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Editor in Chief Sarah Wheeler sat down with Kenon Chen, executive vice president of strategy and growth at Clear Capital, to talk about appraisal modernization and how technology is just part of the solution.

Sarah Wheeler: What are some of the biggest challenges right now?

Kenon Chen: The challenge that’s in front of everyone continues to be the market itself, and then housing affordability. With mortgage rates continuing to remain high and home prices remaining high because of low supply, we’ve had another year of a reduced market. It’s difficult for lenders who don’t have a lot of extra cash to invest in making big changes right now — they need to stay focused on running their business in a smart way. But that’s why I think it’s really on solution providers like us to run ahead and create great opportunities that don’t require a lot of extra work and time and investment.

For us that means really simple APIs that are easy to integrate with, providing flexible options for how lenders can consume the products. That’s also making sure we’re partnering with the ecosystem to solve problems before the lender even asks for it and working with partners to make sure they can consume these products within the solutions they’re already using. That’s been a big part of the focus: getting the whole ecosystem to work together better so it doesn’t put all the onus on lenders to have to integrate a lot of different places to just get one solution together.

SW: How are appraisers adapting to some of these challenges, including new rules on valuations from the GSEs?

KC: Change is always hard. The GSEs implemented a number of policy changes that are an evolution from what appraisal has been for decades. So now we have multiple risk-based options: waivers, waiver plus property data, desktop appraisals, hybrid. Lenders and appraisal companies have a lot more menu options and their tech choices have to take them down the right path.

We’ve invested in the property data collection process and scaled it for a national level with mobile tech to capture all of the data right at the site. We’re using computer vision, AI, to capture the whole property into the space. We’re creating a digital twin and bringing the property into the digital realm, building a formation model and driving from that place as opposed to starting from a clipboard.

That’s required changes for everyone involved and we’ve been rolling that out as the market change happened at the same time. We see lenders really looking to the future and preparing for when volume returns — investing now to have a competitive edge in the future.

SW: How hard is it to change the way valuations are done at a fundamental level?

KC: Many lenders’ loan origination systems are really just providing a document repository and maybe some screens. But what ends up happening is that underwriters have to open up a lot of different documents, go to a lot of different sites. And one, that’s inefficient, but two, I think there’s something powerful about aggregating all the data first, running models on it, and then bringing back findings that focus underwriters where they need to look.

Most lenders’ loan origination systems are not designed to do that, for collateral especially. That’s been an area that’s a lot more PDF-based, because you have a PDF-based appraisal, you have a PDF base SSR. So that’s why we’ve invested a lot in a tool with an API that you can bring all your findings in at one place, as well as underwriting tools that put the right information in front of the right person at the right time. But all of that takes years of investment to create something that is really battle tested and can have proven results.

SW: Is the end goal of appraisal modernization to replace appraisers?

KC: The GSEs say all the time that they didn’t redesign these processes to replace appraisers, but to add more objectivity to the process, to create efficiencies in the process. Regardless of the tech used, there are human eyes reading, observing and looking at the data or a model, but starting with objective truth about the subject property is essential. And having a process that’s repeatable and standardized and consistent in every community — that’s where tech really helps.

We’ve been able to roll out standards through our mobile app that guides appraisers so that they’re grabbing the same data in the same way at every home. The evolution of mobile tech and AI and then greater connectivity when it comes to APIs to bring that data to people at their desks is what’s allowed us to approach this differently and do it at scale.

SW: Getting accurate square footage and floor plans has been a thorn in the side of the GSEs and agencies for years. Is that now solved?

KC: We went shopping for a solution back in 2016. There was a refi boom in Oregon and Colorado and appraisals were taking six weeks at the time. There was so much pain caused by elongated turn times — borrowers having to live In hotels when they were in between properties. We thought there has to be a better way.

Looking at the amount of time just driving, a time study showed appraisers were spending sometimes 30-40 hours a month just driving. Instead, we wanted to bring homes to the appraiser. We tried everything but we didn’t find anything that scaled to where anyone could do it with a mobile phone. Then we discovered CubiCasa and it actually worked. We had a partnership that led to acquiring the company. It’s now been adopted by real estate agents, brokers, photographers. We have about 30 Multiple Listing Services who have partnered with us as well.

MLSs want more accurate data and public records not always up to date. CubiCasa provides better data, shortening the days on market for the property. Consumers can really understand the property before they visit. It’s really rare that an app helps both the real estate process and the mortgage process and also makes secondary investors more comfortable. 

SW: What keeps you up at night?

KC: Tech is always changing. And the conversations around generative AI have captivated the industry because seeing how fast things are changing and how fast these new capabilities are coming is now a lot more visible. So it’s always necessary to innovate, but in a way where you’re not introducing risk into the system. For us, it’s always about innovating in a thoughtful way, not just to try the new thing for the sake of trying a new thing, but making sure it really will have the outcome, the benefits we’re looking for and that it can be really useful to our clients.

Source: housingwire.com

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Seems like a simple thing — to measure the square footage of a house. Just multiply the length by the width of each room and add up all your numbers. Not so fast. First of all, what’s a “room”? Do closets count? Basements? And why does accurate measuring even matter? There’s a lot to unpack.

What’s so important about getting square footage right?

If you’re moving into a new home and you want to know if your California king is going to fit into the primary bedroom, it’s nice to know the room’s square footage.

But there’s more riding on how to calculate the square footage of a house than just being able to fit your stuff. The square footage of a house determines its value. Lenders rely on square footage for mortgage calculations, tax assessors rely on square footage for assessments.

So, if you’re renting a house now but thinking of buying, it’s important to understand your current square footage so you can make a good comparison when house hunting.

What’s included in a house’s square footage?

There are several different answers to this question. First, here are a few terms to understand:

  • GLA (gross living area) is a home’s finished livable space above ground. And, if any part of the finished space is below grade, the entire area is typically known as below grade. GLA calculates when appraisers measure the home’s exterior. It goes in public records and is often important for tax purposes.
  • TLA (total living area) is like GLA but it includes finished basement space or possibly an accessory dwelling unit (ADU).
  • Living space is determined by American National Standards Institute (ANSI) Z765, which is a voluntary guideline for describing, measuring, calculating and reporting area for single-family homes.

Living space generally refers to “anything that is under the roof, within the house that is finished and heated — space heaters don’t count,” said Bryan Reynolds, a Certified General appraiser in Kentucky and Tennessee and president of the National Association of Appraisers.

Rooms to measure when calculating the square footage of a house

You might be surprised by which rooms are included — and which are not — when determining how to figure out square footage:

  • Bedrooms
  • Bathrooms
  • Kitchens
  • Hallways
  • Finished closets

Areas that don’t count towards the square footage of a house

There are plenty of rooms or spaces in your home that would qualify as “living space,” but don’t get counted in the total square foot calculation:

  • Finished basement: Say you have a ranch home with 1,000 square feet above ground and a 1,000-square-foot finished basement. An appraiser would say it’s 1,000 square feet of above-grade space and 1,000 square feet below grade. A real estate agent might say that there are 2,000 total square feet.
  • Enclosed porch: “If it’s unheated or used seasonally and there’s a separate door to the livable area, then it’s not included,” Reynolds said. But “if it’s finished in similar quality to the rest of the home, functional in design and has a heat source that is permanent in nature, then it can be included.”
  • Garage: The normal garage storage space doesn’t count. However, a bonus room above the garage might count. Only if it’s heated and 100 percent finished to a similar quality as the house. And, if it’s directly accessible from the inside of the house though.
  • Accessory Dwelling Unit: Unless it’s actually part of the house, it’s considered a separate entity.

Then, if you want to really get into the weeds, what about the sort of dead space under the stairs? According to Reynolds, ANSI says to include it, but AMS (American Measurement Standard) allows you to remove it from the square footage equation.

And, if you’ve got a bay window with a bench under it, one could argue that if you were to take the bench away, there would be useable floor space and that should come with the square footage.

How to figure out the square footage

Now that you know what to measure, here’s how to measure. But first, remember the aforementioned ANSI Z765?

For a room to make it in a home’s total square footage, the ceiling must hit a certain height — seven feet or higher or six feet four inches if there are beams or soffits. Plus, no portion of the finished area can have a ceiling height of less than 5 feet.

Let’s say you’ve got a Cape Cod with a sloped ceiling and knee walls. That portion under the sloped ceiling (if it’s five feet or less) is not counted in the square footage (see image). In addition, the rest of the ceiling must hit at least seven feet for at least half of the room’s floor area.

Photo source: AccurateHomeMeasuring.com

Keep in mind that an appraiser will, hopefully, look around inside the house but will measure the house from the exterior — unless there’s that pesky sloped ceiling situation, in which case they will have to go inside or the square footage will be off.

According to Hamp Thomas, certified residential appraiser and author of “How to Measure a House Using the ANSI Standard,” the pros use a 100-foot tape measure to do their job. Certainly, a shorter tape measure would work. However, there is a lot of stopping, starting and adding that can lead to inaccuracies.

Measure around the outside of the house above the foundation. Multiply the length by the width of each rectangular space. If you’ve got a second story and can’t reach a corner on the exterior, for example, measure from the inside and then add the width of the exterior walls.

Know why you’re measuring

It’s likely that, if you’re reading this, you’re not a professional appraiser. If you’re interested in getting a general sense of how much footage you have in your house, grab a measuring tape and measure each room’s length and width and multiply those numbers. Then add all the square footages together. “Don’t forget to include any outside walls thickness, or just measure from the exterior,” Reynolds said.

If a room isn’t a nice rectangular shape and has jogs and bumps, create rectangles, measure and multiply the length by width. Then, add up all the bits and pieces.

And if old-school tape measures aren’t your thing, there are lots of free measurement apps that you can download to your phone. You can also put the information into Calculator Soup’s square footage calculator, which can help you figure out the square footage of differently shaped rooms.

Measure on.

Stacey Freed is an award-winning writer and former senior editor for Remodeling, a trade publication focused on the business of the remodeling and construction industry. As an independent writer, she continues to write about the building, design, architecture and housing industries. Her work has appeared in Better Homes and Gardens and USA Today special interest publications, Realtor magazine, This Old House, Professional Builder and online at AARP, Forbes.com, House Logic and Sweeten.com among other places.

Source: rent.com

Apache is functioning normally

Welcome to Throwback Thursday, a web series where we revisit the most memorable properties we’ve covered in the past — and see what happened to them. Ranging from architecturally distinct properties to luxury listings with some quite unique features, to unforgettable houses that left us daydreaming about potentially moving in one day, Throwback Thursday revives our past favorites and provides an update on whether or not they’re still on the market, how much they sold for, and, if the information is publicly available, who bought them. This article has been updated to reflect the current status of the property, but all the information about the house itself as well as the property photos date back to our initial coverage (published on October 1, 2020).

Many million-dollar homes often come with name-bragging rights.

Sometimes, it’s because a celebrity once lived in the house, or because a famous designer left its expert touches on the home’s interiors; or maybe the address itself is well-known, for one reason or another.

But there’s a whole other level of name-dropping that comes with owning a home envisioned by one of our generation’s leading architects.

And that’s exactly the case for this modern glass home in Sagaponack, NY, designed by world-renowned architect Shigeru Ban.

In fact, the property is the award-winning Japanese architect’s first and only work in Long Island. And since it spent some time on the market in recent years, we got to take an exclusive look inside.

Shigeru Ban-designed home in Sagaponack, NY. Photo credit: Compass
Shigeru Ban-designed home in Sagaponack, NY. Photo credit: Compass

Famous for blending traditional Japanese elements with modern Western architecture, Shigeru Ban was named to TIME magazine’s shortlist of 21st-century innovators, won the 2014 Pritzker prize (the biggest distinction in the architecture world), and left his imprint on structures like the Aspen Art Museum, Centre-Pompidou-Metz in France, and Tainan Art Museum in Taiwan.

Despite his many accolades, the Japanese architect is most known for being a champion of sustainable architecture and has been instrumental in designing disaster relief housing from Rwanda to Turkey. 

His design philosophy is centered around creating uniquely free and open spaces with concrete rationality of structure and construction method, and the Hamptons house is a perfect embodiment of this.

With a design based on Ludwig Mies van der Rohe’s unbuilt Brick Country House (which dates back to 1924), the 8,000-square-foot home boasts unique architectural features, including a row of pillars that line the path to the front door — that can double as hidden storage.

Shigeru Ban-designed home in Sagaponack, NY. Photo credit: Compass
Shigeru Ban-designed home in Sagaponack, NY. Photo credit: Compass
Shigeru Ban-designed home in Sagaponack, NY. Photo credit: Compass
Shigeru Ban-designed home in Sagaponack, NY. Photo credit: Compass

The 5-bedroom, 5.5-bath home features exceptional furnishings by renowned designer Shamir Shah.

It has floor-to-ceiling windows, an oversized living room (with a wood-burning fireplace and wraparound views of the landscaped lawn), and a massive workout room that is more akin to a private high-end gym — complete with oversized mirrors and every piece of equipment you could think of, including a spin bike, elliptical, treadmill, press machines, and more.

See also: This Floating Farmhouse in the Catskills dates back to the 1820s, but you could never tell

The indoors seamlessly open to the outdoor areas, where there’s a heated in-ground pool and a pool-side terrace with multiple lounging areas — adding to the tranquil zen garden area (with a modern stone fountain) which greets visitors as they enter the property.

Shigeru Ban-designed home in Sagaponack, NY. Photo credit: Compass
Shigeru Ban-designed home in Sagaponack, NY. Photo credit: Compass

What happened to this Shigeru Ban-designed home?

When we covered this property back in October 2020, it had just been listed for sale asking $4,995,000.

Listed with Matt Breitenbach of Compass, the architectural property was already marked as Contract Signed on the brokerage’s website mere days after it came to market, which means it’s likely that an architect buff has quickly seized on the opportunity to own a home designed by the Pritzker-prize winner.

As is to be expected for a property of this caliber, the Shigeru Ban-designed home sold for way over its original asking price.

Public records show that the sale closed in March 2021 for $5,250,000. That’s 5% over ask.

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Source: fancypantshomes.com