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  #1  
Old 02-23-2006, 11:14 AM
James Sturm James Sturm is offline
 
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Location: Chicago Metro Market
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Default House with no bedrooms

I have never run across this situation before. I inspected a house yesterday which did not have any bedrooms nor a full bath on the main level of the house. This house was purchased on 3/15/03 as a five room, three bedroom, one bath ranch style house. The current assignment is to appraisal the property "AS IS" condition. The house had plans (architectural plans have been aproved by the city) for a second story addition which will consist of three bedrooms and two full baths. However, the owner / contractor renovated the basement and first level of this house before the proposed second story addition (2nd story addition will start in about 2-3 months). The renovation process removed the pre-existing 3 bedrooms and also removed a full bath from this level. The level now has a living room, a dining room, a kitchen, one-half bath and a small office but no bedrooms. How would one make adjustments for the functionable obsolescence lacking bedrooms and a full bath for a one story house? My guess would be address the adjustment under the room/bath count adjustment and also under the utility adjustment on the grid page. I was thinking of a total adjustment of about 10% which would include the bedroom/bath adjustment and the utility adjustment. Any help would greatly be appreciated.
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Old 02-23-2006, 11:47 AM
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Workbox Workbox is offline
 
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Default

If you have a Marshall and Swift book, you can use that to help you determine some sort of cost adjustments. Also, find out and get the original plans, show that this was supposed to be added to the first floor, and base your appraisal off those plans subject to completion and base your adjustments off of that if possible. If you can, do a Cost approach appraisal. It may take some time, but it may give you an idea what you are working with.

This not the only way to do it, but something to think about. Cheers.
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Old 02-23-2006, 12:14 PM
John Hassler John Hassler is offline
 
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From the info you have provided this is most likely is curable functional. Calc the cost to add the walls back in. A contingency for effort/marketability/unknowns may be in order.

I really thought you had a no bedroom house. In 20+ years I've only done one. It was 360 sq ft and it only had footpath access (200+ stairs actually) which prevented any legal expansion. But what can you expect for under $200k five years ago?
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Old 02-23-2006, 02:28 PM
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Chris Colston Chris Colston is offline
 
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Default Be Aware of DOUBLE DIPPING

You don't want to be "double dipping" on your adjustments. Either adjust in the room /bedroom/bath count or in the Functional Utility with full explanations but not both. Your room count, above grade, could like 4/0/.5 and adjust for the lack of bedrooms there. Or make only a bath adjustment as compared to your sales and make the lack of bedroom adjustment in Fuctional. Then in the FINISHED ROOMS below grade, note the bedroom count and any baths and compare and adjust there. You may find out, the adjusted MV comes out just fine although getting there will take some explaining.
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Old 02-23-2006, 08:56 PM
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Lee in L.A. Lee in L.A. is offline
 
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What are they thinking? Should have got the loan first, then started demolition. I've seen a few over the years that had no kitchen. They tore everything out, then applied for loan to finish the job. Doh!
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  #6  
Old 02-23-2006, 09:55 PM
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CANative CANative is offline
 
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Quote:
Originally Posted by John Hassler
I really thought you had a no bedroom house. In 20+ years I've only done one. It was 360 sq ft and it only had footpath access (200+ stairs actually) which prevented any legal expansion. But what can you expect for under $200k five years ago?
I've done 2 in the last 12 months. The last one I did I actually found 4 comps. In contract for $95,000. I couldn't appraise it for less than $120,000. 12 x 32.


How can this house be appraised "as-is?" It is not suitable for full time habitation with only a 1/2 bath.
  #7  
Old 02-23-2006, 10:12 PM
Karl Karl is offline
 
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Being in the Greg Boyd, Ray Miller, appraisal type area have done 2 single story no basement, No Bedroom Houses the Bedrooms are detached from the home "Bunk Rooms". Home has a kitchen, Dining, Living Room, & 2 Baths You go outside there are 3 Bedrooms each individul rooms detached from the main house & detached from each other, With Piped in Heat & Air from the Main Home. These people are actually very PROUD of there UNIQUE concept home YES!! both homes got financed even With photo's & CYA addendums You guessed it by Cal. Lenders.
  #8  
Old 02-24-2006, 07:55 AM
James Sturm James Sturm is offline
 
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Default House without bedrooms or full bath on main level.

Greg,

" How can this house be appraised "as-is?" It is not suitable for full time habitation with only a 1/2 bath. "

Sorry Greg, I forgot to mention the house having a finished basement with a full bath. This was also my first question when I called the CM for the bank and explained the circumstances, prior to typing the appraisal. The owner / contractor had approved city plans for a second story addition and will be taken out a construction loan in the near future from the same bank.
  #9  
Old 02-24-2006, 08:13 AM
xm72mhd xm72mhd is offline
 
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Default

Quote:
Originally Posted by James Sturm
How would one make adjustments for the functionable obsolescence lacking bedrooms and a full bath for a one story house? My guess would be address the adjustment under the room/bath count adjustment and also under the utility adjustment on the grid page. I was thinking of a total adjustment of about 10% which would include the bedroom/bath adjustment and the utility adjustment. Any help would greatly be appreciated.
I hit this in one upscale market and I was able to find a sale that expressed very clearly that the market wants the master bedroom on the main level in that bracket. I said it required a functional adjustment since I had sijmilar room counts in other comps and cost as much to build, but it wouldn't sell as high.
  #10  
Old 02-25-2006, 12:25 AM
aussie ken aussie ken is offline
 
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Default

Hi James. These are all good points and sitting here impartially 10000miles away it seems that your approach has to reflect that these good people are half way through a renovation. There are at least two or more options available to you:

1) Value on restoration of original bedrooms and bathroom etc less cost to cure and profit to get "As-Is".

2) Value on completion of legally allowed top floor additions less cost to complete and profit to get "As-Is".

Good Luck
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