OKC Pulse September 2013 | Page 13

MYTH: Appraisals not coming in at agreed
upon sales price when a basement is included
is the #2 argument why Builders don’t
construct basements.
(#1 is soil/water tables prevent construction)
First, what is an appraisal: It’s the opinion of
the person writing it and only needed when a
buyer must borrow $$ from a bank to purchase a home.
It simply lets the banker know if the collateral is secure.
Second, appraisals for FHA/VA/Fannie Mae/Freddie Mac loans are
legislated by Washington DC and called the UAD-Uniform Appraisal
Dataset (2011). Currently there are no guidelines on appraising
basements but there are guidelines on pricing a component of a
home which is what a basement is considered.
Lastly, lack of comparables for Appraisers to draw from is true BUT
there are many unique properties to include ranches, land and
luxury multi-million dollar homes that lack sold comparables. We
get those appraised. It is up to the “seller/builder” or the their
representative to educate the appraiser when dealing with a
unique component whether it be a pool, basement, or 4 car
garage.
Builders, engineers, developers, unlicensed sales reps, etc.. simply
do not have the necessary expertise to educate appraisers, and
therefore assume basements prevent homes from appraising at the
agreed upon sales price. Which is simply not true.
© 2013 S. Walker & Co.