'As is' with accessory unit

[hastalavista]

Brother DeSaix, pardon the intrusion.. But would not that be "as if when it wasn't." ? Especially, if the stunt is pulled of using two unit comps with a cost to cure hokus pokus instead of two units + 1 illegal unit comps for a true "as is" analyses?

Maybe I read too fast...

I'm probably going to confuse myself here!
As-is when it is-not is not as-if in and by itself.
As-if when it is-not is as-if if a HC is used to get to the as-if.
Clear as mud, right (and I don't mean Harcourt Fenton Mudd!)? :Eyecrazy:

 

[HF Mudd]

This is a fairly common situation in the subject market - to make matters more confusing, frequently a building with a 2 family C of O is taxed as a 3 family dwelling.

Additionally, sometime the NYC DOB permits a third "summer kitchen" on the C of O of a legal 2 family dwelling (I did one like that this week - clear as mud indeed).

Clients can REQUEST anything they want - IMHO "as is" with a C2C is not the way to go. Personally, I would either

a) do the appraisal subject to removal of the illegal unit;
b) utilize an EA that the subject has been returned to 2 family utility;
c) run for the hills.

Offer the client a) or b) - if they don't like either, use c)

 

[AnonApprsr]

What does the market say? If the building department does nothing anyway, check off the box as illegal (if you want to EA it's illegal as others suggest) and note that the market doesn't care because the building department hasn't torn down an uncrecognized addition in 20 years.

 

[Kevin Mc]

Clients can REQUEST anything they want - IMHO "as is" with a C2C is not the way to go. Personally, I would either

a) do the appraisal subject to removal of the illegal unit;
b) utilize an EA that the subject has been returned to 2 family utility;
c) run for the hills.

Offer the client a) or b) - if they don't like either, use c)

Agreed. Seriously, when was the last time you saw a lender follow through on a C2C for removing a kitchen? That is so 80s. The UW is most likely not allowed or afraid to make the call as they will alienate the LO and "kill a deal" so they try to put the square peg in the round hole and exonerate them self from any "blame". I say "subject to", rip the kitchen out and ruin everyone's day...:icon_mrgreen:

 

[Mike Kennedy]

Hi all.. always wondered how other appraisers handle this.

I have a two family being illegally used as a 3. Client requested an 'as is' appraisal with a cost to cure to remove the illegal kitchen/unit.

My question is this.. in the sketch, description, etc.. do you show the 3 units? I know that makes sense, since it is 'as is', and that is what's there right now, but it seems misleading. For example, in the sale comparison, the subject will have a room count for 3 units, but we are appraising as a 2 family. What say you appraisers?

Client type, Intended Use, if a mortgage assignment - conventional loan GSE or an FHA loan? Which SOW guidelines applicable?

 

[Webbed Feet]

What does the market say? If the building department does nothing anyway, check off the box as illegal (if you want to EA it's illegal as others suggest) and note that the market doesn't care because the building department hasn't torn down an uncrecognized addition in 20 years.

Sigh.... Unfortunately, that line of logic is completely illogical. What the building department does or doesn't do is completely beside the point. That is like saying since "I personally have not seen anyone pulled over by police for running a red light in twenty years, therefore running red lights must be market acceptable."

The one and only question is what does the market do? If an appraiser can find copious numbers of VERIFIED sales with illegal improvements that went all the way through closing that way with the buyer(s) informed of it and the possible negative aspects of it (informed), then the appraiser has a market that has spoken. If the appraiser cannot find such sales, then the appraiser has a market saying something very different.

And no, ya can't just "EA" that the buyers knew and were informed of the negative aspects. Like their fire insurance will probably be invalid for example. And having invalid hazard insurance can get a mortgage called due and payable immediately. Might be why, for most of us, it's really tough to find such sales, with an truly informed buyer, that went all the way through closing that way.

 

[AnonApprsr]

Duck, read all of my comments. As I, and now you, say

The one and only question is what does the market do?

And a reason that market does accept an unrecognized unit is usually because the building department doesn't care and probably hasn't... in 20 years. Honestly, in places like New Bedford, Fall River, Brockton, and Dorchester/other parts of Boston, the investor always knows that the unit is unrecognized and possibly illegal. They're investing because there is that extra unrecognized unit, for which he may be counting on rent.

 

[Webbed Feet]

Duck, read all of my comments. As I, and now you, say And a reason that market does accept a legal unit is usually because the building department doesn't care and probably hasn't... in 20 years. Honestly, in places like New Bedford, Fall River, Brockton, and Dorchester/other parts of Boston, the investor always knows that the unit is unrecognized and possibly illegal. They're investing because there is that extra unrecognized unit, for which he may be counting on rent.

O.P. is in New York.....

I read...... Sometimes I try to edit in a hurry before I get quoted too! LOL

 

[AnonApprsr]

What are you going to edit, you're not making any sense Duck.

 

[Webbed Feet]

What are you going to edit, you're not making any sense Duck.

LOL! Anon, I flew over so low I should have tipped your hat.

Last I checked, most markets typically do accept legal units.