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Bedroom Count Vs Square Footage

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ebwhite

Freshman Member
Joined
Jul 17, 2017
Professional Status
Real Estate Agent or Broker
State
California
Hey guys,

Have a listing wanted to bounce this off the appraisal buffs.

Have a home originally a 3 bedroom 1 bath 1016 sq feet. In the 1960s, owners built a rear garage with permits and converted the original attached garage (440sq ft) into a den with permits. Assessor records show legal sq footage is now 1454 sq ft which is actual footage. Later on that den was converted into a 4 bedroom and 2nd bathroom without permits. Have a ton of FHA offers. The dilema is the entire sq footage is legal but the bedroom count is not correct on assessor records.

Per HUD guidelines, will be have an issue using comps with 2 baths to get us the value?

Property is in California.

Thanks!
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Personally, converted garages are something I found rarely is valued the same as gross living area (defined by Fannie Mae) . The assessors measurement are of no consequence to me, but the lack of permitting is a dead stop and would make me want FHA to make that decision before I stamp it correct. In your market, which sounds like it is on fire, it probably won't matter but don't be surprised if the appraiser comes in lower... Motivated buyers in a sellers market is a recipe for inflated values which will burst sooner or later...and as an appraiser I don't want to be accused of over-valuing a crazy market that cannot continue on this glide path up until it stalls...Other appraisers would not pay attention to that however... and would pretty much value it at any price if it is under contract for that.

Bathroom and bedroom counts can be adjusted. Not an issue.
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
The simple answer is, it depends on a variety of things.
I think I'd be more concerned with the second un permitted bath, than conversion of a den to bedroom.
But, would have to see it. :peace:
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Do you have comparable sales of homes with bathrooms with out building permits to show market acceptance?

Additions without Permits
If the appraiser identifies an addition(s) that does not have the required permit, the appraiser must comment on the quality and appearance of the work and its impact, if any, on the market value of the subject property.

https://www.fanniemae.com/content/guide/selling/b4/1.3/05.html

The 4 requirements for a room to be considered a bedroom

http://sacramentoappraisalblog.com/...ements-for-a-room-to-be-considered-a-bedroom/
 

GA Benny

Junior Member
Joined
Oct 19, 2007
Professional Status
Certified Residential Appraiser
State
Georgia
Here is what FHA Handbook 4000.1 says (notice it doesn't say anything about permits):

iii. Additions and Converted Space


The Appraiser must treat room additions and garage conversions as part of the GLA of the dwelling, provided that the addition or conversion space:

• is accessible from the interior of the main dwelling in a functional manner;

• has a permanent and sufficient heat source; and

• was built in keeping with the design, appeal, and quality of construction of the main dwelling.


Room additions and garage conversions that do not meet the criteria listed above are to be addressed as a separate line item in the sales grid, not in the GLA. The Appraiser must address the impact of inferior quality garage conversions and room additions on marketability as well as Contributory Value, if any.


The Appraiser must analyze and report differences in functional utility when selecting comparable properties of similar total GLA that do not include converted living space. If the Appraiser chooses to include converted living spaces as GLA, the Appraiser must include an explanation detailing the composition of the GLA reported for the comparable sales, functional utility of the subject and comparable properties, and market reaction.

Alternatively, the Appraiser may consider and analyze converted living spaces on a separate line within the sales comparison grid including the functional utility line in order to demonstrate market reaction.

The Appraiser must not add an ADU or secondary living area to the GLA.
 

ebwhite

Freshman Member
Joined
Jul 17, 2017
Professional Status
Real Estate Agent or Broker
State
California
Thanks for the info.the property is a flip and in great shape. Definitely is quality workmanlike manner. The converted garage was legally converted and is now gross living area per the assessor and no longer even resembles a garage. Wouldn't that footage be included in the appraisal?
 

ebwhite

Freshman Member
Joined
Jul 17, 2017
Professional Status
Real Estate Agent or Broker
State
California
If anyone is curious to see the photos, it's on Zillow at 1232 west avenue j14, Lancaster ca
 

Ken Masla

Junior Member
Joined
Jul 17, 2006
Professional Status
General Public
State
California
Hey guys,

Have a listing wanted to bounce this off the appraisal buffs.

Have a home originally a 3 bedroom 1 bath 1016 sq feet. In the 1960s, owners built a rear garage with permits and converted the original attached garage (440sq ft) into a den with permits. Assessor records show legal sq footage is now 1454 sq ft which is actual footage. Later on that den was converted into a 4 bedroom and 2nd bathroom without permits. Have a ton of FHA offers. The dilema is the entire sq footage is legal but the bedroom count is not correct on assessor records.

Per HUD guidelines, will be have an issue using comps with 2 baths to get us the value?

Property is in California.

Thanks!

FHA doesn't care about permits only if the property is conforming.

Den can be utilized as a bedroom.

Bathroom: if it is common for the area, an unpermitted bathroom is ok.

If everything is done in a "workmanlike manner," (good quality work) then you are ok.

Call your local HUD branch appraisal help desk and talk to one of the appraisers to confirm. You might start getting paranoid reading the replies here.
 

A Brit in California

Senior Member
Joined
May 6, 2006
Professional Status
Certified Residential Appraiser
State
California
I NEVER make an adjustment for bedroom counts. I use the following and have for 11 years "The appraiser does not adjust for variations in bedroom count as any required adjustment is performed in the square footage adjustment". Consider there is no plumbing in bedrooms. When an appraiser makes an adjustment for square footage AND for bedroom count, he/she is double adjusting in my opinion. In the markets that I work in there is little if any difference between a 2, 3 or 4 bedroom home. Walls can go up or come down quickly and easily. When people understand this, they understand why double adjustments are typically wrong to perform.
 
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