Square Footage In a Basement,what do you mean it doesn’t count?
I recently saw this article on the debate with Square Footage in the Basement. See this full article at
http://www.propex.com/C_G_calcsf2.htm
To sum it up, the house is not being penalized for having some of the finished living space in the basement (below grade area). Indeed, everyone is conscious of the issues involved. As home sellers and home buyers become more savvy, all have become aware that square footage is a key factor in the sales price. Understandably then, the seller wants as much counted as possible while buyers do not want to pay for something they didn’t get. So, while the whole process is confusing and appears arbitrary, there actually is a method to the madness.
Appraisers have to use the URAR; real estate agents do not. So historically, agents have generally taken the common sense approach and said, “well, its finished and I’m counting it.” Then, because Fannie Mae says so, the appraiser comes along and uncounts it. No wonder buyers and sellers ask that question, what do you mean it doesn’t count?
Actually, there is no real debate. Both Real Estate agents and Appraisers are trained to determine market value of a given home by looking for at least three homes that sold recently that are as similar to the subject as possible. These recent sales are called comparables—comps for short. The ideal comp is exactly the same (age, number of stories, garage, lot size, neighborhood, and so on). Of course, the perfect comp does not exist, but that is where the art comes in.
Now, getting back to the finished basement and bonus areas. Competent Appraisers and Real Estate agents will look for comparables with similar areas above and below grade. And, ideally both used the same comps. They just add the space up differently.
