I stumbled on to this iPhone app from the Locometric called RoomScan – to measure rooms, create floor plans , calculate square footage on the fly. I was really impressed with the free version and quickly upgraded to the $4.99 pro version to be able to create doorways and connecting rooms. This may soon replace the $500 laser measuring device I’ve hauled around for years.
An ah-hah moment indeed.
Tags: Floor Plan, Square Footage, Home Inspection, RoomScan, iPhone, measuring, AppWatch
[Alvin “Chip” Wagner III, SRA, IFA, SCRP is third generation appraiser from Chicagoland who is a public figure and well respected within the appraisal industry. Along with his business partner, Bob Headrick, they run the firm [Headrick-Wagner Appraisal Group](http://www.headrick-wagner.com/), which has been providing appraisal, consulting and research services throughout the Chicagoland market for more than 35 years. I met both Chip and Bob through [RAC (Relocation Appraisers & Consultants)](http://www.rac.net). When I met Chip in the late 1990’s we both spoke together at a national conference about our appraisal web sites, both among the first in the country. I have learned a lot from Chip and I am thrilled to use his firm’s market stats on my Matrix blog and post his Chip Shots column on Soapbox. Like me, he has an enthusiasm for market analysis.
In this week’s Chip Shots column, Chip shows his annoyance with the “dumbed-down” check box appraisal culture and elaborates on one of critical measures of being good appraiser: having the ability to accurately measure the property he or she is appraising.
…Jonathan Miller
All appraisers have been taught how to calculate Gross Living Area. Often times mistaken with the term “square footage,” Gross Living Area it a very important component in real estate appraising, but is often overlooked and rarely challenged for accuracy.
As defined by the Appraisal Institute’s Dictionary of Real Estate 4th Edition: “Gross Living Area (GLA) – The total area of finished, above-grade residential space excluding unheated areas such as porches and balconies; the standard measure for determining the amount of space in residential properties.”
What has been bothering me in recent weeks? Today it is the appraiser who cannot measure. I have been challenged 5 times in the past week on my measuring ability. I have been right on every appraisal, and I’m getting tired of this trend. This is high school geometry, not physics or engineering. Please understand, I admit to making mistakes and am far from perfect.
I was brought up in this business during a time where we didn’t have APEX, Win-Sketch and the sketching programs out there. I had the graph paper and architectural rulers and drew floorplans and manually calculated my Gross Living Area.
If you are doing residential appraisals only for lenders, you are likely never challenged on how accurate you can measure a home. You go about your business with your tape measure, Roto-wheel, or laser device, while others just may be lazy and use the survey or blueprints and don’t measure anything. Not even a spot-check against that survey.
I specialize in corporate relocation appraisals. This is a niche in the residential appraisal profession when a corporation or the government transfers one of its home-owning employees. Two “relocation” appraisals are averaged together to form a buyout offer to purchase the home of a corporate transferee.
When doing this type of work, the two appraisals have to be within 100 square feet of each other. This is a reasonable request, given one appraiser might round up or down a couple of inches, or measure an open two story foyer differently by a couple of inches.
But more and more often, I am hearing: “you and the other appraiser both measured the subject property, yet you are 250 square feet apart.” (Not on a 5,000 square foot home, but on a 1,900 square foot home, mind you). So, you politely tell the reviewer that you will be happy to take another look at your measurements, and would also like to review the other appraiser’s sketch. This is common-practice, and I get to review a lot of sketches of my peers some good, some bad. A good reviewer will look at both sketches, find where the differences are and try to get to the bottom of it. A lazy or untrained reviewer will simply allow the appraisers to hash it out.
But the other appraiser sketches I have seen recently makes me really embarrassed for my profession. Pulling a tape measure isn’t a requirement for your appraisal license, it is just expected for you to pass high school math!
Some sketches are hand-drawn and have simple multiplication errors. Okay, it happens if you are living in the 1980’s. Use your appraisal software with the sketching programs. If you are using a computer but still hand drawing your sketches and scanning them into your reports, take a few minutes to learn how to use these programs the are great and once you learn to use them, they are accurate 100% of the time.
Other discrepancies might be the other appraiser misses an “overhang” or a cantilever. Although I strive for perfection, I have been known to miss that one from time to time. Nobody is perfect all of the time.
One of the more common problems I see is measuring open areas of two story foyers. Did you know that the first stair tread is considered part of the second floor? Stupid as it sounds, that is one of the most common mistakes an appraiser makes. Approximately half of the appraisers measure by removing the entire open foyer space, the other half measures correctly around the stair treads. Assuming that an average stair width is 3.5′ and 10′ long, this can change the sketch by 35 square feet. Not a big deal? It is when the two appraisers GLA’s are different by 125 square feet. Measuring the foyer properly will bring the difference to less than 100 square feet, and no calls and exchange of sketches will be needed.
Another common problem I see is the other appraiser rounds up or down to the nearest half-foot, or even the nearest foot. Again, the guidelines for calculating Gross Living Area requires the appraiser to measure to the nearest inch or 1/10 of a foot.
How about dormered areas on second floors ever heard of the 5′ rule? At least half of the appraisers competing with me for relocation appraisal work apparently have not. Gosh, I’ve even seen some appraisers swear that a cape cod without dormers is measuring the first floor and multiplying by 1.5; and if there are dormers, you multiply by 1.6; and if there is a shed dormer, you multiply by 1.7.
Then, there are renderings that don’t even look remotely like the house. I can recite many sketches where one appraiser calls a wall a 50′ straight wall on the rear, yet there are clearly bay windows, 3′ extensions, and enlarged and extended rooms. Hey, if you are using that survey, it probably only gives the dimension at the foundation, not any siding that goes over the foundation.
And by the way, never trust the blueprints or the survey I see errors all the time. Blueprints often change during construction. They are a great guide, but spot-check them on at least 50% of the dimensions. And the survey? I have a collection of inaccurate surveys as well. I suspect most are typographical errors in this case, but surely don’t rely upon someone else’s calculations. Again, spot check that survey before you leave the property.
You don’t believe me? What are these “guidelines” I am referring to? Yes, there is a guideline for calculating the Gross Living Area. Check out the ANSI guidelines (American National Standards Institute and purchase the “Method for Calculating Square Footage” guideline ANSI Z765-2003. The original standard was developed in 1996 and adopted by dozens of organizations including appraisal associations, builder associations, National Association of Realtors, Fannie Mae, Freddie Mac, and ERC to name a few. Updated recently in 2003, the standard describes the procedures to be followed in measuring and calculating square footage of detached and attached single-family homes. It is the purpose of this standard to describe a method of measurement that will make it possible to obtain accurate and reproducible measurements of square footage in single-family homes. The ERC Relocation Appraisal Guide, the book describing how to complete a relocation appraisal, has instructions following these guidelines.
Our profession continues to be “dumbed-down” by box-checking forms, and accurately measuring a property is quickly becoming a lost art. In the Sales Comparison Approach, the GLA is obviously an item of comparison. The Cost Approach seems to not be relevant to anybody anymore (another Blog topic), but if you don’t measure the home accurately, your Cost Approach to Value will be flawed. And although the Income Approach is seldom considered appropriate in residential appraisals, if it is relevant, you better accurately measure the home to apply to the Gross Rent Multiplier.
A final thought, not only will mis-measuring a home lead to a flawed value through any of the three approaches to value, it could lead to a lawsuit down the road for the appraiser. Take a few extra moments to make certain you are doing the job right.
Chip Wagner’s field measuring tools include: Leica Disto Classic 5A laser measuring device, 3′ tape measure on a keyring attached to the Disto, Laser Shades (for the bright sunny days), “Rite-in-the-Rain” paper (for those rainy days), 7-inch pocket size angle tool (for homes that are not square), legal-size clipboard with one-inch hash marks carved into the underside (old-school trick I learned from my father), Lufkin 100′ fiberglass open-reel tape measure (collecting dust) and a Rhino heavy-duty six-foot flexible fiberglass folding engineer’s ruler (my retired appraiser-father’s tool of choice, not used in 2+ years).
Tags: Soapbox Blog, Chip Wagner, Appraisal Process, Home Inspection
In the article [Do you see dead people? Disclose it [Realty Times]](http://realtytimes.com/rtcpages/20031023_deadpeople.htm) Most states’s disclosure laws don’t deal with the forms the deceased take in the afterlife, but they do address death as a stigma. The one exception is death caused by AIDS. Federal law define’s AIDS as a disability and such a disclosure could be deemed discriminatory.
Randall Bell, founder of Laguna Beach, CA-based Bell Consulting, which analyzes the impact of detrimental conditions on property values, says secrecy about specters and other conditions only adds to the fear. Public disclosure has a cathartic effect that helps remove any shroud of secrecy
I have spoken to appraisers around the country on this issue and I have been told some stories of tragedies in houses that have made my skin crawl. Its hard to believe that a buyer, after being told some of these stories, would not apply some sort of discount to the value. The difficult lies with supporting such an adjustment as an appraiser since these incidents (hopefully) occur few and far in between.
In a similarly titled article in [Valuation Review](http://www.valuationreview.com/ME2/Audiences/dirmod.asp?sid=270E8EBA5AF64172B917EBD588EDB85A&nm=&type=news&mod=News&mid=5F249E552B2C49509BC41751816632F3&AudID=F0F48C5C19CB47B3A675FD6074A3CB8A&tier=3&nid=1C708BAB475A4037A01017220624127B) About 30 states have specific laws on the books saying that agents and sellers cannot be held liable for not disclosing such nonmaterial, or nonphysical, “defects” about a house.
Depending on the status of the current real estate market, the stigma would fluctuate. It is unlikely that a murder or suicide, or [rumors of a haunting](http://www.bankrate.com/brm/news/mortgages/20021031a.asp) in a house would not have an affect on the market value of the property. The Scott Peterson house sold quickly last year, but that may be due to the fact that the murder did not occur within the home and that the housing market at the time was very short of inventory.
In the late 1980’s we were familiar with a house in Manhattan where the owner murdered his family. This incident was discussed in the local broker listings and it was our feeling that the value was impacted by about 10% at the time. That discount may or may not be relevant today.
We have seen stigma adjustments quoted by other experts in other markets be as high as 30%. Quite often, the property is torn down and the land becomes the true asset in the transaction.
Tags: Soapbox Blog, Home Inspection, Adjustments
The new appraisal forms mandated by Fannie Mae effective November 1 will likely cause an [increase in appraisal fees [MCall]](http://www.mcall.com/business/realestate/all-appraisalsnov20,0,5473370,print.story?coll=all-businessrealestate-hed) because they will take longer to fill out and place much more liability on the appraiser for expertise he or she generally doesn’t have.
When Fannie Mae redesigned the forms, the appraiser’s role took on the that of a home inspector which is a different discipline that appraisers are not trained for.
The problem is the new forms are written in such a way that they hold the appraiser responsible for the condition of the property, says Barbara Decker-Spence, an appraiser in Allentown, who has led seminars on the changes for area real estate agents, lenders and appraisers.
”I am an appraiser. I am not a home inspectorand there’s a big difference,” she explains. ”Appraisers value the economic interests [while] home inspectors look at: Does the electrical system work? Does the plumbing work? Does the mechanical system work and are there structural issues?”
If report preparation takes longer and additional liabilities are being placed on the appraiser’s shoulders, it would then follow that the cost of doing business is higher. Appraisers in many markets could be expected to pass along the cost to their clients.
Tags: Soapbox Blog, Appraisal Process, Home Inspection, Appraisal Forms, Appraisal Fees
The New York Times approached our firm to provide some “war stories” about unusual property inspections. No names, just experiences. We had a bunch of fun jogging our memories. However, the writer decided to present the story [from the perspective of real estate brokers [NYT]](http://www.nytimes.com/2005/11/13/realestate/13cov.html?pagewanted=print) which was a fun read so I thought I would make my own fun and share a few stories from my staff and myself with you:
Michael J. Grassi
It was mid February and I was doing an inspection of a home. It was a very frigid day and I asked the owner if I could see in the garage. He was not all that happy about my request. I told him it was part of doing a complete inspection and he reluctantly opened the door. I came to find that there were two people living in the garage with no running water or heat. They were staying warm by using a Weber kettle grill and charcoal. They had cut a hole in the roof for a vent. Not ideal living conditions even by New York standards.
While doing an inspection in Jamaica, Queens I asked the owner if I could go down to the basement and if I would disturb anyone. No was the reply by the owner. I went down into the dark basement with only minimal light from a window. When, I reached the bottom step, I heard a growl and saw a massive head with two large orange eyes. As I slowly backed up the stairs heart pounding, sweat dripping, I got to the top step and asked what that was down in the basement. Oh!! the owner said casually, you mean our watch dog. This dog was a 180+ lb. Rottweiler, who looked very under fed. Thanks for the warning I said.
During an inspection of a multi-family dwelling I came across a most unusual sound. As I moved into the basement I noticed a foul smell which was pungent but not overwhelming. While in the basement I heard what sounded like a distant toilet flush from above. As I stood listening, I heard what amounted to the sound of a waterfall getting closer with a splash at the end. Apparently, there was a large hole in the sewer pipe and the waste water was dumping right into the basement, not ideal. The landlord who was with me was mortified. I needed a shower and shoe cleaning after that inspection.
Lea Freund
I was appraising a museum and the summer intern took me around the place. I think it was in the fall and I decided to leave my jacket, bag and cell phone in her office. Just as we stepped out onto the roof, the door closed behind us and locked. . . We did find a set of stairs that led down to an enclosed alley, and the doors on each floor were locked. Finally, we got to the ground level and we started banging on the door quite loudly. It took a while, but security opened the door and said they were completely frightened by the noise.
Dina Miller
I went to an inspection, the maid let me in. The husband had made the appointment. Both husband and wife were at work. The apartment was spotless and in beautiful condition. The wife calls the housekeeper by phone and asks to speak with me. Her first words are “Get the HELL out of my apartment. The maid hasn’t finished cleaning and its a mess”. I explained to her the apartment really looked fine and her husband had made the appointment. She said we’ll see about that…Then I had to conference call with the husband and the wife who continued to rant that I need to get out, her apartment wasn’t clean. When I hung up the maid said “You know she has a daughter. The daughter is just like her. You want some wine?”
Andrew L. Rogers
I went into an apt in Harlem. there were cages for large dogs, but no dogs and cats all over the place. the maid was there and said she didn’t know where the kittens were. we went down to the basement and in one room that was littered with debris there were flies buzzing all about, we assumed that the kittens were dead underneath the rubble.
Jonathan J. Miller
I met a couple on a very large property inspection that stayed with me (very much in my personal space) for the entire inspection, yet both screamed strong insults and innuendos at each other for the hour I was there while I kept saying “perhaps I should come back at a later time” or “please, I am having a hard time concentrating” hoping they would leave or stop, but they would both say “oh no take your time” seemingly oblivious of what they were doing to each other (and me). I called my wife after the inspection and told her I loved her.
I was given the keys to an apartment. When I opened the door, the apartment was completely dark. I thought I saw someone sitting on the couch so I called out “Hello”, but no answer. I finally found the light switch and saw a nude woman out of the corner of my eye in the mirror looking at me. I was startled but then realized it was a female mannequin propped up on the couch. I continued with the inspection, and was startled by yet another mannequin standing behind a door in a dark bedroom. I was definitely creeped out. When I called the homeowner later for info, I mentioned this to him and he laughed and told me their names as if they were real people.
At the end of the day, I had to inspect an apartment for an estate. The property seemed to be lived in with dishes in the sink, magazines strewn about. The apartment was very large and didn’t have a lot of natural light. It was getting dark and as I worked my way toward the rear of the apartment, I began to hear two men speaking very softly from the back of the apartment. I called out and the talking stopped for a few seconds. Then it continued. I became very uncomfortable and felt a chill down my spine. I called out again with the same result. I finally arrived at the rear of the apartment and found a small radio playing on the floor of a closed closet door. I finished up and got the heck out of there.
As a broker was taking me in to inspect a condo unit in a relatively nice building in Chinatown, he mentioned to me in passing “this apartment needs a little work.” He opened the door and the cigarette smoke was so thick, I could not see across the room. I literally had to duck down to see where I was going. It was a studio (one room) apartment and 6 chain smoking brothers were living there after their mother had died (it had been her apartment). There were about a half dozen cages with live chickens and all the walls were smeared with their mother’s feces as she had suffered from some psychological problems before she had died. Needless to say I didn’t touch anything and got outside as soon as I could.
Tags: Soapbox Blog, Appraisal Process, Home Inspection, Radio
This article, [Measurements Amiss: Size matters–on your property tax bill](http://www.tucsonweekly.com/gbase/Tools/PrintFriendly?url=%2Fgbase%2Fcurrents%2FContent%3Foid%3Doid%253A68224) struck a particular chord with me, both as an appraiser and a homeowner.
The square footage of properties found in assessor records may be well off the mark. Appraisers should use caution when pulling comps from town hall. Public records are not always accurate. After driving by the comp, if something doesn’t seem right, call the broker who sold the property (you should be doing this anyway).
Square footage is an important consideration for homeowners as well because it affects your tax bill. One of the easiest things to look at is the size of your home versus the size recorded with your town hall. Its a tangible amenity and much easier to make a case for getting your tax bill reduced. With the explosion of home additions, there is ample opportunity for errors in the tax records.
Although this pertains to a commercial building, there’s that old Manhattan joke that the “Empire State Building is more than twice as large as originally constructed.”
Concern over square footage doesn’t just apply to single family houses. Condos also see significant inconsistencies. The developer may include varying parts of the exterior space, such as a terrace, in the total square footage of the apartment, depending on the municipality. While such an amenity provides additional value, there is not an apparent standardization of how much, if any, of these sort of amenities. A small portion or all of this additional area may be included. We have seen condos that must have must have common area included in their gross living calculations. (Its a stretch, but I suspect that was intended to make the price per square foot value appear lower than competing properties.)
There are one family standard measurement techniques set by [ANSI](http://www.toolbase.org/tertiaryT.asp?DocumentID=4243&CategoryID=1922) and a condo standard required by [Fannie Mae](http://www.efanniemae.com/sf/formsdocs/forms/1073.jsp) which relies in the interior perimeter.
A below grade basement and attic space is usually excluded from square footage. However, there are exceptions. A prior home that I had owned was a Cape Cod style house that had been expanded several times that was lovingly called a “bastardized cape” in that particular market. At least 40 years prior, the attic had been converted to 2 additional bedrooms and a full bath as were most of the other capes in the neighborhood. A portion of this living area should have been considered as part of the square footage which seemed to keep our taxes low as compared to neighboring homes.
[Matrix] [Length x Width Is Negotiable](http://matrix.millersamuel.com/?p=120)
Tags: Soapbox Blog, Appraisal Process, Home Inspection
[This series of photos taken during home inspections](http://www.stargroup.com/hnt/index.htm) by [StarGroup, a home inspector in California](http://www.stargroup.com/ResidentialInspections.htm?hnt/index.htm~mainFrame) should be interesting to many readers since appraisers see a lot of suspect conditions during an interior inspection.
Photo Caption: “Drop in sometime” A
doorway should never open over a descending
staircase. A majority of accidents in the home
occur on staircases. Such doors are not unusual
in older homes.
The photos are amazing 😉
Tags: Soapbox Blog, Home Inspection
If you haven't already, sign up for
'Housing Notes' to receive weekly insights and research.
Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state, and federal courts. He holds the Counselors of Real Estate (CRE) designation, is an Appraiser “A” Member of the Real Estate Board of New York, and is a member of RAC.
Learn More...
You'll be able to choose from an array of robust housing metrics compiled using research developed during the preparation of our market report series. Expanded significantly from prior offerings, use this resource to build charts and custom data tables or leverage your own information for more powerful research and presentations.
In the meantime, here is a small sample of the aggregated data we will provide.
Forbes ('20-)
Appraisersblogs ('17-)
'Three Cents Worth' column 3CW ('05-'16)
When Curbed was acquired by Vox, my eleven years of 3CW chart art and column links were broken on Curbed NY, Curbed DC, Curbed Miami, Curbed Hamptons, Curbed LA, and Curbed Ski.
Many of my 3CW charts can be found here:
Curbed 3CW Full Chart Archive
Op-ed column ('14-'15)
'Economic Spotlight column ('03-'09)
New York Times experiment ('08-09')
Huffington Post (09')
Favorite "How to Value" Posts
Recent Comments on Matrix