2 houses 1 lot PLEASE HELP

[Kevin A. Spellman]

I would identify the first building built as the main dwelling and then identify the second building as detached living unit. I would review the location of the utilities. Is the water/sewer shared? Is the electricity shared with a sub panel? If the utilities are separate there is a strong possibility the two homes may be legal. Was the second structure a conversion from an outbuilding or a garage? Was it originally built as a living unit? I would proposed a question to the building/zoning officer and ask if two buildings are permissible if a pre-existing property with two homes could be rebuilt if destroyed.

Here in MA we did not adopt zoning until 1948. It was quite common prior to 1948 for two homes to be built on one lot. These properties today can be subdivided and become two lots today.

 

[CANative]

Sounds like it might be illegal in which case the lender would need to know, as they won't loan on an illegal situation.

This should read "some won't loan on an illegal..."

Fannie/Freddie will purchase or securitiez a loan on properties with illegal 2nd unit under some situations but the appraisal and underwriting must meet their requirements.

We will purchase or securitize a mortgage secured by a one-family or two-family property that includes an illegal additional unit or accessory apartment (which may be referred to as a mother-in-law, mother-daughter, or granny unit) as long as the illegal use conforms to the subject neighborhood and to the market. The property must be appraised based upon its current use and the borrower must qualify for the mortgage without considering any rental income from the illegal unit. The appraiser must report that the improvements represent an illegal use and demonstrate that the improvements are typical for the market through an analysis of at least three comparable properties that have the same illegal use. The lender also must make sure that the existence of the illegal additional unit will not jeopardize any future hazard insurance claim that might need to be filed for the property. We will not purchase or securitize a mortgage secured by a three-family to four-family property that includes an illegal accessory apartment.

If they're both legal it would seem you have a duplex.

Maybe, maybe not.

Otherwise, that could be a breach of confidentiality.

What's confidential about improvements on a lot? You might pixx off the property owner if he gets in trouble but he shouldn't have violated zoning ordinances. I've never had a client tell me that his borrowers property was illegal and to not let the cat out of the bag to the authorities.

Some lenders will try to tell the appraiser to "give no value" to property conditions which are adverse to their loan scenario. This is problematical and could be an unacceptable assignment condition. The appraisal has to reflect market reaction to property characteristics... good or bad.

 

[wickedness1]

This should read "some won't loan on an illegal..."

Your right, sorry

 

[wickedness1]

I've never had a client tell me that his borrowers property was illegal and to not let the cat out of the bag to the authorities.

We have--- Good Ol' Landsafe

 

[Terrel L. Shields]

I appraise farms that have 3 or 4 dwellings. Sometimes they have dwellings plus a mobile home that isn't even owned by them. Belongs to in-laws or Junior. Big deal. Its not a secondary market appraisal unless the second dwelling is an "accessory unit". I cannot define a second dwelling stand alone as a "duplex"...a duplex in my definition is a semi-detached dwelling of 2 units. A triplex 3 units. A fourplex 4 units.

If this is a secondary market appraisal, then you need to discuss with the client what they want. If its legal go for it.

 

[Annelle]

The other thing to look at is, if it is zoned SFR, but permits granny units (or similar name). Often the granny unit has limitations in size such as 1000 max,and may or may not have it's own meter. And/or it might have been grandfathered in. And As Kevin mentioned, if it has more than one meter, it is more than likely permitted. If it is legally permitted as a granny unit, the appropriate comps would be similar properties with similar granny units. The other aspect to consider, is it being used as a rental?

No matter what scenario, by now I'm sure you have been convinced to contact the lender.

Terrel, here in California, detached duplexes are common, and the market generally has a preference for them. Sometimes only the garages or carport have a common wall. What would you do with a parcel that has two homes on it that is zoned R-2? Does that not exist where you are at? Just curious.

 

[TXCBoy36]

If they're both legal it would seem you have a duplex.

What is the current use and what is the Legal use? Sounds like you are dealing with a Detached Duplex....sounds like you need some more information.

JC:new_snipersmilie:

 

[Webbed Feet]

i have been asked to appraise 2 houses on 1 lot (Refi), does anyone have any experience with something of this nature? It appears the owner built 2 houses on 1 lot. County tax records only show one improvement. Should this be treated as a home with a separate living quarters? I am what this site considers a newb, my guess is that this requires 2 appraisals. Please help.

-Best Regards

MedinaAppraisal,

Actually, it "sounds to me" like you need to follow USPAP and inform your client that you are not competent for the assignment. And please understand that because you have no idea how to go to a jurisdictional authority planning / zoning and permit departments in order to research your subject, and you have no idea how to handle a highest and best use analysis. This would make you barely qualified for any assignment involving real estate at all. If I were you I would want to send a note to whoever is training you, or did train you, that had "Thanks for nothing!" on it. In fact, let me know who they are or were! I'll send em one for you.

So now it is time to personally deal with the fact you've been trained to fill out forms versus understand how to appraise real estate. Because appraising real estate all starts and stops with highest and best use and ones SOW. Two things that should have been covered first in your training, not forgotten until after you were licensed. The people that trained you did not just drop the ball, they apparently never knew there was one. You should seek out far more help than this forum, and fast. Because you don't know how to identify what it is you are appraising. Or should I say how to identify what you are appraising "is."

This is the most constructive advice I can provide for you.

Webbed.

P.S. Consider this. If you can't identify what something "is," even when it is as simple as residential real estate versus commercial, then this means you also assuredly cannot identify when you are out of scope of your license on an assignment. Because how could any of us begin to understand if an assignment is "complex" when we don't even know what it "is?" And since you have no idea what these improvements are in your market, I would suggest the assignment just may be complex. You better consider your license type and that transaction value before proceeding. But am assuming Texas has similar licensing laws as my state.

 

[uncle fish]

Probably not legal.. no value is attributed...

 

[Fritz in NY]

If legal and CO's are present, I have been able to utilize the larger dwelling as the subject with the smaller property having little or no contributory value. I have many older rural homes with a 1 bedroom "shack in the back" that was or still is a living unit. No way to find comps, so we add a suggested value for the "shack" like we would a porch, pool etc.
Getting the applicant to order a $ 1,500. survey to divide the lot, produce and file a new deed, is not going to happen. (But in some cases it makes a lot of sence, they would now have 2 distinct properties to play with) refi one, payoff the other etc.