In-law Unit

[zhencai]

I'm trying to do an appraisal for a property that recently got an addition of an in-law unit with permit. Bank wants to see 3 similar properties, also with in-law units, as comps. However, I searched the MLS records for the whole area, none of them has in-law unit. What would you do in such condition? Thanks.

 

[Randolph Kinney]

Down here, the in-law unit is counted in the GLA and reflected in the county record as one unit with that much GLA. It is impossible to screen or search for.

The MLS may disclose the in-law unit but does not break out how much of the total GLA is the in-law unit.

I have to do a manual search to find all the in-law units from the MLS and then call either the Realtor or HO to get the approximate SF and description of the in-law unit. We have both with and with out permits. It is a pain. One needs to charge more for this.

 

[ghrousseau]

Are they row house in San Francisco?? Maybe you could use comparables with a legal finished basement? Often they are used for the same purpose and have somewhat similar utility.

 

[hastalavista]

I'm trying to do an appraisal for a property that recently got an addition of an in-law unit with permit. Bank wants to see 3 similar properties, also with in-law units, as comps. However, I searched the MLS records for the whole area, none of them has in-law unit. What would you do in such condition? Thanks.

I try to tell the bank, as professionally as possible, that their condition cannot be met.

Lenders are withdrawing into themselves (my term) and are being very cautious on their lending guidelines. That's life. I've never considered my failure to meet a lender-specific property-unique criterion as a failure of my appraisal ability. They are requiring a comparable guideline that may not be possible to meet. It is a property standard which I have no control over.

As a reviewer, I work with UWs and lender guidelines that sometimes request things that the appraiser cannot deliver. As a reviewer (when I'm involved in the request) I make a point of offering my opinion that the request may not be within the ability of the originator of the report to comply with. The lenders I work with do not consider the inability to meet a unique request as an appraisal deficiency.

Good luck!

 

[The Warrior Monk]

In my area, homes with a legal apartments (in-law or otherwise) are assessed differently than homes without them. For example, for properties with a SFR use, the assessor's code is 210. The code for a SFR with an in-law unit is 220. Since we have the ability to search by assessor's code, we can find the properties classified as 220. Once these sales are found, additional verification is required, since code 220 also includes legal two-family residences, as well as homes with illegal apartments (assessor here taxes on use, whether legal or illegal).

 

[Mike Boyd]

If you go back in time far enough, you should be able to find at least one. Since they want 3 and if you cannot find 3, merely state that no others were found. From older sales, you can develope a percentage of its affect on value. If you cannot find even one, look for listings or pendings. If none of those either, follow Denis' advice. I do not adjust for differences in size for in-law units. A granny is a granny. Usually they are so small any adjustment would be moot.