2,550 s/f Guest house?

[George Hatch]

BTW, a 2,550 sf unit is pretty big to be a rental on a multi-family property, so don't be surprised if the Cost Approach comes in way high relative to a Sales Comparison or Income Approach. More than likely that size includes some overimprovement relative to what the market will return.

 

[Elliott]

 

[Tim The Enchanter]

Way to distill things, and inject a bit of humor into a technical discussion, George. :icon_lol:

And to the poster who said duplex is by nature and definition attached...
Not around here.

It can be 2 houses on 1 lot, or even 3 or 4 detached homes. Usually small things, but detached and classified as 2 - 4 units.
Just because, that's how we roll here.

Zoning is a subset of "legally permissible". The only reason you're asking that question to begin with is to perform the HBU analysis; and the only reason you're doing THAT is to identify the basis upon which the property is most valuable as a means of identifying the dominant attributes of the property, the relevant units of comparison - as a means of identifying your comps.

If the local jurisdiction allows the structure to be there and also allows it to be rented out then those permissibilities speak to the potential usage of the property independent of the County's label for that use. The County could call the 2nd unit a jail and that probably wouldn't have any impact on the types of buyers or their usage or their chosen basis of comparisons.

Identify the types of occupancy that are permissible and go from there. From the description it looks like your comps are going to be other 2/lot properties. The lender may want you to stuff it on an SFR form - which is dumb but basically allowable under the GSE programs. Don't allow that clumsiness to interfere with your valuation. Those forms are the napkins, not the valuation process.

 

[Michigan CG]

Duplex? Trying to fit a complex property on a duplex form is really not advisable. In the midwest a duplex is generally a side by side property that is typically a rental property. Around here and other multiple states a 2,500 SF detached living unit is called a complex property that does not belong on a form.

......I have an order to do a single family 1004 appraisal on a property with a 3,400 house that also has a 2,550 s/f "guest house", per MLS. It an area that is unzoned, and the property is on one tax id parcel. I notified the lender that it is a duplex, as the second house is too large to be considered an assessory unit. But after discussing this with one "chief appraiser", I got another call from another "chief appraiser" telling me that since both houses are on one parcel, it is not a duplex, but it is a guest house. Is there any definitive guideline that is used to determine if it is a duplex or a guest house? There are very few sales of properties similar to this, but there are few sales of any type in this area, and therefore I can't really say if there is market acceptance.

I would have a hard time buying that in Montana a 3,400 SF home with a 2,500 SF guest house is anything but a complex assignment and most appraisers competent to perform this type of assignment would most likely do a narrative report and would charge in excess of $2,000.

Should someone ask me to appraise a similar property in the states I have worked in the fee would start with a 3 and would have three additional zeros behind that 3. The turn time would be 6 weeks and the report would be over 50 pages long.

 

[prasercat]

Duplex? Trying to fit a complex property on a duplex form is really not advisable. In the midwest a duplex is generally a side by side property that is typically a rental property. Around here and other multiple states a 2,500 SF detached living unit is called a complex property that does not belong on a form.

I would have a hard time buying that in Montana a 3,400 SF home with a 2,500 SF guest house is anything but a complex assignment and most appraisers competent to perform this type of assignment would most likely do a narrative report and would charge in excess of $2,000.

Should someone ask me to appraise a similar property in the states I have worked in the fee would start with a 3 and would have three additional zeros behind that 3. The turn time would be 6 weeks and the report would be over 50 pages long.

The problem is, AMCs believe the appraisal world is flat. It doesn't matter where the home is located or whether it is "complex", which is a concept they don't believe in because it could cost profits. If they had no choice but to pay you more for the assignment, they generally don't get why it would take longer to do (no cognitive connection between appraiser hours and fee). For this reason, I have largely phased out my Mountain appraisal work. I'll leave it to those that do spec home appraisals up there in that custom home market. Their adjustments are few, the work is done quickly, most things of importance are ignored, and everyone is happy. Evidently, incompetence is a powerful profit maker and can readily move into areas where they are even more incompetent, which increases their profits even more while they push out the competition - a virtuous cycle in the flat AMC world.

However, occassionally, I get a lender that will pay a reasonable fee for that work, however, almost no large AMCs. It is no longer worth it; however, I still occasionally make an exception for my best clients, that unfortunately, for the most part, see the appraisal world as flat.

 

[Lee Lansford]

...

There are very few sales of properties similar to this, but there are few sales of any type in this area, and therefore I can't really say if there is market acceptance.

If you are being paid a fee commensurate with the assignment and you are willing to conduct extensive (both back in time and geographic) research--and assuming that this is not one of those "48-hr. turn-time" AMC assignments--go for it.

I have no awareness of the market for this property nor the appeal of its location, but, there remains the possibility that the typical buyer for this property may not be limited to a small geographic area in Montana.

As others before me have offered, this is a complex assignment that not everone should accept.

 

[AnonApprsr]

1000 dollar job easy. Just fyi.