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  #1  
Old 09-10-2007, 12:44 PM
Em Tee Em Tee is offline
 
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Default Illegal Duplex

I just can't get my brain wrapped around this - I need help!!!

Subject is a duplex. According to city planning & zoning, it's illegal and they're only allowed to have a single family residence on that lot. City said if they investigated, owners would be required to put it back to SFR.

My client now wants me to appraise it "as is", with a cost to cure to convert it back to SFR. That would require the demolition of the smaller 2nd unit. Other than the fact that I have no freakin clue what that might cost, isn't that a hypothetical condition? Because "as is" is an illegal duplex. To appraise it as an SFR would be hypothetical. Am I getting that right? Also, if they wanted it appraised as an SFR, there wouldn't be a cost to cure, would there?

My mind is going in circles. What are my options for appraising this property?

Thanks!!
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Old 09-10-2007, 12:46 PM
Austin Martin Austin Martin is offline
 
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Default Cost to remove second unit

I know that M&S gives a cost to demolish SFR's this should get you in the ball park
  #3  
Old 09-10-2007, 12:52 PM
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PropertyEconomics PropertyEconomics is offline
 
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Default

Quote:
Originally Posted by Mary Adamson View Post
I just can't get my brain wrapped around this - I need help!!!

Subject is a duplex. According to city planning & zoning, it's illegal and they're only allowed to have a single family residence on that lot. City said if they investigated, owners would be required to put it back to SFR.

My client now wants me to appraise it "as is", with a cost to cure to convert it back to SFR. That would require the demolition of the smaller 2nd unit. Other than the fact that I have no freakin clue what that might cost, isn't that a hypothetical condition? Because "as is" is an illegal duplex. To appraise it as an SFR would be hypothetical. Am I getting that right? Also, if they wanted it appraised as an SFR, there wouldn't be a cost to cure, would there?

My mind is going in circles. What are my options for appraising this property?

Thanks!!

Mary .. honestly it seems you are in need of educating your client in a very polite way as to how you must proceed with this. I think if you do so, or ask to speak to the underwriter ... it should be clear how they want you to proceed and thats that.

Your not confused .. they are. Best of Luck to you.
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  #4  
Old 09-10-2007, 01:05 PM
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George W Dodd George W Dodd is offline
 
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Default

Mary,

Would it be possible to convert it to a SFR with an attached in-law suite or some other single family use. Please provide some more info, are the units attached or detached? How about size, you say the smaller unit but how big is it? Are you sure the County/City would require it to be demo?
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  #5  
Old 09-10-2007, 01:07 PM
Charles Knutson Charles Knutson is offline
 
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Default

I'm not sure it would require demolition -- sometimes, removing the kitchen is all that is needed to convert a rental unit into a legal home office or studio space, or separate quarters for a teenager.

Cost to remove a kitchen would be minimal, and it would take the rental unit issue off the table.

Would the second unit be legal as a mother in law apartment? Or guest quarters? I used to see those all the time, and they added value in some entry level homes. Often they were in a basement, and they received a higher positive adjustment for the M-I-L Apt than an ordinary finished basement.

There are several ways to approach this, but I would do the kitchen demolition cost to cure -- that should be $1k or less, and maintains the contributory value of the smaller structure.
  #6  
Old 09-10-2007, 01:08 PM
Em Tee Em Tee is offline
 
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Default

2nd unit is too large for the lot so it couldn't be converted to in-law unit. The duplexes are attached on 2 walls and the configuration is weird enough that I don't think they could be melded into one really big house. City stated they would require "conversion" to SFR, but didn't state how that would have to occur. Tear down is the best option I see.

CB3? Appraise it as SFR subject to 2nd unit being torn down (or modified). Then I wouldn't have to include a cost to cure, right?

Last edited by Em Tee : 09-10-2007 at 01:11 PM.
  #7  
Old 09-10-2007, 01:18 PM
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PropertyEconomics PropertyEconomics is offline
 
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Default

Quote:
Originally Posted by Mary Adamson View Post
2nd unit is too large for the lot so it couldn't be converted to in-law unit. The duplexes are attached on 2 walls and the configuration is weird enough that I don't think they could be melded into one really big house. City stated they would require "conversion" to SFR, but didn't state how that would have to occur. Tear down is the best option I see.

CB3? Appraise it as SFR subject to 2nd unit being torn down (or modified). Then I wouldn't have to include a cost to cure, right?

Mary .. the only problem there is thats not an "as is" but I think you could do it if they were to agree to tear it down.
My guess is the lender wants a value assuming its not there on a cost to cure adjustment basis but without the hypothetical or the subject to. Id call the underwriter ... I really would.
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  #8  
Old 09-10-2007, 02:07 PM
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Don Clark Don Clark is offline
 
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Quote:
Originally Posted by PropertyEconomics View Post
Mary .. the only problem there is thats not an "as is" but I think you could do it if they were to agree to tear it down.
My guess is the lender wants a value assuming its not there on a cost to cure adjustment basis but without the hypothetical or the subject to. Id call the underwriter ... I really would.
That's the best advice any of us could give.

And, do not get some message relayed by a phone monkey. Insist on speaking directly with the underwriter.
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  #9  
Old 09-10-2007, 03:55 PM
Walter Kirk Walter Kirk is offline
 
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Default

Is it possible that the use is grandfathered? Can the second unit be accessed from the first unit?
  #10  
Old 09-10-2007, 04:22 PM
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CANative CANative is online now
 
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Default

Unless you've got at least 3 sales of similar properties with illegal accessory units to demonstrate market acceptance and values, your client's deal is dead in the water. Cost to cure is meaningless (and most likely misleading) drivel in this case and is pure BS.
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