tcopePremium
join:2003-05-07
Sandy, UT
kudos:2 | reply to SwedishRider
Re: Appraisals and Finished Basements said by SwedishRider:I can disagree... If one has a fully finished walkout basement with finishes of equal or greater quality, then I do think that should be factored into the square footage calculation. Maybe not at full value, but to disregard it or to blindly give it a "pennies on the dollar" valuation seems unconscionable to me.
If it's finished space where one can live and use... it should be counted substantially and not just valued as an afterthought by an appraiser...
That is not at all what I was commenting on. My comment was about the need for the appraisal and why.
Also, keep in mind that the way an appraiser writes up a home is different then the way a Realtor would list it. As in my example, I've been told that the appraiser won't count rooms below grade as bedrooms but a Realtor listing would. |
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 chrisPoor Impulse ControlPremium
join:2000-08-13
Middletown, CT | reply to cableties
said by cableties:said by ropeguru:I call it a scam. That is all it has been since day one with appraisers. They do want they want for whom they work for.
Scam is an understatement. Talking with a title guy and a realtor, because of the mortgage/housing fiasco, appraisers now base it on sqft, not amenities/improvements. Take all the pictures you want, show all the receipts, etc... doesn't mean squat anymore to appraiser. The appraisal is a funny thing. Say you're selling a house and it appraises for 200,000. If someone wants to give you 220,000 for it (for whatever reason - say there's a bidding war) that's great - they just need to put enough down because the bank isn't going to loan more than say, 90% of the appraised value. At that point the appraisal isn't as important. It's happened and still does. People get emotional about homes for a lot of reasons. Maybe they love the school system or they want to be close to relatives. There are lots of ways to justify paying a premium to live somewhere. As they say, money talks.
Now say you're looking to sell your house and the appraisal comes in at 200,000 but all the comps in your neighborhood are in the 185,000 range. You keep the house on the market, have showings and get offers but they're all right around the comps. In this situation the appraisal isn't going to force someone to pay more for the house if everything else is selling 15,000 or even 20,000 below your appraised value. This hurts even more if there are houses for sale in your neighborhood (even close surrounding neighborhoods) that are very similar to yours and priced in that lower range. You'll find yourself forced into lowering the price to what the market is willing to bear in order to sell.
When you're buying and selling yeah, the appraisal is important BUT - what's MOST important is what someone is willing to give you for the house.
If you're refinancing, the appraisal is everything, especially if your loan to value ratio is up there in the 90th - 95th percentile. I am in the process of re financing and the appraiser told me that as far as the house value is concerned, the bank is most interested in what they can get for it if they have to take it. And my expectation in that statement was that they would look for a quick sale. To pin a value on my place there are certain things that are expected for a house of my size and it's age. For example a two car garage. If my house is expected to have one because it was built in 2008 and is a certain size (2600 sqft) and doesn't, it's a 20,000 hit in the value (attached or detached). My house is expected to have 2 full and 1 half bath. If I were missing the half bath it's a 5,000 hit on the value. It all felt very clinical and cold  |
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 SwedishRiderRider on the StormPremium
join:2006-01-11
Connecticut
kudos:1 | reply to tcope
said by tcope:said by SwedishRider:I can disagree... If one has a fully finished walkout basement with finishes of equal or greater quality, then I do think that should be factored into the square footage calculation. Maybe not at full value, but to disregard it or to blindly give it a "pennies on the dollar" valuation seems unconscionable to me.
If it's finished space where one can live and use... it should be counted substantially and not just valued as an afterthought by an appraiser... That is not at all what I was commenting on. My comment was about the need for the appraisal and why. Also, keep in mind that the way an appraiser writes up a home is different then the way a Realtor would list it. As in my example, I've been told that the appraiser won't count rooms below grade as bedrooms but a Realtor listing would. Oh, then I agree that the appraisal is needed... but I disagree with the current methodology used in determining valuation.
I didn't interpret your post the way you meant it... |
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| reply to cableties
said by cableties:said by ropeguru:I call it a scam. That is all it has been since day one with appraisers. They do want they want for whom they work for.
Scam is an understatement. Talking with a title guy and a realtor, because of the mortgage/housing fiasco, appraisers now base it on sqft, not amenities/improvements. Take all the pictures you want, show all the receipts, etc... doesn't mean squat anymore to appraiser. It still works the same. It's based on comps in your area. They compare your amenities/improvements to other houses in your area. They rate you worse, same, or better then those comps. That changes the appraise price some. It was always based on the sq. ft. of the house. Look at an appraisal from 2002 then look at one from 2012. They do stuff pretty much the same they are just rounding everything down. If an appraiser use to give a $10,000 credit for a 1 car garage in 2002 they give a $5,000 credit in 2012 for that same 1 car garage. If they use to give $25/sq. ft. for finished basement they now give $15/sq. ft. for finished basement. All the other properties that have sold in the last year or are currently for sale in our area impact you directly. You can see in the picture all the features can impact the property based on comps. |
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| reply to SwedishRider
It's funny how tax appraisers seem to be exempt from this rule. Our home's only partially finished basement is being counted as part of the appraisal and has significantly increased our tax bill. |
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 KrKHeavy Artillery For The Little GuyPremium
join:2000-01-17
Tulsa, OK | reply to SandShark
Re: Appraisals and Finished Basements May I ask, which bank? |
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KrKHeavy Artillery For The Little GuyPremium
join:2000-01-17
Tulsa, OK | reply to alkizmo
And this is why the house flippers do everything to cheaply and shoddily add sq.footage to a home (Such as converting the garage, etc) and who cares about the quality, just so the numbers on paper look bigger.
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"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
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 MsradellP.E.Premium
join:2008-12-25
Louisville, KY
 ·AT&T U-Verse
| reply to dennismurphy
said by dennismurphy:The only upside is that it also isn't included in the tax calculations, so we catch a break and only pay $10k/yr  !! Yet another reason people are bailing out of the northeast. Here in Louisville we have 3400sq/ft, 4 bed, 3.5 bath, $400,000+/-and to our taxes are $3000! Prior to this we were in SC where the taxes were even lower. I really don't understand why anybody stays in the northeast with their ridiculous taxes. |
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 alkizmo
join:2007-06-25
Pierrefonds, QC
kudos:1 | reply to KrK
said by KrK:And this is why the house flippers do everything to cheaply and shoddily add sq.footage to a home (Such as converting the garage, etc) and who cares about the quality, just so the numbers on paper look bigger.
It's a "buyer beware" situation really.
It's more like that evaluators assess on the cheap end because of in case someone put up drywall directly on concrete, glue carpet to the slab and call it a "finished basement". |
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| reply to SandShark
said by SandShark:said by A non :Hey, enjoy your lower property tax bill due to the lowered appraisal.
All the fees on a refinance are the real scam. I had to pay for an appraisal when I refinanced, even though the value of the land alone exceeded the amount I was borrowing. It didn't matter what the value of the house was, I could have a tarpaper shack there, the bank would still get its money back. But, no, I had to pay for an unnecessary appraisal.
I just refinanced and the bank didn't require an appraisal. Of course, by not having an appraisal done, I didn't get the lowest rate I could otherwise have gotten. Then again, also I didn't have to supply as much extraneous documentation to get the loan. The technical terms are: Streamline (which you did) and Fully Documented. There are advantages and disadvantages to each. |
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| reply to tcope
said by tcope:I suppose it would be better that banks just loaned any amount of money on any property without really looking into the value? I seem to recall that this got the entire market into a little bit of trouble several years ago.
While all of the feels are hard to swallow, I can't disagree with an appraisal. First, it's cheap (around $300) and it's there to make sure loans don't exceed values. How do you know the current value of your land and home? I was borrowing $150k. Anyone with half a brain knows the land+improvements are worth $500+k. So that's a loan-to-value ratio of 30% or less!
So we need to pay good money for a professional appraiser to tell us what any dummy already knows? The bank doesn't care, they're not paying for the appraisal! |
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alkizmo
join:2007-06-25
Pierrefonds, QC
kudos:1 | said by A non :I was borrowing $150k. Anyone with half a brain knows the land+improvements are worth $500+k. So that's a loan-to-value ratio of 30% or less!
So we need to pay good money for a professional appraiser to tell us what any dummy already knows? The bank doesn't care, they're not paying for the appraisal!
How are they supposed to know what your land was worth? |
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SwedishRiderRider on the StormPremium
join:2006-01-11
Connecticut
kudos:1 | reply to Msradell
said by Msradell:said by dennismurphy:The only upside is that it also isn't included in the tax calculations, so we catch a break and only pay $10k/yr !! Yet another reason people are bailing out of the northeast. Here in Louisville we have 3400sq/ft, 4 bed, 3.5 bath, $400,000+/-and to our taxes are And even in the northeast it depends on where you are... I though CT was high until I considered building over the border in RI. If CT's taxes are indecent... RI's are just obscene!  |
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 Jack_in_VAPremium
join:2007-11-26
Mathews, VA
kudos:1 | reply to Msradell
said by Msradell:said by dennismurphy:The only upside is that it also isn't included in the tax calculations, so we catch a break and only pay $10k/yr !! Yet another reason people are bailing out of the northeast. Here in Louisville we have 3400sq/ft, 4 bed, 3.5 bath, $400,000+/-and to our taxes are I think I'm very happy with my tax rate of 0.47/100 |
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SwedishRiderRider on the StormPremium
join:2006-01-11
Connecticut
kudos:1 | reply to Jack_in_VA
Re: Appraisals and Finished Basements said by Jack_in_VA:said by Msradell:said by dennismurphy:The only upside is that it also isn't included in the tax calculations, so we catch a break and only pay $10k/yr !! Yet another reason people are bailing out of the northeast. Here in Louisville we have 3400sq/ft, 4 bed, 3.5 bath, $400,000+/-and to our taxes are I think I'm very happy with my tax rate of 0.47/100 Tax rate here is $22.38/1000 but only on 70% of assessed value. Cars are taxed at that rate as well. |
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Jack_in_VAPremium
join:2007-11-26
Mathews, VA
kudos:1 | said by SwedishRider:Tax rate here is $22.38/1000 but only on 70% of assessed value. Cars are taxed at that rate as well.
Homes here by state law must be taxed at 100 percent of assessed value.
Cars are $3.60/100 here in my county.
A $300,000 house here would pay $1410 |
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KrKHeavy Artillery For The Little GuyPremium
join:2000-01-17
Tulsa, OK | reply to alkizmo
The thing that bugs me is I did check into it before buying a home. I looked into what was supposed to count as sq. footage, ceiling height requirements, finished basement, etc, even things like egress windows and so on for if you want to add a bedroom in a below grade basement, etc and everything checked out or seemed fine.
Now to find out afterwards that "None of it counts" just feels like... well, like fraud or plain being ripped off or stolen from, actually. We're not talking a small amount, either. 900 sq.ft + bathroom disappearing would mean instead of having plenty of equity in the home, I'd now be upside down in the mortgage and not able to refinance or sell for fair price if the need arose.
You shouldn't be able to change the rules in mid-game. I have plans for the basement but now it seems like any money invested would be just thrown away because it really wouldn't add any value to the home and no matter how nice it would be a potential buyer still wouldn't be able to get traditional financing on it.
Feels wrong on every level.
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"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
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SwedishRiderRider on the StormPremium
join:2006-01-11
Connecticut
kudos:1 | said by KrK:The thing that bugs me is I did check into it before buying a home. I looked into what was supposed to count as sq. footage, ceiling height requirements, finished basement, etc, even things like egress windows and so on for if you want to add a bedroom in a below grade basement, etc and everything checked out or seemed fine.
Now to find out afterwards that "None of it counts" just feels like... well, like fraud or plain being ripped off or stolen from, actually. We're not talking a small amount, either. 900 sq.ft + bathroom disappearing would mean instead of having plenty of equity in the home, I'd now be upside down in the mortgage and not able to refinance or sell for fair price if the need arose.
You shouldn't be able to change the rules in mid-game. I have plans for the basement but now it seems like any money invested would be just thrown away because it really wouldn't add any value to the home and no matter how nice it would be a potential buyer still wouldn't be able to get traditional financing on it.
Feels wrong on every level.
Yep. |
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