Q: How is the size of the home determined for appraisal when there is a unregistered built out basement in Colorado?
I am looking at purchasing a home. It appears that the original home was around 2500 sq ft with 2 bed, 3 bath & a basement - this is what shows in the public records. The basement has been built out with additional bedrooms & bathrooms, but does not show up in the public records. How would the home be appraised - using the size of the home on public record or with the built out basement included? If the basement is not included in the public record, how would it be determined that it is built to code & can be included as part of the total area of the home by a lending bank?
A: Normally the basement would be included in the appraisal. Contact an attorney to review the specifics of an unrecorded improvement and how this can be corrected. As an aside it is entirely possible that a lender would know about the improvement from homeowners' insurance or collateral on a loan.
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