Has anyone appraised a property with a casita?

[PropertyEconomics]

PE writes:
I agree ANSI is a voluntary standard (unless otherwise noted in SCOPE or state law, as you suggest). When I said it was a standard, I really didn't mean it was THE standard. I was simply stating it may not be bad to adhere to if you have nothing else to hang your hat on...

Incognito .... I snipped this from your post to make one small point that I think is important. I am in a nondisclosure state and as such square footage of comparables is not availalbe from any public source. I have to rely on MLS .. to that end, for arguments sake, if Realtors are not using ANSI standards then it would make little sense for me to, because we would be treating a home quite differently, and although the square footage differences may be negligible, they would exist to the degree that the standards of measurement are different.
Conversely, if Realtors were using ANSI then I should also to keep things even and comparative.

ANSI is interesting and will become more important as we go forward.

Thanks for your posts.

 

[Doug Wegener]

Seperate the casita out.

And value it for what its worth.

 

[Mike Garrett RAA]

I concur with those who say..."seperate it out". You can use the same adjustment per square foot or something different if appropriate. Including it in GLA is, in my opinion, misleading.

 

[Mike Garrett RAA]

Have to disagree with you Mike... I'm pulling the GLA out. There is a market difference in Arizona... whether or not you want to take the time to find a comparable property with a casita, well, that's on the appraiser and how diligent they conduct their research. Just because realtors aren't clued in enough that the GLA from a casita is not GLA, doesn't mean we have to fall into the same trap. When the typical buyer is purchasing a property, when looking for a 2,500 sq ft property, do they want 2,000 sq ft with a 500 sq ft casita inaccessible from the interior, or 2,500 sq ft of true livable GLA?

If I saw a review come over with the casita included in the overall GLA, I'm calling the appraiser out on it. The casita offers a contributory value to the property... replicate a cost approach with a casita... it does not come in at the same $/per sq ft as functional GLA.

This runs along the thinking of not breaking out basement GLA and then comparing the property to a single story. Very flawed and a significant reason why we have properties that have been significantly over valued in our market in AZ.

I recently did a purchase on a foreclosure property in Paradise Valley. Two years ago when the property was being purchased, the agent identified the property as having 4,000 sq ft. The property was actually 3,000 sq ft with an attached casita only accessible from the exterior. When reviewing sales on how the property sold for $2.2M, the sale never would have gone through if the appraiser had accounted for the casita correctly. The property would have sold in the $1.9M range. The sale on it recently was for $1.175M. If I had included the casita, the property would have comped out over $1.4M. In reality though, it appraised for $1.2M. Just my two cents...

Please tell me it wasn't a house built by my step-brother, Geoffrey H. Edmunds!

 

[Ken B]

I live in such a property, they are quite common in this area. The "front door" actually opens to a breezeway which leads to a private courtyard. To the left is a bedroom/bath combination which opens to the courtyard, but does not have direct access to the primary living space. To the right is the main house. Almost every room has access to or a view of the courtyard and everything is under one roof. Again, it is a common design in my subdivision and other subdivisions in the area. One of the reasons it is popular is that most people install pools in their courtyard area and it is a very private area.

With regard to appraisals of properties with this design, all air-conditioned area is included in the GLA line. From my perspective, the design is preferable to a standard 3/3 home with all air-conditioned area located in a single cohesive space. The semi-attached space is a combination office and guest bedroom and it is very private. Other owners of homes with this design prefer the floorplan for the same reason. It is not a good design for families with small children and if my wife and I had any, we would not have bought this house.

Compare apples to apples, but think hard before you penalize the design for its floorplan.

 

[lcaappraisal]

I actually posted the post-submission of the appraisal. I did count it seperately and will continue to do so. Was mostly looking for peer input. I agree it would be a functional issue if included and therefore, a much more complex appraisal. My comps were all new con. from the same builder so finding any real market contribution was obsolete and was not able to find any resales of properties with casitas either...probably because they were sold on total GLA without being seperated out because I know there are areas that have them. My main issue was the future problem this causes on resale. Of course, agents and appraisers have totally different opinions of this issue. Anything they think they can call GLA; they will.

 

[lcaappraisal]

This is exactly what I think on the issue. It would be VERY misleading to represent as truly functional GLA. The definition of appraisers' opinion really comes out in these things.

 

[Vegan702]

We have a couple different types here (casita's, mother-in-law quarters, whatever you want to call them), they can be attached to the main residence or detached. The ones attached can only be accessed from an exterior entrance however they are still part of the main structure. Then there are some that are detached but still connected via a continuous roof to the main structure or completely detached and a separate building with no connection to the main house.

Depending on the situation I may or may not include them on the GLA line. Those that are attached to the main residence I include and those that are completely detached I make a separate line for. In almost 99% of the cases it all equals out.

 

[Ken B]

This is exactly what I think on the issue. It would be VERY misleading to represent as truly functional GLA. The definition of appraisers' opinion really comes out in these things.

I disagree (and this CG was a CR for 16 years before upgrading), the space is very functional for the reasons I previously provided. Unless you have proof otherwise, I think you have let unsupported personal opinion affect your conclusion.

Vegan explained it very well.

 

[Tim Hicks (Texas)]

We have a couple different types here (casita's, mother-in-law quarters, whatever you want to call them), they can be attached to the main residence or detached. The ones attached can only be accessed from an exterior entrance however they are still part of the main structure. Then there are some that are detached but still connected via a continuous roof to the main structure or completely detached and a separate building with no connection to the main house.

Depending on the situation I may or may not include them on the GLA line. Those that are attached to the main residence I include and those that are completely detached I make a separate line for. In almost 99% of the cases it all equals out.

Detached,attached..it doesn't make a bit of difference. If you use that logic you could appraise an attached duplex as a SFR. Why would any appraiser, including you Ken B, want to mislead the reader of the report into thinking it is the same as any other home that does not have the inferior functional access of a casita.

So, walking to the main home in an ice storm across a patio that is iced is equal to walking down a nice, warm, dry hallway? How can exterior access only ever be more functional that interior access? Appraisers need to quit rationalizing poor appraisal practice and recognize the deficiencies in their own logic.

Those insults being said, if you have sales with casitas, why not separate them and adjust accordingly? It will support whatever logic (failed or unfailed) regarding the contributory value of the casita. Then, by chance, if one of your sales does not have a casita you will have a basis for a real adjustment if needed.

Heck, it appears that builders, agents and even other appraisers have convinced themselves that inferior functional layouts don't matter. Heck, after you convince a few in their work, you have proof in the result of appraiser supported sales.