ADU superior to main dwelling

[PNW RE]

The main dwelling was built in 2017. The owner paid $40k+ for a gravel road and utilities to the ADU. The parcel is located in a large lot rural gated community with zoning that allows 1 DU/10 Ac and an ADU up to 1,250sf, so subdivision is not an option as the parcel is slightly under 20 ac and has some wetland issues. This is basically two separate dwellings with independent utilities (well, septic, power, propane), however is being appraised as a SFR with an ADU due to the zoning. Again, cost for everything exceeds $1M. I'm not too stuck on the costs, however it is an aspect of the valuation. This is certainly an over improvement, but comparing the high quality ADU to a 600-800sf lower quality does not seem correct.

 

[J Grant]

The main dwelling was built in 2017. The owner paid $40k+ for a gravel road and utilities to the ADU. The parcel is located in a large lot rural gated community with zoning that allows 1 DU/10 Ac and an ADU up to 1,250sf, so subdivision is not an option as the parcel is slightly under 20 ac and has some wetland issues. This is basically two separate dwellings with independent utilities (well, septic, power, propane), however is being appraised as a SFR with an ADU due to the zoning. Again, cost for everything exceeds $1M. I'm not too stuck on the costs, however it is an aspect of the valuation. This is certainly an over improvement, but comparing the high quality ADU to a 600-800sf lower quality does not seem correct.

so what is "correct" ? What else is there to compare an ADU to, besides other ADU's in the market area?
If most of the ADU's in area and subdivision are smaller/lower quality, then the market is saying something-

 

[PNW RE]

so what is "correct" ? What else is there to compare an ADU to, besides other ADU's in the market area?
If most of the ADU's in area and subdivision are smaller/lower quality, then the market is saying something-

I agree for the most part, but someone has to be the first to build a high quality ADU. Someone was the first to have a smaller/lower quality ADU otherwise there would be no comps. I just finished a condo report where the subject was the highest priced in the complex (highly superior condition), which I was able to support from units outside the subject complex. Unfortunately, that's not the case with the ADU appraisal.

Would the market pay more for a higher quality ADU? Perhaps, but as the appraiser I need to support that conclusion.

 

[Joe Flacco]

I would call agents and see what they think about it.

 

[J Grant]

I agree for the most part, but someone has to be the first to build a high quality ADU. Someone was the first to have a smaller/lower quality ADU otherwise there would be no comps. I just finished a condo report where the subject was the highest priced in the complex (highly superior condition), which I was able to support from units outside the subject complex. Unfortunately, that's not the case with the ADU appraisal.

Would the market pay more for a higher quality ADU? Perhaps, but as the appraiser I need to support that conclusion.

In a higher price range that you describe buyers are more likely to pay a premium...to a point. You'll work it out!

 

[PNW RE]

In a higher price range that you describe buyers are more likely to pay a premium...to a point. You'll work it out!

Much appreciated! It's nice to see perspectives from fellow appraisers across the country...I always seem to figure out these odd ball properties.

 

[Mike Kennedy]

Absolutely, I'm just trying to see if there is a way to support a credible opinion of value.

never mind - didnt see post 21

 

[bnmappraisal]

I would call agents and see what they think about it.

Good advice here, IMO.
It doesn't hurt to reach out to agents from your area who deal with $1m properties to get their perspectives.
This can be very helpful and can help you support a credible opinion of value

Just take good notes of the conversations and stick it in your workfile

 

[ZZGAMAZZ]

The good news is the ADU is just one component among the above - it is a super adequacy, but then again in a high value area of this price range, buyers pay a premium for new/well finished.. I'd make a qualitative consideration of its age and quality in the reconciliation, , A harder part may be finding an ADU that size in the comps? it's always about finding good /similar LEE'S CROSSING PL 1 LT 18 BLK 1 and there will be a lot to adjust with different acreage and main dwelling sizes and out buildings etc -.the ADU won't present that great an issue in the context of the whole.

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I recently created a new word that comes in handy very often . . . SUPERINADEQUATE !!!!!

 

[CANative]

Doing one now. City lot with a 980 sf MH and an 800 sf site built. The only comp is the one I was talking about earlier in this thread.

Form? 1004C with site built ADU or 1004 with MH ADU? lol