Adult Family Home

[38Scarcello]

I appraised a home today and everything was fine\normal until I walked inside. It was an adult family home. The house had 2 rooms (hospital type) upstairs, and 4 (hopsital type) downstairs. Little old ladies laying everywhere, but they did appear to be breathing. What are we supposed to do with this?
Son of a <beep>!!

 

[Brian Weaver]

Do exactly "what" with it?

Appraise it, comes to mind. Or not.

What's the real question?

 

[38Scarcello]

The real question is "what am I suppose to do with it?"

Just mark "owner" & "tenant", since the borrower said they live there? I can't believe it is that easy. There has to be a catch.

 

[Derek Harkrider]

Zoning and permits may be a problem. This is a commercial type of property. Call your client and let them know the current use of the property as it may violate lending guidelines.

 

[TEL2002]

Start with zoning. Is a nursing home a permitted use? It sure sounds like a minature nursing home.

You mentioned all of the elderly in the 6 rooms. Where does the borrower sleep???????????? I know you are not a building code inspector...but is there handicap access to the building? Are the bathroom facilities designed for the handicapped? I guess where I'm headed with this is, has the building undergone conversions that are obviously required/typical for a nursing home?

You could call it a "holding tank for the elderly".

 

[brittabbey]

What was the original assignment and scope of work? Were you asked to do a SFR appraisal on the subject? What's the highest and best use of the property? Is this a nursing home or a boarding house, and if so would it fall into the category of commercial and out of your field of expertise as a certified residential real estate appraiser?....

These are the questions that would come to my mind first.

I had a similar situation where I was asked to do a SFR appraisal. When I got to the subject I found that the home was actually a boarding house where room rentals included meals and utilities. The borrower had told the lender that this was a SFR. I contacted the lender to aprise them of the situation, and they cancelled the order, paying me a trip fee.

 

[Brian Weaver]

If its a "group" home...for the elderly or for the physically or mentally handicapped, local residential zoning generally permits the use under R-1 or whatever a similar designation might be...but not always. You need to verify that FIRST.

Is this a charity operation? Are they paying real property taxes? Are they exempt? Is there a variance involved? Is the lender treating this as somebody's house or do they understand the use?

If the taxes are exempt...the lender needs to know. This could red-flag the transaction.

Figure out what you're doing before you get in too deep.

 

[Terry McCulloch]

I've completed a couple of similar use homes in the past. Most Adult care homes can be operated legally in residential areas as long as they have the proper state licensing.

"Subject is currently owner occupied as an in-home adult family care that includes 6 residents. Homeowner is licensed with the State of Washington (#XXXXX) as an adult family home and with the City of XXXXX (#XXXXXXX).

Subject current use is legal as a single family residence and as an adult family home with 6 residents. There appears to be no adverse marketability nor salability issues at the time of inspection."

Research not only county but city ordinance and/or zoning. I know that it is legal have up to 8 unrelated persons living in a residence in the Seattle city limits. Most adult care homes have had minor adjustments/remodeling such as wider hallways, grip handles in bathrooms, ramps but are easily curable and/or adapted to typical buyers use.

-tmc

 

[Webbed Feet]

Mr. Donahue,

I must love to disagree with other posters. Most adult foster care homes in my area have been too far converted over to adult foster care use, a income producing operation, to any longer be called just a SFR home. Often, with licensing for that use, comes city regulations requiring extensive fire code changes to the buildings and other changes that become over-improvements to any SFR market. Then the darn things get chopped up into so many bedrooms for the size of the building often it's amazing! So instead of a curable functional it is in fact incurable functional obsolesence for any consideration of the SFR market. Not only that, these puppies sell for a premium to the Adult Foster Care market because the buildings have already met the more stringent city codes. So comparable sales of them are reflecting far more than any normal SFR market. The trend in my area is for them now to be built with adult foster care in mind in the first place.. not any simple SFR home.

My first, and normally last, act on one of these is to inform my client we have a mixed use property in front of us. Typically, if my client is a bank, the appraisal order gets canceled by their appraisal department shortly thereafter.

Barry Dayton

 

[Brad Ellis]

Patrick,

You have described an adult care facility.

NO LENDER IN AMERICA WILL MAKE A RESIDENTIAL MORTGAGE LOAN ON IT IF THEY KNOW WHAT IT IS UNLESS THEY HAVE ALREADY TAKEN THEIR DRUGS.

Tell the client what you saw and let them tell you if they wish to proceed.
If they do make sure they know you will be calling this an adult care facility in your report.

Do NOT back down. It is being used as such and if you fail to report it that way your report will be misleading.

Brad