Bi-Level and Split-Level Houses

Submitted by justin on Fri, 03/25/2011 - 21:23

Bi-Level houses good. Split level houses bad. Yes, there are those who seem to believe this. It's in the category of real estate maxims like "neutral colors are best" and "basement rooms don't count" that have some basis in truth, but in fact hide the complex reality that is real estate.

Generally, the term "bi-level" is used to refer to a house designed to have space below grade. For example, a house with a walk-out basement or garage will sometimes be called "bi-level". The caution with bi-levels is simple: standardized appraisal guidelines (such as ANSI Z765) generally preclude the inclusion of below grade space within Gross Finished Area (GFA). Likewise, Fannie Mae's appraisal forms require appraisers to provide a clear distinction between "above grade" and "below grade" space. This can frustrate sellers who have significantly invested in their "below grade" areas, only to find out "they don't count".

Here are some things to remember:

  • The MLS system (and other real estate web sites), which lists a home count, is an advertising tool. (If it is attempting to purport fact, it failed years ago). As such, strict ANSI or even Fannie Mae appraisal guidelines need not be followed.
  • Square footage counts & bedroom counts in appraisals only matter in so much as the appraiser is attempting to compare two houses that are not, in fact, identical. (If they're identical, odds are they'll be exactly the same).
  • In the end, the part of the appraisal that matters is the bottom line. If the counts mean that the appraiser can't find comps, then ... perhaps there are not in fact comps.
  • Local custom can trump the standards. An appraiser will, however, generally need "true comps" (other houses of a similar nature) and to cleanly and clearly document what they're doing.
  • Appraisers don't like to stick their necks out too far. After all, their livelihood is dependent upon banks trusting them.