” that I would have to be familiar with – JUST IN ONE COUNTY. The idea that that is what should be expected of an appraiser is absurd. I’m certain Mr. Towne gets many questions about “handrails” – have you stopped to consider that this confusion is caused by former rules from FHA and others regarding handrails and not “building code” requirements for handrails? I would bet 50% of FHA appraisers don’t know if FHA requires handrails or not and in what circumstances. Not to mention VA and others. It would be nice if these articles cited SOURCES and FACTS instead of just another uninformed personal opinion of a single, mildly-informed appraiser. For example, let’s say that third bedroom isn’t “legally” a bedroom by the city building codes where it is located. The MLS listing will have to do some wordsmithing about calling it a bedroom (“extra” room, “non-conforming bedroom”, etc.) but if buyers DON’T CARE particularly about building codes (few do)- and give the same VALUE to that room as if it were a third bedroom – isn’t THAT the important factor we as appraisers are supposed to measure? Call up any buyer of the last 3 comps you used and ask them – “did you consider if the house you bought met all local, legal building CODES before you bought it? Did that affect your offer?” and see if you get a yes – I doubt it.
All that said – does that mean we “ignore” everything to do with safety, soundness, etc.? Of course not – we have 2 eyes. But when you start quoting “building codes” in an appraisal report it makes you RESPONSIBLE to a set of LEGAL standards that NO appraiser, anywhere in this country is qualified to answer for their entire market area.
“An appraiser is a professional who determines the market value of an asset such as jewelry, art, gems, family heirlooms, and real estate. All appraisers must act independently of the buying and selling parties, and their opinions must be unbiased.”
The author is grossly mistaken about suggesting appraisers should know building codes (as usual he taps dances around the actual wording). An appraiser is NOT a contractor. An appraiser provides an opinion of value.
So much of what this author writes is so wrong.
Use your own good common sense. Do not over step your boundaries as an “appraiser”. You might be opening yourself up to legal action.
I’ve seen Realtors list rooms as above grade bedrooms that were in no way bedrooms such has basement rooms, closets, rooms that you need to walk through to get to a garage. Why don’t Realtors have to worry about building codes. Funny how appraisers make the least on any closing transaction and have the most to lose.
An understanding of building codes is very important. usually the National Building is a guide for all of the local building codes, and their are many variations. however updates modernizations, local idiosynchronies effect the:
depreciation, cost approach, remaining life, highest and best use, both as is and as vacant.
Building codes are a tool of the society used by many to promote safety, labor employment etc.
Our individual judgment is affected by which year of codes are complied with in our subject as and age-year built interpretation. Don’t discount Building codes!
Building codes are “valuable to society”. Thanks Captain Obvious. The issue here is not whether we “like” building codes or perceive they have use in society. It’s whether an appraiser should be required to know and determine if a property they are appraising violates building codes in every instance. Should an appraiser know the dozens of “local variations” to the national building code? (and there’s more than that?). Since the cost approach is rarely if ever the primary approach used for a residential appraisal, explain how “code compliance” is going to impact the cost approach. You mention highest and best use “as vacant”- perhaps you are thinking of ZONING codes and not “building codes”? I hope you are not an appraiser, if you are, please read up a bit before responding.
Would an appraiser require railings on a deck higher than 30″ for a conventional loan?