Garage is currently being converted to an ADU

[CA123]

Owners bought the home in 2022 with a nice large 22' x 30' 2 car garage in the backyard. I just appraised the home and the garage is in process of being converted into an ADU. footings are dug, driveway has been partially removed for plumbing, sewer, electrical, etc. My question is would you give the garage any value at its current state (under construction, cant park in it) My gut says "no value" but I'd like to ask the community.

thank you,
CA123

 

[Zephyr999]

Do they have cost estimates, timing to construct and permits in place? Is it an allowed use?
Check with the lender is always the best answer.

 

[CA123]

Do they have cost estimates, timing to construct and permits in place? Is it an allowed use?
Check with the lender is always the best answer.

yes, they have cost estimates, timing to construct is 2 months, and permits in place, yes it's allowed use. visually it's maybe 10-20% complete, rough electrical, trenches dug for plumbing, electrical, sewer, etc

 

[Mike Ault]

It sounds like they have temporarily turned it into a storage building or workshop. The market should recognize some contributory value for one of those.

 

[Fernando]

Whenever I see active construction, I contact the client/lender and usually the loan is dead. Client says to put a hold on the appraisal.

 

[CA123]

Whenever I see active construction, I contact the client/lender and usually the loan is dead. Client says to put a hold on the appraisal.

yes, but the house itself is perfect, just remodeled, it's just the garage that's being converted. why would that impact the appraisal?

 

[CA123]

It sounds like they have temporarily turned it into a storage building or workshop. The market should recognize some contributory value for one of those.

not really and you cant use the garage as of the date of the inspection

 

[Fernando]

yes, but the house itself is perfect, just remodeled, it's just the garage that's being converted. why would that impact the appraisal?

Mechanic liens.

 

[CA123]

here's the garage in question, there's substantial work being done to the garage and the surrounding area

 

[Mike Ault]

not really and you cant use the garage as of the date of the inspection

What physical characteristic would preclude that "garage" from being employed as a storage building? Apparently, the borrowers think having a garage is superfluous regardless. Seemingly, that house will never have a "garage" in the future.