Basement House Appraisals
Basement house appraisals are one of the least understood, most maligned, and inadequately represented property type appraisals.
WHY? The information that the appraiser has to work with is often insufficient both from the quality of the MLS agent information and also from the format of the MLS listing sheet. Although there is a space for the living area of the basement, there is no space (blank, category, etc) for listing the total basement square footage.
THIS IS A MAJOR DEFECT!!!
Another major limitation is the lack of accountability for a listing agent to measure an area (measurements taken from tax, prior mls, the owner's brother-in-law, etc.) that could have been finished after the original purchase.
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Common Incorrect "Basement Information"!
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This basement is not "Full Finished" & Garage Is Not Attached. Built-in Garage = Part Unfinished Basement!
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What Is The Basement Adjustment Structure?
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BASEMENT SPACE IS TREATED SEPARATELY THAN ABOVE GRADE LIVING AREA AND AT A DIFFERENT ADJUSTMENT RATE. THIS EXAMPLE HAS THE SUBJECT AND ALL THREE COMPARABLES WITH UNFISHED BASEMENTS. Go To: AppraisalProcess for basic adjustment procedures.
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Gross Living Area = Above Grade Living Area
1. Basement & Finished = Total Basement Square Feet. This field treats the full basement area as unfinished and the comps are adjusted on an amount per square feet compared to the subject property.
2. Rooms Below Grade = Square Feet Finished + Bathrooms in Basement. This field compares the finished area only and receives an adjustment based on the incremental value of the finished basement.
Finished Basement Adjustments!!!
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Check MLS, MLS Pictures, Tax, Call Agent, Exterior Inspection
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600 SF Finished |
1,600 SF Finished |
Partial Basement ??? Size |
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Comp1 |
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Comp 2 |
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Comp3 |
| Basement & Finished |
2,000SF Total |
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2,000SF Total |
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1,200SF Total |
| Rooms Below Grade |
600 Sq Ft Fin |
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1,600 Sq Ft Fin |
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N/A |
The basements on the first two houses,above, are the same square feet as as the upstairs main floor which is 2,000 square feet. The third house has approx. 1,200 with part of the foundation having crawl space. The first house has 600 Sq. Ft. basement finish and the second has 1,600 Sq. Ft. basement finish, and the third house has no finished basement.
An MLS sheet often says "Full Finished Basement" , and Garage "2/Basement" or it is labeled attached garage when it is "built-in". If there is a garage in the basement, then the basement is probably not "Full Finished". What % of the basement is finished, how high are the ceilings, is there crawl space or is it "really" a full basement.
This is one reason some appraisers make "Lump Sum" adjustments for Full, Partial, and Finished/Unfinished basements. Accurate basement information is difficult to find but it's absence may penalize a quality finished basement. These Are Major Adjustment Factors!!!
Better Basement Homes Penalized - Case Study!!!
All Basements Are Not The Same!!!
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