Solving the ANSI Measuring Dilemma
…a brilliant ‘work around’ to solve the subject & comps adjustment issues, which Fannie Mae thinks is no big deal…
Appraisers, I was chatting with an appraiser buddy last week about the ANSI measuring dilemma we all face when doing Conventional lending reports, which ultimately will wind up with Fannie Mae.
In my view, my appraiser buddy has a brilliant ‘work around’ to solve the subject & comps adjustment issues, which Fannie Mae thinks is no big deal, but we all know will cause considerable consternation among users of our reports, and with appraisers trying to figure out how to allocate measured and valued spaces properly, per market acceptance.
It’s the mandate that “a” particular measuring method for the subject be used, while the comparables have been ‘measured’ by “who knows what” method. By the way, while I’m on this subject, this only applies to ‘traditional’ appraisal assignments when the APPRAISER is doing the subject inspection. Not with Desktop or Hybrid reports. “How do you like them apples??!”
Appraisers may not know anything about the “who knows what” process was used, but for the most part, we accept that for our assignments because it has uniformity across properties. I’m referring to the local property Assessor’s process for determining and reporting sizes of homes in their taxation records. Or in some cases, it might be the local/regional MLS that keeps those figures. Use your data for your area. The point is, we appraisers generally use acceptable local data for our work, as we compare and ‘adjust’ various properties in our reports.
I’m in agreement that a common Standard should be the proper method used by EVERYONE in the residential realm to calculate the finished and unfinished areas, but we are not there yet. Just because one entity mandates the protocol does not mean that all other people or organizations involved with home building design, assessing and sales will automatically fall in line, especially since they apparently were not consulted about this early on. It will take years before this will happen. And I find it incredibly interesting and revealing that the three other significant “agencies” who are involved with using our reports for mortgage lending HAVE NOT jumped on board the ANSI mandate, as yet.
The problem that many appraisers are concerned about, is our report (used by ONE “agency”) will now be comparing apples to pineapples in terms of Above Grade (GLA) and Below Grade (Basement) figures between the subject and comparables. Reporting various areas that don’t meet the measurement standard for living space, but do have market value, are supposed to be indicated in the report and ‘adjusted’ on the separate lines below “Porch, Patio, Deck” on the form. Incredible confusion likely will occur, and may have already started!
The appraiser who discussed this ‘work around’ with me is a second generation Certified General, who’s been in the appraisal trenches for 20+ years. The appraiser is FHA approved and specializes in appraising unusual, atypical single family residential properties no one else wants to touch, for lending and private assignments. The appraiser has highly developed analytical skills, and thinks through situations carefully to solve the appraisal problem. Here’s the relatively simple ‘work around’ process:
For Conventional lending assignments, measure the subject using the ANSI Z765-2021 protocol, and report your appropriate Above Grade and Below Grade measurements on the GLA and Basement lines in the form. Fill in your comparable sales measurements info that you ‘rely on’ from whatever source you use in the correct form fields, but DO NOT ‘adjust’ those. Enter “0” for the ‘adjustment.’
Be sure your report contains the necessary ANSI disclosure language so that the report will comply with the Fannie Mae assignment condition, and so that you will comply with USPAP.
Then, and this is the brilliant part, use the last available line in the grid to show the ASSESSOR’s or MLS square footage numbers that you would typically ‘rely on’ for adjustment purposes, for the SUBJECT and the comparables. Put your adjustment amounts for each property in the appropriate form fields, across that last line. This works because the subject’s ‘assessment measurement’ will be done similarly to the comparables.
To do this you will have to include additional language in the report explaining your process. Secondly, you may have to build a spreadsheet to contain your adjustments for the Above Grade and Below Grade areas, so that you can use ‘one’ adjustment rather than ‘two’, and include that in the report Addendum, so that readers can see your process.
The last line can have the topic item shown as “Assessor (or MLS) AG/BG Measurement”. Drop the BG if the home does not have a Below Grade basement. Explain what these mean in the report, either on the UAD Abbreviations page, or in your Addendum, or maybe even on the 1004 form page 3 comment section that some appraisers don’t bother to use!
Some appraisers will grumble, saying that those three extra lines are already used. True. You’ll have to combine items on the first two lines for adjustment purposes if that’s the case, in order to implement this brilliant ‘work around.’ Just make a separate spreadsheet, or if you use one brand of software that has a built-in ‘worksheet’ spreadsheet that can transfer numbers in a particular field on the worksheet to the form field, use it.
The other aspect to consider is whether or not to use the Fannie Mae ‘Exception Code’ as the first item on the Additional Features line on form page 1. I’m going to say NO, don’t do that, for the majority of homes you will encounter. The ‘Exception Code’ is meant to be used on the screwball, non-typical homes that the ANSI Standard has severe trouble with in terms of measuring. Use that code only if appropriate.
Please don’t misinterpret what this ‘work around’ process entails. I am in no way suggesting that the ANSI Measuring protocol assignment condition be ignored. All this suggestion does is simplify reporting of data that you are used to using in the way you would normally use it. And it corresponds to data other users already have access to.
There is no requirement in USPAP or in the various ‘Guides’ or ‘Manuals’ that an adjustment must be made just because a line item is shown on the form grid. That’s why putting a ‘Zero’ on the “normal” GLA and Basement adjustment lines works.
This brilliant ‘work around’ process maintains your requirement to produce a “credible” report per USPAP, as long as you provide commentary for the process you use. As a positive note, it probably will help avoid angry phone calls from agents and borrowers (and lenders) who can’t understand the “other” ANSI reporting protocol that Fannie Mae is pushing on us, due to the confusion this will cause and is causing.
Dave Towne on e-AppraisersDirectory.com
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This is brilliant!!!
This is not brilliant, the optional lines are not recognized by CU. Using these spaces will automatically red flag the appraisal and assign a low score by CU. That is not what anybody wants.
That is insane. Before ANSI was required, did you use the tax assessor SF for your subject? I’ve always measured the subject and use my calculations.
Tres Kirkland yeah I’m actually doing nothing different than I did before in regard to ANSI
One of my major lenders is now requiring ANSI on all FHA appraisals. It is no big deal for me because I was measuring to ANSI before ANSI was even a thing. The only thing I had to change was the 5′ ceiling point, I used 6′ in the past. People who have been including the open air space on the second level in to the GLA will need to adjust. I am looking at a house that is a split-level (3 levels), the Assessor called it a two-story. Per ANSI the lower level cannot be included in the GLA above grade. The Assessor has all 3 levels together. So much for consistency. FNMAs computer generated report cards on our appraisals compare our SF to that of the Assessor, what a mess. Not only do I need to explain what I did, now they want me to tell them what the Assessor did 30 years ago?
It’s important to recognize that ANSI standards were presented for commercial a long time ago and they did provide some guidance for residential. As long as something was not more than 4 feet below ground, that space could be recognized as ‘ground level’. This appears to be what many municipalities followed.
I mean, get serious. If the garden level is ground level on the front side, and only a few feet of earth up on the rear side. And if the builders always provided that space finished. And if the finish is the same or somehow equivalent as all other truly above grade areas. And if this finished space contains essential home elements like fireplaces, bathrooms, laundry areas, garage door access, windows, sun, fresh air. And if the local MLS, building codes and municipal jurisdictions recognize this space as attributable to other above grade reporting. And if the spaces share the same heated air and are part of the same air cavity, not behind some basement door. And if nearly all participators in these markets recognize garden as above grade. And there is bonafide provable documentation these areas sell for the same as above grade. That’s not a basement based on a technicality.
That’s what these counter arguments deal with, technicalities. If that’s competent appraisal valuation service to you…
https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B4-Underwriting-Property/Chapter-B4-1-Appraisal-Requirements/Section-B4-1-3-Appraisal-Report-Assessment/1032992541/B4-1-3-05-Improvements-Section-of-the-Appraisal-Report-12-15-2021.htm
If the appraiser is unable to adhere to the ANSI standard they must enter “GXX001-” at the beginning of the Additional Features field of the appraisal and provide an explanation of why they were not able to comply. For example, the appraiser is performing an appraisal in a state that requires adherence to a different measuring standard. Such loans may still be eligible for purchase by Fannie Mae.
They messed up the guidance language. This should have also included: ‘the appraiser is performing an appraisal in a state OR COUNTY that requires adherence.’ Still though, the guidance is there, a county is part of a state. This appears to be workable to use the exception code, alongside proven documented links and excerpts from the LOCAL MUNICIPAL building codes.
https://blog.recolorado.com/residential-property-type-subtype-structure/
https://cdn.recolorado.com/files/collateral/Property-Subtype-Structure-Types.pdf
The above work around is sensible. But I agree with other posters, there is a technical review aspect of this which lends to more review alerts rather than less. There is no way to do the job competently if one has to apply different adjusts to the bas/below grade line. If you can’t use the automatic functions of the software you’re just asking for review headaches. If you apply a different adjustment basis based on garden vs basement in that same line, you’ve just confused the reader. If you apply a different measurement recognition basis to subject vs comps, you’ve just used different units of measurements which is a core failure of basic valuation comparison principals that drive up net/gross falsely in the process. If you scoot the adjustment to a line item that maintains the congruency and cohesion of net/gross but then in turn brings automatic review and CU errors for being outside the peer model. If you combine and accept this fallacy the garden level tracks same as a basement you’ve just violated FNMA ANSI FAQ 17 (not let this negatively effect value). And one is always contending with FNMA ANSI FAQ 16 on room count attribution with any given work around or if you answer that with one solution another problem such as falsified net/gross indicators comes forth.
If FNMA wants absolute control on uniform entries, they simply need to furnish a third line in the appraisal grid.
1. above grade. 2. garden level or partially below grade, also in many instances of split level housing this is called ground level gla. 3. basements, to include walk out basements.
Some appraisers, they seem to have a hard time grasping the concept that market reaction responses may be different in various different market settings. Just because a market standard is true in one region does not mean it’s also true in another region. In Colorado we kick around low ceiling spaces as being not very appealing. While in other areas, those are valuable spaces for home owners. In Colorado we value garden level the same as above grade. While in other areas, those garden levels do not seem to get the same attention and do not track for equivalent value.
What’s so hard to understand about this concept? Just because garden level and basement are sandwiched into a single line on the appraisal form does not automatically mean they MUST track at the same value basis, and reported the same, because that is simply not true.
Remember, ANSI is but another method to measuring improvements, residential and commercial, that include the more recognized AMS (American Measurement Standard), the Residential Measurement Standard (RMS), among others. These are all methods that most of us appraisers and market participants have used over the years. Our respective measurement methods should reflect the respective competitive market segment. This is why in part that 3 out of 4 national mortgage investors and insures have opted to NOT endorse any one method. And these various methods, including the ANSI method, are not defined standards except by their own respective principle interests.
Interesting and it makes sense theoretically. I have a feeling dashboard robot review will not accept the file when it sees zero in the regular GLA line. Mind you, I haven’t tried it. I don’t know how conventional lenders will feel about those adjustments in a report. They worry about selling the loan which is based on the appraisal and borrower.
Mary Cummins this was my thought. I just see them all coming back stating no gla adjustment was made
This option is misleading when the property does reflect gla, that the market accepts and is reacting to as gla. So, to report zero gla when there is gla, is not an acceptable reporting option.
Thank you Brent. This is an important concept in valuation theory. The only applied adjustments should be adjustments which recognize market reaction. To adjust otherwise is misleading, especially if it alters net/gross in a fictitious manner.
The counter point will be that net/gross is not altered with this ‘workaround method’. That’s true, agreeable. However the automatic review systems nor the laymen will be likely to get their minds around why such a work around was necessary in the first place. It’s like a step back to ‘off form’ narrative based valuation work presentation.
Somebody lend me their time machine so I can go back to the 1004 form original creation date and remind whomever to not bundle garden and basement into the same line when they are clearly two different types of home building space. Then I’ll bounce back to more recent periods and do my best to educate ANSI group on their own existing standards which recognize ‘ground level’ and the inclination of slope as being important concepts too. If only the whole world was flat we would not have this problem…
Well said Baggins, and a great reminder of yesteryear with the comingling adjustments practice – that does relate to this current ANSI method.
Funny the client I dropped stated to put the “extra” gla that does not follow the ANSI standard in one of the lines below on the grid and give the adjustment there. I replied back, how am I to determine the “extra” gla on the comparables I use when none of the assessors in my area of coverage use this standard. Didn’t receive a response back.
Koma, you held on for some time but bailed before this other thread really got just wildly entertaining.
https://appraisersblogs.com/ansi-measuring-standard-required-by-fannie-mae-in-2022
Agreed, how does one determine gla if the assessor does not provide tools to do so and the entire body of assessors to agents all follow local municipal building codes which defines ground level as including garden level? One could take a wild guess or drive up net/gross to falsely high numbers with the ansi applies to your subject but not your comps nonsense.
Tell you one thing, I learned there are a lot more ‘basements’ out there then I ever imagined. Which is why I wrote this short but colorful logic challenge story, and created this picture from a random be an appraiser photo I found online. Then I also detailed USPAP and how this may relate. BTW, ANSI just wiped out half of our USPAP guidelines in favor of jurisdictional exception via FNMA’s ‘mandate’. Do they even have standing to push a jurisdictional exception? Talk about cart before the horse, ANSI as a national mandate is it.
https://appraisersblogs.com/ansi-measuring-standard-required-by-fannie-mae-in-2022/#comment-34180
USPAP analysis.
https://appraisersblogs.com/ansi-measuring-standard-required-by-fannie-mae-in-2022/#comment-34068
Colorful short story. The day the appraiser member of the family lost his mind and insisted everyone call the living room a basement. And why you should be more afraid of basements than ever before. That’s where clowns live.
On 1.5 story homes is it OK to eyeball the roof line and based on the assessor’s footprint just pull the trigger on what you think the comparable sf is? Some Realtors are just taking the assessors first floor footprint and doubling it. Many Realtors do adjust the second-floor sf. down. That is what I have done sometimes in the past and that seems to be the simplest way to deal with 1.5 story homes. I do drive by the comparable sales every time.
The ANSI measuring standard was created around 1995-1996. Here in southeast Michigan, the Wayne county market, the majority of homes were built 50 to 150 years ago and measured by the city when new. Obviously the assessing data predates ANSI by decades and since most realtors rely on city assessing data in their listings (some just guess, but that’s another conversation) how do you make a square peg fit in a round hole. This is a prime example of what I call “Desk Jockey Logic”, rules promulgated by folks that never leave the office to experience the real world. Its like the great 1004mc form.
Yikes is all I can say. Way too much confusion here and the appraisal will be kicked in review numerous times. They will say why did you not make an adjustment for size variance. They will not read your outline or graph on why you did what you did. If subject has an addition or is measured by Appraiser at much more square footage than courthouse records show how do you reconcile variances between what you measured and what courthouse states in the grid. Lenders do use courthouse to see if your measurements are close which is ridiculous as we all know many courthouse records are inaccurate and nothing is better than your own actual measurements. So when I see something off in courthouse records and how it is adjusting against the subject and the other sales, I check other sources and call the Realtor and make any adjustments Accordingly based upon the data I get from other sources aside from courthouse. Usually I find the home is different in size than what courthouse shows when it adjusts out of sync with all the other sales. I went cross eyed trying to see how this is a brilliant idea so can you imagine the lenders, Realtors, sellers and buyers trying to make sense out of this?
Why be concerned about it at all? When the ANSI standard is required by law that all federal/state government entities use this method then I will use it. Hopefully by then I’ll be in retirement.
Only one client made this mandatory for all their reports, so I dropped them. I am currently bringing in more in-house mortgage lenders that do not sell to the big gorrillas. Also, been pushing hard with Realtors in my areas to have their clients use my services, currently do about one ever other month and hoping it will be more when the recession hits.
I’m wishing more of us would standup against this requirement because you know the only reason they are doing this is to get their AVM’s (in their minds) to run better. Might want to talk to Zillow about that…lol
Hence, the reason not to use forms. Forms encourage fiction and do not adequately address, accommodate and adjust for property differences. The fiction often pleases the reviewer and doesn’t rock the boat, and all is well right? not! Then the secondary market encouraged mass fiction is used by the secondary market as a gauge from which to judge/review appraisals. As a result, good appraisers are penalized for doing what is right. They have to do a bunch of post appraisal related stuff to attempt to convince the reviewer – who too often is not adequately competent to be a reviewer, especially if the subject property is even a little bit complex. I am aware of 1 case here where the correct appraiser was raked through the coals because he differed from several other incorrect (lazy) appraisers. Fortunately he was eventually exonerated – but at what cost. He should be compensated for his time from the: lender; the secondary market; and the other lazy appraisers – and not only for time spent, but a significant amount for emotional distress. One of many reasons we left residential mortgage work a long time ago was due to incompetent reviewers, as well illegal lender and real estate agent pressure to lie. We would entertain legitimate concerns but we would not lie.
I find GLA related ANSI standards to be overall a good method for measuring and calculations. If I deviate from ANSI it is discussed in the narrative report. The big issue I have is rounding measurements to the closest 1-foot, or 1/2-foot, etc. It can skew the GLA. If you have a sophisticated house with many measurements, this can greatly skew the GLA size, basement size, etc. We run across this often. I have asked appraiser’s about this, and their pathetic reply is usually “we don’t want to give the impression of an unrealistic degree of accuracy” In other words they are lazy. Professional Appraisal organizations used teach the concept of being as accurate as possible for each component of the appraisal and then rounding the value conclusion at the end. We measure to the 1/10 of a foot. For complex residences it can take a few hours to measure and draw. And I enjoy litigation situations where the lazy appraiser rounded to larger increments and their GLA is off. This is one nail in their legal coffin and usually indicates many more are likely.
I have spoken about this with many of my appraiser friends. And that was my big issue. Is that just because we have to measure with the ANSI standards it does not mean the comps are measured with the ANSI standard. Therefore, are we supposed to trespass on properties to measure comps? I think not!! And this is the most ridiculous thing I have heard in the 19 years I have been an appraiser. If a couple has a $500,000 budget for a house and House “A” has 40 sf of GLA than House “B”.. which house are they going to choose if they are the same price? They are going to chose the house that the wife likes. Happy wife, happy life. No buyer in my market cares about 10 – 100 GLA as far as a purchase price. That would only be relevant in New York City where the apartments/condos are extremely small and 10 additional sf would be relevant to the price of which a buyer is willing to pay. It’s completely assinine and I am not in agreement with any of. Furthermore, if you are doing an extremely large multi-million dollar home with a second and third floor are we suppose to climb on the roof to measure accurately? This entire thing is ludicrious and I amy start only doing private lending and skip any FNMA work. This is the worst regulation that FNMA has ever come up with for appraisers.
I tried something like this with a low ceiling area just this week and the underwriter did not want any part of it. I recorded the GLA of the subject without the attic area and each comparable as noted in the MLS but with a zero GLA adjustment for each. I then adjusted the total GLA below in the additional items area, it made sense to me and I explained the reasons for doing so as I think this part of ANSI is unreasonable and adjusting in 2 sections confusing to the Intended User, the underwriter shot it down.
It’s important to know how the systems like Mercury work, and how lenders have options to apply more or less than the fnma cu review may implement. There are literally hundreds of rules applicable which can be changed and altered in priority and lender response. Any of which any individual lender (or amc) can mark down to either be a warning or something which requires revision or further manual explanation. Have you ever got a stip saying explain this, and your response is; I did explain that, it’s right here, but they insist on a revised report anyways.
So when some upstart amc shows up and uses these systems, I think you all know what happens. They turn the sensitivity of hundreds and hundreds of rule sets higher creating hard stops rather than mere warnings. This is why it’s essential to review your internal warnings from your software thoroughly. Hopefully your software provider has comprehensive rule sets but as they pull these from fnma, most of them presumably do. Stip stip stip revise explain. They literally go off the automatic warnings and many don’t even bother reading the report or narratives in the pdf. This is the very essence of XML, creating the ability to map everything and apply a rule set to that for more efficient automatic review process. Get your mind around it, they don’t actually read your reports. We put in the narrative for the inevitable default which hovers somewhere in the just less than 1 in 20 reports in stable economic climates. All narrative in the days of XML tech equates to protection after the fact, nothing more, nothing less. Underwriter quotas have increased exponentially.
Additionally the automatic request side of the system which distributes requests focuses on less than you might think and rarely takes into account how well the appraiser provides liability protection for their clients. Your negative stats at one lender do certainly carry over to the next (star ratings). Which is why over time these systems tend to promote the worst but fastest appraisers and leaves careful narrative based appraisers in the dust. The entire system of tech integration into appraisal report development is one of backwards rewards. Creating an illusionary sense of quality assurance based on flawed misinterpreted metrics. As they take it one more step forward… Because you know, it’s working so well right now.
Yeah, I always run my reviewer and I really don’t have a problem with ANSI in general because I’ve always provided a good sketch with interior layout measured to this standard but I have a lot of 1.5 story homes in my area that I now have to pull this area out because Fannie now says that it is different. How so, the market does not see the low ceiling upper levels as different, they are just typical old homes. And I know that I can apply the same adjustment but I simply hate double adjustments in my sales grid.
You are driving up the gross adjustment indicator which illustrates dissimilar comparable selections, despite using apples to apples comparisons and model matches.
It’s simply flawed value analysis theory to apply one reporting standard to a subject, but be unable to apply that same standard to your comps. Many assessors databases around this country do not parse garden from above grade but rather take a different approach and recognize all those spaces as gross living area, different from basements. So they report garden and agla as one singular number. Often sketches if available may not even parse that data either. Specific building code definitions often takes into account perimeter volume of below grade area and as long as the below grade is not so many feet below grade, and the perimeter volume of below grade is of a certain minimum size and length, that area qualifies as ground level and the assessor just combines the space. That is the very building code that builders followed in those municipal jurisdictions. So it’s a common place building strategy through entire municipalities if such a definition is present.
As I said repeatedly in the other more tedious long thread posted above; Once EVERYONE ELSE adopts ANSI, it will be easy for appraisers to adopt that too.
But we’ll still need a third FNMA line entry for the three unique living areas.
1. Above grade. 2. Garden level. 3. Actually fully below ground basements (where the clowns live.)
So you’re the quarterback you make the call. Pick which standard valuation tenet you will violate if applying ANSI to your subject but not your comps. Or vice versa, you’ll still be violating something.
1. Drive up net gross with misleading indicators.
2. Scoot garden level to agla space as you normally would and be in violation of FNMA ANSI FAQ.
3. Scoot your garden to it’s own line item, drive up net/gross, confuse automated systems and suddenly get red flagged for being outside of the CU peer model for adjustment amount and previously entered peer data. Bearing in mind those room counts should still be attributable to agla areas, per FNMA ANSI FAQ #16.
4. Improperly co mingle your garden and actual basement which tracks with a different value basis, lose your ability to use the side by side auto adjustment calculator, confuse auto and human report reviewers whom have to reverse engineer your adjustments to figure out why simply straightforward mathematical calculations are not present.
5. Scoot your actual basement to a different line item to adjust it out as the lessor basis, while leaving agla and garden in grid lines for normal matching adjustment basis (why separate them in the first place if they adjust the same amount!)
6. Guess at the garden level space of comps to try and create the illusion of competent valuation approach.
7. GXX001 – And lose the confidence and work flow of your lender.
There is probably more but why bother…
Did I mention I am seriously afraid of basements? That’s where clowns live. I’m not sure how I’ll handle disclosing to people that we’re actually in a basement when they believe they’re in the garden level living room. Preparing them how I have to report these spaces to retain my lender clients despite all local standards, municipal guidelines, guidance from our MLS system, in an effort to avoid complaints when they perceive me as incompetent for having called ground floor living area with slightly elevated rear soil on a gentle grade a basement space.
For whatever ANSI solves over there. It creates just as many problems over here.
And when I bought the book the intro line was; this voluntary standard. Add product misrepresentation and false advertising to the list. I already want a refund.
I think the new guideline is the best idea they have had since the MC addendum.
Well, I never thought of it in that manner, you are absolutely right!
Strangely, I like the MC. It provides interesting basic stats on market velocity. Even if nobody required it I’d likely still use it.
Baggins….I love the MC form also, see we agree on something….I got so sick of doing reviews that the appraiser falsified the real statistics…just another reason the appraiser gods made us use them…All the changes “they” ( I know you hate when I say the appraisal Gods) made us do is because appraisers were NOT doing what they were supposed to do. Got to keep them clients happy….LOL….. and that is still an issue in our profession.
Same as making everyone use ANSI…. They had their reasons. Someday the realtors and the public will learn and maybe, just maybe we all will ave less headaches…..well you guys…..I am done……unless i need money, then I will come back and work for 4 months…..I like money…what can I say. After 30 years I need a break…we all do !
And thank for listening to my last post about my past, it was nice to think about the past….those days are gone, stolen from the appraisal Gods…and Andrew Commo that bastard….assistant in stealing our business from all of us and handed our profit margin to AMC’s, I had clients all over the county…now it just emails, no more personal with our clients….
Anyway, I still use the MC form…keeps us out of trouble if we end up sitting in a court room…you know how those lawyers are…..I hate them too….
In conclusion…you are stuck o these net/gross adjustments…..I never cared about them…screw them….The appraisal Gods got rid of that BS..so the loans could be sold…..but if you think about it, and i mentioned this to you before….If garden levels are the same as above grade, then you could use a bi level and compare it to a 1 story rancher, same size…..but we all know you cant…..and that is the reason for ANSI…….you might not be doing it that way, but others are. I have seen those reports…And the lender know better, that’s is why they called me to “fix” reports, did reviews discrediting the appraisal, wrote my own, came in even higher sometimes, still a loan, they made settlement,everyone happy happy. 5 years of them….hundreds of appraisers not knowing how to write appraisals…taught by mommy and daddy…its that simple
And that is the real problem…we all know the difference…….We are appraisers…we have intellect we have reason, we have critical thinking skills…..at least WE are suppose too…some of use more then others. Don’t matter what assessors say or MLS, realtors…blah, blah blah….
Fill grid as you normally would, print to pdf after completed.
Use lock field over rides to be able to put zero’s in all agla and basement lines where the adjustment amount goes. Replace all size of home adjusts with zero’s.
Copy your original before ANSI size statement in 2 lines down to 2 lower line items, subject and comps, place the size adjustment exactly matching your original grid there instead.
Leave room counts and room adjusts normal and do not change, your subject basement and agla are now changed to be ansi compliant, it’s size changes but the adjustments do not, because you restate your not ansi size below, and that’s what you’re adjusting for.
Post your original 1004 as pdf within report for clarity, clearly label it as not ansi compliant version 1004 or something like that.
And that’s it, net gross exact match between reports, so do bed bath adjusts, no juggling adjusts back and forth or confusing methods, no false drive ups of net gross.
Subjects size reads different between the reports. Report your market recognized size like you normally would first report which ends up being just a pdf and is the basis for market recognized adjustments and statement of size. Then alter size statement of the subject only on the second report for mandated ansi compliance. All comps size readings are not ansi compliant, and their size statements never change between reports, presumably which is why you’d need to do this.
Two reports to look at for review, exact same net/gross and exact same value conclusion and most of the text. Subject becomes ansi compliant on second report and with field lock over rides and zeros you can also have zero uad errors. You will get many new size difference alert adjusts but by stating market recognized size in lower lines those can be disregarded as irrelevant.
Baggins…..You are one of a kind, my hat is off to you….I love a man who sticks to his principals….Ok, Respect my friend !!!….I do think you are a little crazy…but hey….aren’t all of us appraisers a little off??? LOL
Add a 2nd report to the appraisal…man that is thinking outside of the box !!! Well done !!!!
Thank you Chris. I’m here to serve. The methods that took my appraiser parents around the world, often don’t take me around the block. But I’ve accomplished my primary goals in real estate; We navigated the market, have a positive position, and my girls never spent a single day in day care.
Define the appraisal problem; ANSI mandates, yet the local market does not recognize that. Define the appraisal solution; Use two 1004 forms within a report for clarity and a big thumbs down signal to whomever at FNMA believes in mandates and does not respect voluntary engagements.
I also researched assessors groups, IAAO, could not find anything on ANSI, other than old commercial standards references. There was however, a consistent theme of matching units of measurement, adherence and knowledge of local jurisdictional guidelines, and statements on the need for highest level of competency for legal reasons.
Now go back to being all mean and stuff, I like it when everyone is riled up! O’Reilley!?
Baggins…LOl this too will pass…..the needs of the many out way the needs of the few…or the one…ANSi is long over due……like I said before, we were told 15 years ago, anything below grade has to be reported as below grade….not valued as below grade, just reported.
You have a great work around….i think its unnecessary but who am I , just an appraiser retiring at the age of 56……hmmmmm. LOl my friend…..this too will pass…..
The literal interpretation of above and below grade which disregards the ‘ground level’ concept is yet another example of tiny minds seeking to comprehend systems too complex for their personal comprehension abilities.
I said it. And I meant it. LOL!
In a governmental system where each person has inalienable individual liberties, that needs of the many vs the needs of the few concept is not applicable. We do not live in a democracy. We live in a republic. Or perhaps the concept should apply, and we should wipe out the entire lgbtq activism front, and the entire welfare apparatus, as those do not represent ‘the needs of the many’… You’re the quarterback, you make the call.
This ANSI crap is getting out of control. Appraisal on a 720 sf home – a basic box – 20 x 36 – I have a comment that I used ANSI methodology – was that enough? Nope. I got this request: ANSI – Please state the above and below grade statement of finished square footage
ANSI- Please comment on the whole number measurements as ANSI requires measurements to the inch or tenth of an inch – I responded that I’d addressed this in the original report and added a comment that I did not round any measurements. Still not good enough. They want THIS!!! Please provide a more specific ANSI comment.
Per ANSI, please include a statement of finished square footage and report the above and below grade area.
An EXAMPLE of a Statement of Finished Square Footage of a detached single-family house with basement follows:
“A 28.2 x 42.5 ft. two-story detached single-family house with 2,201 above-grade finished square feet and 807 below-grade finished square feet, plus 96 above-grade unfinished square feet in a utility room and 392 below grade unfinished square feet in a basement. The first level has a 100 sq. ft. two-story space. In addition, the property includes a 240 sq. ft. enclosed porch and a two-car garage.”
I followed up with a snarky addendum stating that the first page of the original report states the above grade gross living area which matches the appraiser sketch and the page 2 grid section also contains this information for the reader.
That’s one of the reasons I don’t do reports with that requirement. Good luck with that!
Seems like they’ll be pushing appraisers to use that code more and more often with their out of control, well, you know…… control.
Good morning, is there an example of how to complete this type of afore mentioned ANSI work around? and an example of the addendum that describes the appraiser steps? I have a question regarding ANSI reporting of an unfinished second floor bedroom. The walls and ceiling are just bare drywall which has not been mudded/taped/painted. Would this be left out of the ANSI measurements?
Yes, The area must contain walls, floors and ceilings of materials generally accepted for interior construction (painted drywall, carpet etc.)
Finish quality is not the same thing as house size. Apply a market reaction adjustment for the quality of materials and finishing in one of the free lines or the C line. That would be tied to the real world costs of finishing the space to expected market standards, materials and labor. That’s a comparative value sort of consideration. The size of the unit would not change.
Even a home absolutely trashed and uninhabitable uninsurable still gets full space credit as being what it is, an entire home or living structure. Then it receives a substantial negative adjust to account for a complete rehabilitation project, as well as an additional discounted value amount to account for investor incentive.
For less significant considerations like a lessor portion of a home being unfinished or perhaps something like one of the bathrooms being non functional or an incomplete refurbish project, drywall not finished all the way, just estimate cost to finish then apply that amount as a negative line item adjustment.
In the real world constructed space is constructed space and the quality of finishing or lack there of is merely a factor which influences market value and price, but does not change the size of the property. If there is an issue with ‘qualified space’ via ANSI rules, just credit that space in a line item instead. A home does not need all the exact finishing to be habitable. It just needs a basic minimal level of utility functionality.
‘Generally accepted for interior construction’… Some people have higher standards than others. It’s a non issue.