A question appraisers are commonly asked is, “Why wasn’t my home’s entire finished area included in the appraisal report?” The answer is that often all of the area was considered, but appraisers regard finished areas partly below grade as basement, even if the area has daylight windows and is mostly above grade.
In the following two photos, you can see an example of a daylight basement that is mostly above grade on the rear of the improvement and mostly below grade on the front. The blue line in the photo represents the approximate grade for the property.
In the Portland area, properties like split-levels (two story bi levels), tri levels, and daylight ranches often have a large portion of finished, partly above grade basement area. The above grade finished area is usually considered as gross livable area (GLA) and is more prominently displayed in the appraisal report. The rest is considered as basement and is more difficult to find in the appraisal report.
The reason for separation of above and below grade area is to ensure that appraisers compare apples to apples. Lumping basement and above grade area together might lead to accurate value estimates in some cases but, for other properties lumping areas together could lead to an inaccurate comparison and value conclusion. Consequently, if it looks like the appraiser measured your home as too small, first check to see if part of your living area is compared in the basement area of the report with other properties that have similar basements. If not, there is usually a home sketch in the report with appraiser measurements that can be used for verification.
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