New Contruction-only 2 Bedrooms?

[Kirbywoo]

I am attempting to appraise a property that is under construction in a newly developing subdivision of tract homes. This is a pre sale and the owners have changed the plan around so there are only 2 bedrooms on first floor (from original 3) and a bonus room with full bath, walk in closet over garage. It has 2400 SF. I have searched a large radius around the subject within the general market area for similar sales with 2 bedrooms and there is zero. In my view the presence of only 2 'real' bedrooms spells functional obsolescence and an adjustment is warranted as it would limit the pool of buyers for a resale. One could argue that the bonus room could be used as a bedroom but then property would have no bonus room. Need ideas on how to handle this and since there is no market reaction to extract, how do I support an adjustment? All responses appreciated.

 

[BRCJR]

If you access the "bonus" room from the interior and it is finished to the same quality as the rest of the dwelling I think you have a three bedroom dwelling (assuming size and ceiling height are reasonable).

Do all other properties have a bonus room?

 

[Tim The Enchanter]

a bonus room with full bath, walk in closet over garage

Sounds a lot like a bedroom.

 

[George Hatch]

What effect on the contract price is this modification having? If they're not throwing in a big discount for this "reduced" bedroom area then that may mean the seller doesn't consider it a reduction in their costs or profit margins.

If they've combined 2 smaller bedrooms to comprise a larger suite then it may be that all it would take to convert to an additional bedroom would be adding the partition back in - which is something that would have a knowable cost, which in turn might function as the starting point for a cost-to-cure discount.

Something along the lines of "The cost to convert Bd#1 back into 2 smaller bedrooms is estimated at $2,000, which after additional discounting for profit incentive amounts to a total adjustment factor of $4k when compared to the 3bd units in the same project."

 

[Kirbywoo]

Thanks for the responses. I think I am safe calling it a 3 bedroom. The buyers converted the main floor from 3 bedrooms to 2 master suites with large WICs
and added a bath to bonus to cover themselves for resale. Thanks Again!

 

[Michigan CG]

I have had the two bedroom vs. three bedroom argument with many people in my market and no one can support their argument that there is a difference in value. I once ran a spreadsheet of 100+ properties and the results were no adjustment required. Two of the people I had that discussion said their mentor taught them to adjust but never gave them a reason.

 

[BRCJR]

I have had the two bedroom vs. three bedroom argument with many people in my market and no one can support their argument that there is a difference in value. I once ran a spreadsheet of 100+ properties and the results were no adjustment required. Two of the people I had that discussion said their mentor taught them to adjust but never gave them a reason.

And that is a prime example of the imperfect real estate market that we are supposed to make perfect adjustments in....

 

[Webbed Feet]

Thanks for the responses. I think I am safe calling it a 3 bedroom. The buyers converted the main floor from 3 bedrooms to 2 master suites with large WICs
and added a bath to bonus to cover themselves for resale. Thanks Again!

Perhaps two bedroom suites on the main floor is superior to the alternative in the market place. 2,400 square feet is an awkward size once builders start attempting to partition too many rooms out of it. So what is worth more (or less, or the same) to the market? Two very nice bedroom suites or just one with two small bedrooms? I believe the industry gets a bit carried away attempting to appraise by the bedroom instead of taking an overall view of the functionality of the floor plan versus the size it is being crammed into.

 

[Deleted member 130081]

I am attempting to appraise a property that is under construction in a newly developing subdivision of tract homes. This is a pre sale and the owners have changed the plan around so there are only 2 bedrooms on first floor (from original 3) and a bonus room with full bath, walk in closet over garage. It has 2400 SF. I have searched a large radius around the subject within the general market area for similar sales with 2 bedrooms and there is zero. In my view the presence of only 2 'real' bedrooms spells functional obsolescence and an adjustment is warranted as it would limit the pool of buyers for a resale. One could argue that the bonus room could be used as a bedroom but then property would have no bonus room. Need ideas on how to handle this and since there is no market reaction to extract, how do I support an adjustment? All responses appreciated.

Yet again, one more reason appraisers need to organize. The only problem with appraisal is lending.

 

[residentialguy]

So, you think most people need 3 bedrooms????
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