Converted 2br From 3br HBU Question

[J Grant]

I'll get back to you on it ! I believe for OP problem mine and other posters see the problem same way you do, but we do not classify the obsolescence and adjustment for it any longer under the HBU umbrella. That seems to be the main differential. If I take an additional class I will let you know the result.

 

[hastalavista]

If I take an additional class I will let you know the result.

That sounds fair enough. Thanks.

 

[Amy Perkins]

You just need to have a two bedroom in the grid and if there is a difference after you adjust for everything else; that is the value of the additional bedroom. Also, you need to find out what your market consists of, if it is a lower income rented area; the bedroom would matter more. If it is a gentrified area with boomers who own most of their homes, then adjusting for the gross living area should be enough. I work primarily in a luxury market and almost never adjust for a bedroom, but I do adjust higher on the gross living area. Some appraisers think you are adjusting twice. I would say that a two bedroom is not a functional obsolescence item, but a one bedroom is.

 

[Amy Perkins]

Functional obsolescence implies that the improvements are devalued because it negatively affects marketability.

 

[Mike Garrett RAA]

IN MY MARKET a two bedroom of the same size as a three bedroom is not functionally obsolescent. A one bedroom of the same size (GLA) would be. Of course there are always exceptions to any rule. Underwriters will almost always want to see at least one 2 bedroom comp.

 

[J Grant]

Whether or not a 2 bedroom of same size as 3 bedroom has functional obs is up to each appraiser to find out via analyzing their market with focus on subject sub market and who the buyers are for it. That is part of appraiser competence, not making an assumption or applying a rote adjustment.

 

[Tom4value]

Others have said and I will reiterate. HBU refers to the use of the property so yes, it is in it's HBU. Just do a functional adjustment to put up a wall and door.