living quarters over garages

[emeryalan]

I have a question for you all. In the past few months I've had 3 of these appraisals, where someone builds a garage (24 x 24, 30 x 30, and 40 x 30) with living quarters above them. Due to the roof line, the living level is actually smaller than the garage. (These are the main/only dwellings, not guest houses or anything like that.)

I have been bluntly honest in my reports, calling the "Living Quarters over Garages" as style. Even though only one of these garages can actually be considered below-grade, I have been calling them "basements" in terms of adjustments, utility, etc. (With disclosure and pictures that two of these "basements" were actually 100% above grade.)

I don't have anything similar for comps, so I have been using raised ranches or even just regular homes with basements (again, with lots of commentary).

Since I am apparently fated to get these types of properties, I was wondering how some of you might handle it?

Anecdote: One of the garages was 30x30, timber-frame instead of stick-built, with 1.5 stories above the garage (2.5 stories total), with a gigantic pentagram taking up the entire side of the building. I would love to post the picture here, but I'll have to get some feedback as to whether or not that's ethical. Thanks!

 

[The Argus]

I've done a lot of houses similar to the one you are describing. Are the houses in mountainous areas? We describe that construction style as "mountain contemporary" In most of our mountain markets, the market accepts finsihed area as GLA. Metropolitan guidelines do not typically apply (this may or not be the case in your area). In any case, the way I've handled houses like that (I've appraised 25 or more like the one you described) is if there is finished area adjacent to the garage, depending on market acceptance, it is part of the overall GLA, the upper levels are also GLA. The style (in my area at least, is MtnContemp)

What part of Montana are you in?

 

[Terrel L. Shields]

bluntly honest

I have been calling them "basements" in terms of adjustments, utility, etc. (With disclosure and pictures that two of these "basements" were actually 100% above grade.)

That's nuts. They are not "basements"....and that is what I call "bluntly dishonest"....

A finished room over garage is just that. If finished to the same grade and attached to the house with a stair access from the main living then it is a second floor and part of GLA. If not, then the room is like an attic room or other "below grade" room. "Below Grade" does not refer to below the elevation, but lower grade (quality)..

 

[CANative]

Terrel,

I'm pretty sure the OP is saying that these properties have nothing but the garage with a dwelling area above and, in some cases, the living area is even smaller than the garage.

It is unusual, but I've seen them in some of the areas I work in. Usually, they build these to live in temporarily (a couple of years?) while planning and building the larger residence.

 

[Terrel L. Shields]

I would treat them as "cabins"....if there is not associated dwelling or/and use an appropriate grade. The big factor is that the "market" may deduct a big chunk for being inappropriate as a dwelling...i.e.- a functional inadequacy.

 

[CANative]

I would treat them as "cabins"....if there is not associated dwelling or/and use an appropriate grade. The big factor is that the "market" may deduct a big chunk for being inappropriate as a dwelling...i.e.- a functional inadequacy.

That's kind of how I would (and do) handle it. Sometimes "land comps" are good comps for this type of setup.

 

[emeryalan]

Woah, sorry I haven't gotten back to this. It's been just crazy out here.

OK ... I am in NW Montana, Kalispell to be exact. It is a valley surrounded on all sides by the Rockies, with 2 very expensive lakes (~40,000 per linear foot back in '06), ski areas (Big Mountain and Blacktail), National Forest & timber company land. We have pretty much everything for terrain except ocean, and every kind of house from mobiles to $20M+. It's all mixed up, too. Especially on the lakes, we have multi-million dollar homes cheek-to-cheek with mobs and cabins. We have mobile parks across the street from $300k subdivisions, in-town fair-quality homes next to historic mansions, and $500-$750k subdivisions next to the major retail sector. It used to be poor and agricultural, but we have had a tremendous influx of people with more money than sense in the past 5-10 years. Even some of our new construction homes have 1 or 2 bedrooms with 5000 SF. It's quite a mix.

@ Jay Rossi - You could call this a "mountainous area", but our "mountain contemporary" would be more like a log home, I think. Did you have similar properties for comps? There are a lot of these properties out here if you drive around looking for them, they just don't sell (or even get listed).

@ Terrel - I would appreciate a little benefit of the doubt. After all, you quoted me saying there was disclosure and photos, so I don't see how you can call that dishonest. The levels in question serve as basements and garages, so that's what I compared them to.

@ Greg Boyd - That's exactly correct ... it's a standalone garage with living area above (and above only), and due to the roof line there is (usually) less SF LA. Most of the ones I see are exactly as you describe, "temporary" places to live while the owners construct a bigger home.

But the three I did are not temporary ... they are pretty much all that's going to be there forever. Terrel, there was only 1 similar sale in the past 18 months, and in the most recent report it had the highest (adjusted and unadjusted) sale price. Therefore I have no market-derived functional depreciation.

Greg, do you mean that you use vacant land sales as comps? I appreciate the opinion, I'm just not sure I understand ...

Thanks again for the input!

 

[Terrel L. Shields]

The levels in question serve as basements and garages, so that's what I compared them to.

You call them "100% above grade".....I don't classify that as a basement. What makes it a basement? Concrete walls??? I'm missing something in the visual department here.

Therefore I have no market-derived functional depreciation.

And your judgment is that the market won't deduct for this partial construction? I defer to your judgment on the ground there but the absence of evidence is not evidence of absence. IMHO, functional obsolescence is likely to exist and should be accounted for with or without current local sales. You either need to go further out or you need to go further back in time and find a sale of a similar partially completed project and see if the market allowed full credit for the RCN to that date. I suspect that it will not.

 

[Joe Booth]

Are these areas finished with permits? Does the Assessor recognize the square footage?

 

[Mztk1]

They sound like a modified stilt house, with a garage instead of a carport.I've had stilt houses exactly like you desribe, one shaped like an "A", a garage below, a main level slightly smaller, and then a loft with master suite and bath.