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Bobby, Home Owner in Falls Church, VA

Appraisal of a home without a Basement

Asked by Bobby, Falls Church, VA Thu Nov 24, 2011

I recently had an appraisal done, all the comps used where based on houses without basements,
Most of those comp where not as similar as other houses in my area,
Are the basement comparable more important than the SQTF and number of Bedrooms and bathrooms?
when all houses with the same SQFT and number of rooms are much higher in value and more recent in sale dates.

Thank you,

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Great question... Welcome to the imprecise science of real estate. The appraiser should have used at least one comparable with a basement to substantiate his adjust for homes without a basement. It's my opinion the homes without a basement should not be used as comparables for a home with a basement except as a last resort. The adjustment is subject to a wide range of features. In Falls Church: is the basement a full height basement (8ft ceilings) or cellar (7ft or less), was the basement finished, what was the quality of the finish, was there a full bath in the basement or a half bath, is the basement dry, wet or humid, is the basement a walkout, walk-up, or buried with no exit, English basement, recessed lights, sump pump, bedroom with an egress or a den with no egress. Every factor is more important. Above grade sq ft and below grade sq ft, basement or no basement, both should be factors to determine value.
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0 votes Thank Flag Link Thu Nov 24, 2011
In Northern Virginia Between Springfield & Spotsylvania, it's a simple calculation for comparing homes without basements to homes with basements. A standard home with 2100-2400 finished square feet will have a footprint which usually offers a price increase of no more than $15,000. We've witnessed several appraisals value this between $10K-$12K. For homes with larger square footage you can expect no more than $20,000 added to the appraisal. During the real estate boom (2004 to 2006) you could expect finished basements to add dollar for dollar value added to finished square footage (example: 20K basement upgrade was worth 20K for appraisal purposes). But the slide in the housing market and economy has appeared to bring caution to the appraisal process. The finished sq. ft. value below grade is not equal to the value of finished square feet above grade, and it is no longer an even investment to upgrade living space below grade.

Appraisers focus on above grade living when offering a value assessment (amount of fin. sq. ft., number of bedrooms & bathrooms, garage, lot size, interior upgrades, similar styles, floor plans, and age of home). The properties used to compare value to your home are ideally selected from the same subdivision. But the process is as simple as using the closest 'like properties' as possible. For homes in rural areas, appraisers try to keep comparable properties within a 5 mile range. All homes used in the appraisal process will try to compare closed transactions within 6 months. In areas of heavy population density the time-frame is usually 90 days, and closest is always best.

Dwayne and Maryanne Moyers
Serving Northern Virginia
Avery-Hess Realtors (Lake Ridge Office)
Managing Broker & Realtor
Top 2% of Realtors Nationwide
http://www.themoyersteam.com
http://www.NotYourTypicalRealtor.com
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0 votes Thank Flag Link Thu Nov 24, 2011
Hi Bobby, Happy Thanksgiving!

Just as Ron said, all factors, every detail, play a part in the appraiser's assessment of the house. Certainly it matters if the appraised house has a basement or not and the houses used as comparables to that house need to be similar for multiple reasons. As I'm sure you realize the difference in a 2-level versus a 3-level house is significant. Should there not be exact comparisons the appraiser will make adjustments for differences in features and square footage.

Did you have an appraisal done for info only or for refinancing? Are you considering selling your home? If you would like more information or help with exploring the details further I'd be happy to assist. I can provide you with a Comparative Market Analysis which may shed more light on the market value of your home, if that's what youi're looking to find out.

Please be in touch if you'd like more information. The more you know about the comparable houses in your area the better you'll understand the appraisal process and potential market value of your home. Thank you.

Best regards, Sherry
703-407-5778
0 votes Thank Flag Link Thu Nov 24, 2011
In an Appraisal, every detail of the subject house is compared with the Comp houses:
If one has something the other house doesn't, an allowance in made to make them COMPARABLE.
You will hardly ever find two houses that are 100% the same, even in a cookie-cutter tract.

You have to trust that the Appraiser knew what he was doing.
Finding a similar house, within a short radius, was more important than finding one with a basement.
And there is almost always an allowance for the difference in SQFT

good luck, God bless and Happy Thanksgiving
0 votes Thank Flag Link Thu Nov 24, 2011
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