ADU to be included in GLA

[Overimprovement]

Other utilities besides electric may be shared as well. Have seen numerous duplexes with two meters but shared water or sewer lines. Owner pays so not an issue from income perspective.

 

[sputnam]

Because... everyone's definition of GLA requires that the space be heated, finished, above the ground, and contiguous. Period. End of the story. GLA is NOT the same thing as heated, finished square footage.... If that were the reporting requirement, then yep.. you would include it.. along with the finished basement.

 

[Tru Red]

Requirements for an ADU. Notice how they use the words: typically, may, can, etc.

Some of you will never come off your high horse and stop thinking EVERYTHING is either black or white.

What is required for accessory dwelling units (ADUs)?

selling-guide.fanniemae.com

 

[Tim Hicks (Texas)]

Yes, but you are claiming it is not ADU, but GLA.

What is included in the appraisal report for a property with an accessory dwelling unit?
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What is included in the appraisal report for a property with an accessory dwelling unit?

Accessory Dwelling Units​

An ADU is generally an additional living area independent of the primary dwelling that may have been added to, created within, or detached from the primary dwelling. The ADU must have basic requirements for living, sleeping, cooking, and bathroom facilities on the same parcel as the primary dwelling. See B2-3-04, Special Property Eligibility Considerations, for complete ADU eligibility requirements.
When reporting the living area of an ADU, it should not be included with the Gross Living Area calculation of the primary dwelling. It should be reported and adjusted for on a separate line in the grid, unless the ADU is contained within or part of the primary dwelling with interior access and above grade. If a standalone structure does not meet the ADU minimum requirements, it should be treated as any other ancillary structure and included as a separate line item in the sales comparison approach then adjusted based on its contributory value to the subject property.
Whether a property is defined as a one-unit property with an ADU or a two- to four-unit property will be based on the characteristics of the property, which may include, but are not limited to, the existence of separate utility meter(s), a unique postal address, and whether the unit can be legally rented. The appraiser must determine compliance with this definition as part of the analysis in the Highest and Best Use section of the appraisal. When there is an ADU, the appraisal report must include a description of the ADU and analysis of any effect it has on the value or marketability of the subject property. The appraisal report must demonstrate that the improvements are acceptable for the market. An aged settled sale will qualify as a comparable, and an active listing or under contract sale will qualify as a supplemental exhibit to show marketability.
Zoning for an ADU
If it is determined that the property contains an ADU that is not allowed under zoning (where an ADU is not allowed under any circumstance), the property is eligible under the following additional conditions:

• The lender confirms that the existence will not jeopardize any future property insurance claim that might need to be filed for the property.
• The illegal use conforms to the subject neighborhood and to the market.
• The property is appraised based upon its current use.
• The appraisal report states that the improvements represent a use that does not comply with zoning (“illegal” use).
• The appraisal report demonstrates that the improvements are typical for the market through an analysis of at least two comparable sales with the same non-compliant zoning use. Aged settled sale(s) with the same non-compliant zoning use are acceptable if recent sales are not available. At a minimum, the appraisal report must include a total of three settled sales.

Ansi Standards:

 

[RSW]

It is apparent the Brit lacks basic appraisal skills based upon comments made in a few threads lately.

 

[Tim Hicks (Texas)]

Does California require ANSI standards for measuring houses? Texas does not require it, but some states do. I have seen sanctions where appraisers have been required to take an ANSI course.

 

[J Grant]

Some appraisers seem to get confused, because Public/tax records will include an ADU in the overall sf , or because MLS includes it. Which does not mean appraisers should include it.

Tax records include it so they can generate more taxable revenue. MLS includes it because they want the houses to read as "bigger" and good old RE agents love to double dip - including the ADU sf in the overall sf, AND touting it as a feature .

But appraisal for the many reasons seen in posts do not include the sf of ADU in main dwelling. Customary to line item the ADU as a feature and adjust for it.

 

[Tru Red]

It is apparent the Brit lacks basic appraisal skills based upon comments made in a few threads lately

Clearly I have no clue what I'm doing. Why would any appraiser do what the marketplace is telling him/her to do?

You must be right.

 

[J Grant]

Clearly I have no clue what I'm doing. Why would any appraiser do what the marketplace is telling him/her to do?

You must be right.

I am not sure what this means in context of the thread....
A marketplace tells us price, trends, and can inform our adjustments - buyers pay more for X and less for "Y.

But the client also relies on us that the physical characteristics of a property be accurate and truthful, and reported per acceptable standards. Even if the market "sees" the living area of ADU and dwlling as one, the reality is the ADU and the main dwelling is not a single lumped together sf in an appraisal.

We can adjust for and ADU as much value the market tells us of course, when we line item it for its own adjustment as a feature.

 

[Tru Red]

I am not sure what this means in context of the thread....
A marketplace tells us price, trends, and can inform our adjustments - buyers pay more for X and less for "Y.

But the client also relies on us that the physical characteristics of a property be accurate and truthful, and reported per acceptable standards. Even if the market "sees" the living area of ADU and dwlling as one, the reality is the ADU and the main dwelling is not a single lumped together sf in an appraisal.

We can adjust for and ADU as much value the market tells us of course, when we line item it for its own adjustment as a feature.

All it means is whomever RSW is he/she/it is not well informed. They don't know me, I don't know them. Yet they posted "It is apparent the Brit lacks basic appraisal skills based upon comments made in a few threads lately." He/she cannot see the world past their own nose.

I'll just put them on ignore like a few others I cannot tolerate anymore. A person like that litterally only see's the world as black & white. Appraising is not black & white. It is about opinions, marketplaces, change, etc. Practicing law is not black & white. It is based on opinions and changing societies.

An ADU is defined differently, in different marketplaces. Even the GUIDELINES allow for this, when they are read. ADU's are not all EXACTLY the same.