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Multi-family Zoning/1 Unit

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Metropolis

Junior Member
Joined
Feb 2, 2009
Professional Status
Certified Residential Appraiser
State
Florida
I'm appraising a single family residence that has a zoning and a site that would permit a second unit. The seller of course thinks this nearly doubles his value. How would you address this in the appraisal to be clear but not inspire months of "hate" phone calls? It's being performed as-is and the contribution of a second unit varies by how big you'd build it. Seller insists that it could accommodate up to 1400 sq/ft, but that would be an overimprovement.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Client Type? Assignment Type? Intended User(s) and Use(s)?
 
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jay trotta

Elite Member
Joined
Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
Is there an Existing Permit for the second Unit ??

Have Plans been submitted ??

"As Is" as of the effective date of Observation ?

Does he have now or in the past, obtained a submarine race watching pass ????
 

Metropolis

Junior Member
Joined
Feb 2, 2009
Professional Status
Certified Residential Appraiser
State
Florida
The client is the homeowner who can't seem to sell the property at 100k over FMV. He is an architect and has drawn up plans himself but has never pursued it. His neighbor used his plans, built the garage and apartment and says he gets $1700 for the garage apartment ( I call BS).

The effective date is current.

He doesn't prefer submarining. He's a UFO guy.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
The client is the homeowner who can't seem to sell the property at 100k over FMV. He is an architect and has drawn up plans himself but has never pursued it. His neighbor used his plans, built the garage and apartment and says he gets $1700 for the garage apartment ( I call BS).

The effective date is current.

He doesn't prefer submarining. He's a UFO guy.
Is it listed for sale (aka he can't sell it at 100k ovr FMV)

Everyone has their threshold, imo if you are starting out with an adversarial, aggressive client who you anticipate months of hate phone calls and he is trying to tell you what it is worth, might be a good idea to decline the assignment. Unless it is such a great fee, may not be worth it... a homeowner as client is a one off client, not like they will have repeat future work for you.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I'm appraising a single family residence that has a zoning and a site that would permit a second unit. The seller of course thinks this nearly doubles his value. How would you address this in the appraisal to be clear but not inspire months of "hate" phone calls? It's being performed as-is and the contribution of a second unit varies by how big you'd build it. Seller insists that it could accommodate up to 1400 sq/ft, but that would be an overimprovement.

Subject is being appraised as is and at present, the second unit ( ADU ) does not exist, correct? All he has is zoning permission and a site that could accommodate it, but a buyer would have to spend the money and build it...so imo it adds some possible value but not that much because what guarantee is out there a buyer wants to do this, and even if they want to do it, they have to pay to construct it. It's a potential, and some plans (if a buyer wants to use his plans, they may prefer another design)

I'd speak to some local area RE agents and get their perspective and feedback on it. Are a lot of buyers eager to built a second unit, or only mild interest? What more might they pay to have potential to do it? Do other sites/homes sold in area had the zonign and potential to build out/add second units? My advice still holds, this guy sounds like a jerk and certain people are just not worth dealing with.
 

Metropolis

Junior Member
Joined
Feb 2, 2009
Professional Status
Certified Residential Appraiser
State
Florida
Yeah-trust me, I didn't want to take it. He's a friend's dad. Ive never met the guy but the friend is golden. I'm actually going to stop appraising for a while bc I'm so over it. I'll do review work, but that's it. For comps, I grabbed 5 sales with the same zoning and site sizes and 2 that have different zoning but grandfathered guest houses. Plus two listings.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
sounds like you have it covered! (y)
 

NachoPerito

Senior Member
Joined
Jul 25, 2012
Professional Status
Certified General Appraiser
State
Washington
Find a couple of SFR sales that allow an additional unit on the site. Call the broker and ask them if it sold for a premium because of the potential 2nd unit and see if the buyer's were planning on actually building a 2nd unit.
 
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