I live in a lakefront community where there isn't a track builder, all homes are custom built and have to be minimum sq. ft., garages in a certain direction from the street and no trailers or boats can be left in the driveway overnight are you get a letter from the HOA the following day. They are very strict. He put in the appraisal that the guest house was atypical, whatever that means. I heard that banks (the buyer was using Chase) hire appraisers to lowball the appraisal prices (I have no idea how true or untrue that is) and buyers should use mortgage companies, I do know that they didn't have anyone that worked this part of the area so they told the appraiser to name his price to make the 70 mile drive out here.
Atypical means that it is not a common amenity. If it was typical then comparable sales could be found. Why would the appraiser not give a value to the ADU? Well for example I give absolutely no value to a pool in my area. Why? It's simple, if people wanted them they would put them in on a regular basis. If I was in Phoenix it would be different. All kinds of houses have pools and if a house doesn't have one it will negatively affect value. But in my area it does not matter how much that pool costs, people in my area simply do not want them and in fact see them as a negative because it costs to maintain them. And I have tracked this over and over again and other appraisers in my area say the exact same thing.
There are times that a "so-called" amenity may actually negatively affect value. I've seen it. Think about this from a buyer's perspective. It sounds like you have a really nice ADU. But someone who buys it has to have a very specific purpose to buy it because; They have to be willing to pay the extra insurance, taxes, upkeep, utilities etc. If it would be me, I would see it as an unnecessary expense. Something I really don't need. Therefore I do not want to pay for it.
I may be the typical buyer in that market. In fact it is probably the case if there are no other properties with ADU's that buyers simply do not want them.
Let me give you another example. I once did an appraisal on a property that had an indoor pool. It was incredible. I could give no value to it. Why? Because there were no sales stating it has any market value anywhere. I went back as many years as I could and looked all over in competing markets. Nothing was found. Therefore I gave it no value. And again think about the hassle of having a separate building with an indoor pool. Heating costs, taxes, liability, etc. Most people in my area fill pools in when they get them. How do you fill in an "indoor pool?" In my opinion I could even see making a negative adjustment for having not only an amenity no one wants, but one that is a hassle.
So I can completely understand why an appraiser would give an ADU no value:
1) There is no evidence in any similar markets it is a desirable amenity.
2) The appraiser can't just make an adjustment out of a hat. He has to support it in some way by market evidence.
Now I am not saying it has no value. I'm just saying there is a possibility it has no value, because when the extra taxes, upkeep, etc are taken into consideration people may say, "O.K. I will buy the property, but I don't want to pay more than a house without it. Because now I have to pay the upkeep etc for it. Maybe it's worth it, but only for what I have to pay for taxes and upkeep, etc. "
P.S. Just because one buyer wants it doesn't mean anything. I have regularly appraised properties for less than what some buyer wants to pay for it. They were ill-informed buyers.
FP=$2000
