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.

Yes, The area must contain walls, floors and ceilings of materials generally accepted for interior construction (painted drywall, carpet etc.)

Seems like they’ll be pushing appraisers to use that code more and more often with their out of control, well, you know…… control.

That’s one of the reasons I don’t do reports with that requirement. Good luck with that!

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.

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.

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…..

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…..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 !!!!

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….

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.

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.

Strangely, I like the MC. It provides interesting basic stats on market velocity. Even if nobody required it I’d likely still use it.

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.

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.

Well, I never thought of it in that manner, you are absolutely right!

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.

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.