2 Bedrooms + Den vs 3 Bedrooms

[Joe Flacco]

On the market for 4 days, was told multiple offers. Under contract above list price.

Is it in the price range for investors? When was the addition?

 

[CGinMN]

Well then, you are likely undersupplied.

When it's the subject, I don't listen to agents when they tell me multiple offers. Only for comps. Unless they want to show me their offers.

 

[Tom D]

That's a pretty big rancher. Personally, you got it right as a flex room Could be a bedroom for a kid, or visitor. If it sold that price and above listing price with pricing comparable to a 3 bedroom. No affect.
If there are no comps within 5 miles, you just state that. I go with GLA and room count.
Why can't the sun room be a bedroom. Then that flex room becomes a den.

 

[J Grant]

On the market for 4 days, was told multiple offers. Under contract above list price.

I was right, many buyers would like this floorplan. It looks like it has a lot of natural light and large square rooms.

 

[J Grant]

Depends on whether the market is oversupplied or undersupplied, but in an oversupplied market, this would have a longer exposure and possibly a significant discount for functional utility.

If one of my comps had this layout, I would have a hard time not adjusting, all else being equal.
View attachment 98616

If your subject and comps were built in the same age range they all might have a degree of funky floorplans by today 's standards. The question then is does the market see that as neutral, negative or positive?

 

[Tom D]

If your subject and comps were built in the same age range they all might have a degree of funky floorplans by today 's standards. The question then is does the market see that as neutral, negative or positive?

Yes, yes. The problem also is that realtors won't , or don't understand, functional issues. And there will be never be any mention in the MLS. So go guess which listing has any functional issue, or their room count. I do little row homes, and sometimes i can see a functional walk thru room to bedroom problem in a MLS photo. Finding one similar is looking at every MLS photo. Needle in a haystack. Avoid a functional issue, cause the lender will want a sim comp. Functional use can be more than one way of using it, that's why flex is a great term.

 

[sputnam]

Its conventional, I'm curious on why the loan type matters.

The loan type matters because the Lenders rule. Conventional lending has different appraisal guidelines than FHA lending. Most of the time, our Client is a lender. Theoretically, it wouldn't make any difference in the opinion of market value. The property is what it is no matter how its parts are labeled. In reality, it probably does matter to the opinion of value.

 

[J Grant]

The main problem is not the floorplan, the problem is that the third "bedroom" has no window - just a door, per OP that leads to an enclosed sun room. This makes that room now a den - though it can have flex use as a guest room- of course, an owner who does not care about a window and can put a bed in it . I see it often.

For our appraisal, we must report it as a two-bedroom; for their value in use, it is a 3 bedroom. Usually, a 3 bedroom vs 2 bedroom in the market commands a premium, but there is no hard or fast rule about it - and some 2 bedrooms sell for more than a 3 bedroom if the house offers better appeal or location.

Some folks turn a bedroom into a home office or den. I see that often as well. A flex room can be as valuable as a bedroom to many buyers.

 

[timd354]

Conventional - 3 BR
FHA - 2 BR

Conventional there are no requirements so it’s your call. This is what the HUD handbook says.
View attachment 98607

I always thought about this guideline when doing a FHA appraisal of a unit on an upper floor in a high rise condo building.

 

[shrubberyvaluation]

I always thought about this guideline when doing a FHA appraisal of a unit on an upper floor in a high rise condo building.

Yep there are many ways not everything fits nice and tight. Someone going out a window of the 10th+ floor isnt much of a fire escape, but its still a bedroom. And an elderly person might not be able to get through a full sized window, but still a bedroom. Elderly person might have more of a shot going out the door and through a room to the exterior than trying to go through a window.