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Multi-Family vs. Accessory Unit

Discussion in 'General Appraisal Discussion' started by BigSteve, Sep 15, 2010.

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  1. BigSteve

    BigSteve New Member

    0
    Aug 14, 2009
    Professional Status:
    Licensed Appraiser
    State:
    Texas
    I have a new assignment in which the subject is a single family dwelling with 2 garage apartments in the rear, of which only one is being rented out. I beleive the other unit is currenlty listed for rent. The owner does not currently live in the main dwelling however is planning on moving back in a few months when the current lease runs out.

    As it stands now I would approach this as a 1025 and call it triplex. When the owner moves back into the main dwelling would the garage apartments be considered accessory units? The home is worth more as a single family unit. What would he need to do to be categorized as such?
     
  2. NORTON

    NORTON Senior Member

    0
    Oct 10, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I was taught if the second unit(s) receive rents or occupied by non family members, it's an income property that is meant to go on a 1025.
     
  3. Denis DeSaix

    Denis DeSaix Elite Member

    57
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    I was taught to check the zoning first and find out what is legally permissible.
     
  4. BigSteve

    BigSteve New Member

    0
    Aug 14, 2009
    Professional Status:
    Licensed Appraiser
    State:
    Texas
    We actually do not have zoning regulations in this area so it would be legal to use as a single fam with accessory or multi fam.
     
  5. Denis DeSaix

    Denis DeSaix Elite Member

    57
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    I think there is some confusion here.
    My recommendation:
    Find out what is legally permissible. If an SFR is what is legally permissible, and multi-units are not legally permissible, then you are going to have to do some research on the additional units. My experience is that many jurisdictions have provisions for one additional unit in an SFR-only zone, but few have provisions for more than one additional unit. And, almost always, the additional unit allowed is subordinate to the original unit (smaller, an accessory, etc.).

    If you've determined that the subject's H&BU is single-family when the owner moves back in, it would make sense to me that the subject's H&BU right now is as a single-family. In other words, the occupancy (owner-occupied, vacant, or other) does not change the H&BU.

    The GSEs will purchase loans made on an SFR with one accessory unit but I do not believe they will purchase a loan on an SFR with two accessory units. I'm assuming that your assignment is for a mortgage-finance transaction and your client is going to want the appraisal communicated on the current GSE-approved form, conforming to GSE requirements. So, if the subject is a one-unit with two accessory units, I recommend you alert your client and decide how best to proceed.

    Some more research on what the subject's zoning allows is necessary.
    If, in this location, there is no zoning requirements, it sounds like you've already determined the H&BU is SFR. You'll still have the issue of two accessory units being an acceptable property-condition as far as your client goes. I'd get all this cleared up before I went any further.

    Good luck!
     
  6. Denis DeSaix

    Denis DeSaix Elite Member

    57
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California

    Ok, we posted at the same time. :new_smile-l:
     
  7. BigSteve

    BigSteve New Member

    0
    Aug 14, 2009
    Professional Status:
    Licensed Appraiser
    State:
    Texas
    Thank you everyone for the replies (and posting my question in the right place)

    I have some good ideas/questions for the lender before I go any further with the assignment.
     
  8. Denis DeSaix

    Denis DeSaix Elite Member

    57
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    Is this a rural area?

    (by the way, don't give up yet! Someone else may post with the optimal answer that clears-up the issues!)
     
  9. BigSteve

    BigSteve New Member

    0
    Aug 14, 2009
    Professional Status:
    Licensed Appraiser
    State:
    Texas
    No it's actually in the heart of the city
     
  10. Denis DeSaix

    Denis DeSaix Elite Member

    57
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    Ok.

    Well, H&BU is going to help the appraiser determine which are the best comps to use.
    If SFRs sell more than 3-unit properties, and the subject would sell as an SFR, then using 3-unit properties is going to under-value the subject.

    Just so you know, I don't think I've ever appraised a property that wasn't required to follow some zoning ordinance, so my experience (and suggestions) may well be inadequate for your situation. This thread will get the attention of those appraisers who are better qualified in the no-zoning markets. I'd listen to them! :)
     
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