ADU

[SBunker]

I have been asked to prepare a standard appraisal of an existing home PLUS a proposed guest house and pool. In +30 years in the industry, I have never run across this situation. Can the two be combined in one report?

 

[TerryRohrer]

Subject to completion per plans and specs. Not terribly different than new construction assignments where only a vacant lot currently exists. Be sure they are not asking for both an "as is" value and an "as completed" value to avoid working for free.

 

[Mike Ault]

I have been asked to prepare a standard appraisal of an existing home PLUS a proposed guest house and pool. In +30 years in the industry, I have never run across this situation. Can the two be combined in one report?

A lot easier to combine the two values in one report than to try to separate them out. Is it the ADU addition or the pool addition that's set off your alarm bells? Seems like a rather straightforward assignment to me…

 

[sputnam]

I have been asked to prepare a standard appraisal of an existing home PLUS a proposed guest house and pool. In +30 years in the industry, I have never run across this situation. Can the two be combined in one report?

Yes, of course. The appraisal and the appraisal report are related but are separate things. Assuming all the improvements are on one parcel of land, it's no big deal. A little more complicated if they were completely separate properties. I once wrote an appraisal report that included 65 different properties including land, condominiums, and an airport.

 

[J Grant]

I have been asked to prepare a standard appraisal of an existing home PLUS a proposed guest house and pool. In +30 years in the industry, I have never run across this situation. Can the two be combined in one report?

The way your post is written is confusing.

Did you mean to say that you are asked to do a market value opinion for an existing home, and a second market value opinion for the home with a pool and a guest house? Is this a URAR form for conventional lending, or a private assignment ?

I do not believe you can combine the two value opinions in a URAR report, but you can do it for any other type of report. However, imo it is not a good idea and two separate appraisals would be better. It needs research for a second set of comps in either case. The second value opinion needs either subject to completion or an HC as if completed.

 

[Zoe]

I would try to match pair it. Hopefully you can find a sale with pool and guest house. I would want lender to provide me cost to construct and I would lean heavily on the improvements. I don't know if you can find any comparables with both a pool and a guest house. I don't know the market. It sounds like a reasonable addition if the market supports it. At least try to find a comparable with a pool and do adjustment for cost of guest house.

you want your client to provide you a very specific cost of proposed improvements. If they are contracting it out, you can get it from contractor, but I would want the cost from contractor to go through my client and client send to me.

 

[Zoe]

If your client is a lender, they are going to want the subject to value. You many have to go back and do more than one inspection on progress for your client.

Doing "as is" won't be hard. Just back cost of construction out. You could include entrepreneurial incentive on the back out. This sounds like an in-house loan if your client is a lender. They won't be able to sell this loan to a GSE until construction is completed. They might could and jump thru hoops, but they are probably keeping the loan in house until construction is completed.

They probably have like a 6 month to 1 year rate lock on the construction loan. They may put 3 month rate lock on it and renegotiate rate after 3 months.