ADU vs. DADU

[Rare_LaFlare]

Hi,

I completed appraisal reports for an ADU & DADU of identical floorplans and square footage. ADU at 800k and DADU at 875k. Typical buyer behavior and discussion with local developers/real estate brokers indicate buyers are williing to pay an 8-10% premium for a detached nature unit in comparison to an attached styled unit. Within my appraisal report, the adjustments for attached vs. detached were 35k. The lender is asking why the adjustments are not 75k to match the price difference of the opinion of values of each unit. Is changing the detached/attached style adjustments to 75k warranted? It would create a larger disparity between the value of the units that I don't think would be reflected in the real world market.

 

[Rare_LaFlare]

Hi,

I completed appraisal reports for an ADU & DADU of identical floorplans and square footage. ADU at 800k and DADU at 875k. Typical buyer behavior and discussion with local developers/real estate brokers indicate buyers are williing to pay an 8-10% premium for a detached nature unit in comparison to an attached styled unit. Within my appraisal report, the adjustments for attached vs. detached were 35k. The lender is asking why the adjustments are not 75k to match the price difference of the opinion of values of each unit. Is changing the detached/attached style adjustments to 75k warranted? It would create a larger disparity between the value of the units that I don't think would be reflected in the real world market.

Other factors such as site configuration and appeal/utility of the condo units lot spaces come to mind. Although these units are all on one site, they each have their own implied appeal/utility of their site spaces.

 

[Dublin ohio]

Hi,

I completed appraisal reports for an ADU & DADU of identical floorplans and square footage. ADU at 800k and DADU at 875k. Typical buyer behavior and discussion with local developers/real estate brokers indicate buyers are williing to pay an 8-10% premium for a detached nature unit in comparison to an attached styled unit. Within my appraisal report, the adjustments for attached vs. detached were 35k. The lender is asking why the adjustments are not 75k to match the price difference of the opinion of values of each unit. Is changing the detached/attached style adjustments to 75k warranted? It would create a larger disparity between the value of the units that I don't think would be reflected in the real world market.

So you sources say a 8-10% premium. 8% of 800K is 64K, 10% is 80K but you use 35K and conclude that 75K wouldn't be reflected in the "real world" market. So what market are your sources referring to?

 

[sputnam]

Hi,

I completed appraisal reports for an ADU & DADU of identical floorplans and square footage. ADU at 800k and DADU at 875k. Typical buyer behavior and discussion with local developers/real estate brokers indicate buyers are williing to pay an 8-10% premium for a detached nature unit in comparison to an attached styled unit. Within my appraisal report, the adjustments for attached vs. detached were 35k. The lender is asking why the adjustments are not 75k to match the price difference of the opinion of values of each unit. Is changing the detached/attached style adjustments to 75k warranted? It would create a larger disparity between the value of the units that I don't think would be reflected in the real world market.

You adjust the direction and quantity that the data indicates. If the Lender is asking 'why?' then you have not adequately explained the support for your adjustments (or... they just haven't read what you told them).

 

[Joe Flacco]

I probably wouldn't go with a percentage adjustment for an adu.

If your subject has a detached adu and the.comps are mixed with attached and detached adu, then just reconcile the sales comparison approach to the comps with a detached adu.