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Multi-Family or SFR with Guest Suite? HELP!

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ssr495

Thread Starter
Freshman Member
Joined
Jun 20, 2007
Professional Status
Licensed Appraiser
State
Arizona
This is a difficult assignment and I need some advice.

The subject:

Single level built in 1970. Living area = 2384 sq. ft. but has 1125 sq. ft. room added on. Currently zoned Multi-Family, however zoning classification also allows for SFR.

Main living quarters has 3 BR/2 BA and a kitchen.

Attached unit has 1 BR/1 BA, a full kitchen and 2 separate enterances.

The subject has one power meter.

The subject was purchased 11/2/04 for $150,000 and per owner, was in unlivable condition. The subject has since been completely renovated with granite countertops, travertine shower, tile floors, etc. The exterior block construction has new stucco applied to give it a newer look.

And to top it off the subject is located next to a industrial complex.

The dwelling functions as a rental unit or investment property.

There are no similiar duplex comps within several miles that have even closed within 2yrs of the subject. However, there is one duplex over 1000 sq. ft. smaller than the subject that closed within 12 months, but it's a two story.

DOES ANYONE HAVE ANY IDEAS ON HOW TO DO THIS ASSIGNMENT?

The subject functions as a multi-family, has two kitchens, and the attached living quarters has separate enterences...so I guess I have to appraise this thing as a Multi-family, correct? Or can this property be appraised as a SFR and make functional utility adjustments for the two kitchens?

ANY HELP WITH THIS ASSIGNMENT WOULD BE GREATLY APPRECIATED.

Since everything has value there has to be a solution. I am sure this deal will be reviewed every which way from Sunday also, so I want to make sure it's done correctly.

Thanks for you help.

I've attached the subject's Tax Record for your review.
 
Last edited:

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
I assume the assignment is for a mortgage loan and the client wants the appraisal reported on one of the new Fannie Mae forms (1004 with ADU or 1025 small residential income property).

Refer to the certifications you must sign and read Certification #11. Will it be a true statement if you sign the certification?

Sometimes it's best to withdraw from an assignment.
 

Charles Decker

Sophomore Member
Joined
Nov 16, 2006
Professional Status
Certified Residential Appraiser
State
Arizona
I see that it is zoned MH but one meter serving both units might conflict with this. I would call the client and let them know what you have discovered and how to proceed.
 

lmichels

Sophomore Member
Joined
Feb 15, 2007
Professional Status
Certified Residential Appraiser
State
Washington
You are stuck in the gray area. The only thing that would show whether it was a duplex or SFR + ADU is market data indicating which value would be higher (highest and best use). You may not have enough market data to make that call. If you want to finish the appraisal (which will not only cause headaches for the next 2 weeks, but probably for the next 5 years), you need a long scope of work discussion with the client and another long discussion on report type (I'd lean towards narrative - if you use a form, you have to write just as many pages in the addendum to cover USPAP issues). These properties often will go away if you quote a fee that is high enough to cover both your research time as well as the legal risks associated. No matter which way you decide to classify it, someone will decide you were wrong.
 

Charles Decker

Sophomore Member
Joined
Nov 16, 2006
Professional Status
Certified Residential Appraiser
State
Arizona
Shannon, I just did a search and only found 2 sales within 5 miles but they are new build two stories. I'm sure you already had these.

I agree with lmichels, charge a fee to cover your time/aggrevation for an assignment of this type.

Good Luck with this one. You may need a CR/CG to assist.
 

Mike Boyd

Elite Member
Joined
Jan 18, 2002
Professional Status
Retired Appraiser
State
California
I would call it a SFR with an attached granny unit. However, in some jurisdictions, a granny unit must be of a limited size in terms of GLA. In my market area it is 620 SF.
 

Edward OConor

Member
Joined
Apr 27, 2006
Professional Status
Certified Residential Appraiser
State
New York
What does the building department call it? Is it a sale or refi? In my area permitted "in-law or need units" must be reconverted back to original use on sales or change of use (eg. in-laws move out).
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
I assume the assignment is for a mortgage loan and the client wants the appraisal reported on one of the new Fannie Mae forms (1004 with ADU or 1025 small residential income property).

Refer to the certifications you must sign and read Certification #11. Will it be a true statement if you sign the certification?

Sometimes it's best to withdraw from an assignment.
(my bold)

Greg's advice is right-on. IMO, you have a complex assignment. In California, an appraiser with an appraiser license (non-certified) cannot complete a complex assignment without signed supervision.

The best business decisions I make are the ones when I pass on an assignment. Some of the worst have been when I thought about passing but took on the assignment anyway.

Good luck!
 

Donald Hill

Freshman Member
Joined
Jan 8, 2007
Professional Status
Licensed Appraiser
State
Ohio
It sounds like there are no separate utilities. Whats wrong with calling it a mother-in law unit. However, what is the highest and best use. Single family and/or multi-family.
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
SSR495,

Forum replys do NOT qualify for complying with USPAP in regards to becoming competent when not already competent. How do you begin this assignment? Well first you inform your client that you are not competent for the assignment and find out if the client wants to proceed anyway. Then next, you find out if this is for Fannie Mae, because Fannie does not allow the USPAP missive of "becoming" competent, if you are not Fannie says you cannot take the assignment... end of story.

Why do I post the above? Because, very simply, if an appraiser is incapable of defining what a subject property is..... there isn't a way that appraiser is competent for an assignment to appraise the real estate. Additionally, regarding quite a few similar posts to yours, it is my opinion whenever the forum gets such a post, and the poster does not mention a word about having personally gone to the planning/permit/assessors offices to research the subject,.... then they have not done so. If the poster has not personally done any research with those departments, the poster is not qualfied for the assignment in my opinion. All the poster is doing is trying to take shortcuts that should not be taken out of either lazyness or ignorance due to never having been taught how to research their subjects.

Webbed.
 
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