Todd Huttunen began appraising more than 20 years ago with a few years off in between to pursue a career in cabinet making. He relegated that to hobby status and is currently an appraiser in an assessor’s office. His best friend dubbed him The Hall Monitor because of his rigidity and respect for rules. He offers Soapbox readers tongue-in-groove insight on appraisal issues. This week Todd sizes up the lame excuses made by appraisers who disclaim and defer to public record. So much so that Todd gets worked up into a lather. …Jonathan Miller
If you’ve been appraising residential real estate in a suburban area for more than a couple of years you’ve measured (I hope) hundreds, and maybe thousands of detached, single family houses. That, my friend, makes you an expert in estimating the gross living area of those houses you haven’t measured (most of your comps) when the primary source (MLS) for those comps state square footage numbers that are, shall we say, “Viagra-sized” and the public records are unavailable or unreliable (neither of which is an uncommon occurrence in many parts of Westchester County and probably some other places too).
Let us start with the basic Cape Cod house on a 50 x 100 lot, not unlike the one shown to the left:
The listing might read something like this. “This house is perfect for the young family or those looking to downsize. It features a first floor layout which includes a living room with a fireplace, dining room, modern eat-in kitchen, two bedrooms, and one full bathroom. The second floor has a bedroom and a full bathroom (and room for expansion). The house features a finished basement with a bedroom, rec. room and bath.”
Then comes my favorite part the total room count, which very often goes as follows:
Square Footage 2,300
But wait a second; I say to myself, this house doesn’t have eight rooms, four bedrooms and three bathrooms (above grade). It’s identical to the house I’m appraising a block away! It’s a six room house with three bedrooms and two bathrooms. It has a finished basement. And it’s not 2,300 square feet it’s 1,500 square feet.
Why, oh why, do some appraisers simply parrot the summary room count shown on the listing when even a cursory review of the narrative part of the listing illustrates that, at best, realtors have different standards for what constitutes living area and room counts than do appraisers? When you drive by the house to take a picture, isn’t it frequently obvious that the house is in fact smaller than the listing agent claims it to be?
I know what you’re thinking. You didn’t measure the comp yourself so you don’t know how big it is. The public record card was unavailable or inconclusive. So you are relying on the MLS stated square footage. I say bullshit! YOU’RE THE EXPERT. You’ve actually measured thousands of houses.
Most realtors don’t know how to measure houses and if there isn’t a reliable public record available they don’t have a clue as to the actual size of a house. They are salespeople and their business is selling houses. They tend to exaggerate things like the size of houses. Appraisers, who do measure houses, have to know this!
Therefore, if you haven’t measured the comp yourself and if the public record is missing or not helpful, I believe it is incumbent on you to critically examine the listing before accepting its stated square footage. Read the listing and count the rooms it describes. If they add up to six or seven don’t say nine just because that’s what the listing shows as the total. Look at the house when you go to photograph it and, when required, exercise your professional judgment when it comes to reporting the size of your comparable sales.
It would be nice if you could rely on the public record data that is available to you. And I suspect that in most parts of the country, you can do just that. But if you bring that mindset to the county where I’ve worked for the better part of 20 years, you’re in for a rude awakening, and misleading appraisal reports. Put in all the disclaimers you want, but if your reports are to be meaningful, they will have to include the statement that your opinions are based, in part, on your powers of observation and your years of experience.
My experience is that six room, Cape Cod houses with three bedrooms and two bathrooms, on 50 x 100 foot lots, generally measure around 1,500 square feet, give or take.