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Several times i suggested an appraiser board member, or an annual appraiser survey. So now i got 8 la quinta comps, 7 with ambiguous living area, bed n bath counts bc of the casitas. And the 1 reator who called back was clueless about the rationale for a $200,000 concession. But realtors usually very helpful...I think we appraisers in SoCal should chat with the IE board and CRMLS in Orange County regarding some of these issues.
I brought up the ADU thing a few months ago, and CRMLS in Anaheim did have a speaker last month on that. Since she was an agent pushing her profit-making ADU design/building crew it was unfortunately more about sending prospects to HER than actually illuminating much re: ADU's. Her pricing put adding an additional unit at about $215,000, so where the heck is the profit/ROI for the property owner? Other than that, she provided good sources for the SB9 legislation which, in many highly populated areas, enables the property owner to expand to 4 units legally on a SFR lot with very little gov't interference. I had the opportunity to interact with some agents there about more practical matters related to the ADU's, like for goodness sakes put the square footage of the ADU on the data sheet along with actual rents. Often it's a guessing game. I told them that if they want their deals to close, and Buyer needs rental income to qualify, they handicap appraisers by keeping that info a secret because those comps are hard to find. Might be time for Sellers to prove to the agent they have permits, or to declare the work is unpermitted, in which case agents should caution Buyers to be aware and have plumbing, electrical etc inspected for safety and compliance. (I doubt agents will do that, but it falls within their fiduciary duty)
I found the Hemet office to be somewhat open to having a speaker at their meetings (who will bring the donuts!). They've had title reps, home warranty reps, L/Os etc, so it might be a good opportunity to pitch the idea of bringing in an appraiser to illustrate to the agents how they can help themselves get to closing by disclosing ADU sf & rents, for example. Some agents have said they are reluctant to include those things because they are not certain the owners went through the full permit process. The fact remains, the structure is there with tenants inside, and the agents are promoting the property as having helpful income.
Yea obviously above & beyond what's typical even for a $2M sale. I swear the realtor said "I'm calling you only so you will stop calling, texting, and emailing me." When I explained the reason for my call incuding the MLS protocol for realtors to report buyer broker sales commissoin as a sales concession, altough not an adjustment source for appraisers, he says, "listen I'm a realtor. I'm selling houses. My wife deals with that **** and she's out of town." I was able to congraulate him for having a wife who attends to detail, and to also deal with a man like him," just before he hung up on me. LOL. All these hundreds n hudreds of calls and I never had an interaction like it before. Maybe just a different world than mine, e.g., the subject's ratified lease provided to me describes the existing tenant lease...of $18,5000 a month!!!!!!!...... although now I'm trying to figure out why the subject lease is reportd in a 1007 without affecting the Opinion of Market Rent, although the subject lease history in a STR must be reported, and analyzed--as though the subject's creditworthiness as a STR is affected more by its actual lease terms than the subject's actual lease terms as a traditional lease...maybe why others have indicated that the STR is more of a commercial enterprise than a typical leased property. An appraiser with a reputation and experience in a specific STR market probably could market themselves accordingly....or would that contradict "appraisal independence." LOL$200,000 concession? decimal point in the wrong place? Good luck with all that.
How is it possible that an AVM, or a valuation based on Artificial Intelligence, can be esteemed when few of the important nuances of real property can be taken into consideration????Looks like the lender needs the appraiser's logic and analytical skills to sort that out.
Thank you. Reminds me to ask whether MLS [for example, CRMLS throughout Southern California] proivides oversight into realtor compliance with listing standards, or whether each of the individual regional realtor boards are responsible for activities of the realtors who are aligned with the specific Association of Realtors. I recently received written approval from MLS Compliance Dept to copy/paste comparable marketing narratives into the SCA addendum--which backfied on me because the review master flags dozens n dozens of realtor comments for being biased/]I would have to agree with this from Grok:
Grok:
"A detached casita is generally not considered part of the primary dwelling’s living area (Gross Living Area / GLA) in California for appraisal purposes.
Key distinctions
In California (especially Southern California), “casita” is a common informal term for a small detached dwelling or guest house. When it has permanent provisions for living, sleeping, eating, cooking, and sanitation, it is typically permitted and treated as a detached Accessory Dwelling Unit (ADU).
Under ANSI Z765 (the measurement standard required by Fannie Mae since 2022 and adopted by Freddie Mac):
- Gross Living Area (GLA) is finished, above-grade, heated, contiguous living space of the primary dwelling with direct interior access.
- Detached structures (casitas, ADUs, guest houses, pool houses, etc.) are not included in the primary home’s GLA because they are not contiguous with the main living area.
How appraisers treat them
Fannie Mae’s Selling Guide is explicit: when reporting the living area of an ADU, it should not be included with the finished above-grade square footage of the primary dwelling. It is measured (to ANSI standards) and reported/adjusted for on a separate line in the sales comparison grid based on its contributory value (or, if qualifying, potential rental income).
MLS listings and county assessor records sometimes lump the casita into total square footage (especially in certain markets such as the Coachella Valley). Appraisers for lending work generally do not, and USPAP expects the report to be clear and not misleading about the distinction."
- The exception is limited: an ADU that is contained within or part of the primary dwelling, has direct interior access, and is entirely above grade may sometimes be included in the primary GLA.
- Attached casitas with true interior access and contiguous finished space can occasionally qualify; purely detached ones almost never do.