Opinions For An Adu?

[robertwells]

Hi Guys/Gals, You folks are always very helpful as a sounding board, and wanted to see if anyone was willing to provide their opinion here(?)...I am working on a refinance appraisal of a single family home that has a detached studio unit with kitchen and bath, that appears to have been an original garage at some point, however, only a garage is recognized in public records. This apparent conversion was done by a prior owner, but has been this way for at least about 19 years. I have no permit data for this feature and again, it is not recognized in public records (also, only one meter on property). My question goes to possible value attributed to this feature. I have only one sale with a detached unit (that is also not recognized in public records), and seems to indicate some value for its feature, but there are numerous other adjustments needed, so not a really solid indicator. I assume this was not a permitted conversion, and it is also noted it extends almost to the rear property line (a cursory review of zoning ordinance indicates accessory dwelling units allowed, but with a minimum lot size larger than the subject's parcel). The bath is funky with two steep steps to get up to the tub/shower from vanity/toilet, and the unit does not have a permanently installed heat source, however, apart from these factors, it has a nice finish. I reached out to get some input/guidance from lender/client, but all I was offered was, "If appraiser can address it as an accessory unit/storage as long as it only has 1 meter, then it should not be a problem".

Thoughts on valuation of this feature, that is likely not legal? Of course with the garage converted, it was not assigned value for having a garage, and comps with one car garages were adjusted downward...Thanks! Bob

 

[bnmappraisal]

Definitely check with zoning. What you state

and it is also noted it extends almost to the rear property line (a cursory review of zoning ordinance indicates accessory dwelling units allowed, but with a minimum lot size larger than the subject's parcel)

this may be "legal non conforming" (or illegal) but only the local zoning office will be able to tell you

I have only one sale with a detached unit (that is also not recognized in public records), and seems to indicate some value for its feature, but there are numerous other adjustments needed, so not a really solid indicator.

Did you expand your search criteria? distance and time (I'd go back in time upwards of 18 months for lending, you can use anything over 12 months old as comp 4+ - distance I would find similar neighborhoods; don't worry about the "1 mile guideline" BS)

 

[bnmappraisal]

I have ADU's in my market. They definitely take more time to complete, even with "good" comps due to the extra time verifying all the info. Here, many agents will market them with the total living area (i.e. 2,000 sf when it really is a 1,500 sf main dwelling with 500 sf ADU)

Be prepared to make many phone calls, dig through maybe dozens of MLS sales and Public Records

 

[gregb]

CA state ADU law may impact legal nonconforming status of an ADU.

http://www.hcd.ca.gov/policy-research/AccessoryDwellingUnits.shtml

 

[RCA]

Hi Guys/Gals, You folks are always very helpful as a sounding board, and wanted to see if anyone was willing to provide their opinion here(?)...I am working on a refinance appraisal of a single family home that has a detached studio unit with kitchen and bath, that appears to have been an original garage at some point, however, only a garage is recognized in public records. This apparent conversion was done by a prior owner, but has been this way for at least about 19 years. I have no permit data for this feature and again, it is not recognized in public records (also, only one meter on property). My question goes to possible value attributed to this feature. I have only one sale with a detached unit (that is also not recognized in public records), and seems to indicate some value for its feature, but there are numerous other adjustments needed, so not a really solid indicator. I assume this was not a permitted conversion, and it is also noted it extends almost to the rear property line (a cursory review of zoning ordinance indicates accessory dwelling units allowed, but with a minimum lot size larger than the subject's parcel). The bath is funky with two steep steps to get up to the tub/shower from vanity/toilet, and the unit does not have a permanently installed heat source, however, apart from these factors, it has a nice finish. I reached out to get some input/guidance from lender/client, but all I was offered was, "If appraiser can address it as an accessory unit/storage as long as it only has 1 meter, then it should not be a problem".

Thoughts on valuation of this feature, that is likely not legal? Of course with the garage converted, it was not assigned value for having a garage, and comps with one car garages were adjusted downward...Thanks! Bob

Typically in California, the local planning/building department can make you remove it or make it legal. What would it cost to make it legal? What would it cost to remove it? http://www.walnut-creek.org/home/showdocument?id=2726.

 

[Tom D]

makes a great space for your older kids, or parents, although i have seen these mostly over the detached garage. if you cannot find similar, then just do as a finished rec area. like a detached sunroom, or finished enclosed patio. if you are nervous, then mention it, and give it no value because 'there is insufficient market data to determine what effect, if any, this situation has. Due to the lack of market evidence to support differences in exterior amenities (paired sales), no adjustment will be utilized for differences in amenities. However, the appraiser will consider the lack of the adjustment when reconciling an opinion of value.'

personally, i would love it as an office or work shop, or for my daughter, or for the wife's doll collection. can the owner rent it? i don't know the area rental rules, but it has more functional uses other than a rental space.

 

[Digger88]

$10,000. move on.

 

[JessEd]

Typically in California, the local planning/building department can make you remove it or make it legal. What would it cost to make it legal? What would it cost to remove it? http://www.walnut-creek.org/home/showdocument?id=2726.

Agreed,

It may also be Grandfathered due to when the conversion was completed. But, I definitely would report cost to cure if it is not "Legal" and cost to cure may offset a minimal value, maybe more if a garage door would need to be cut back into the structure...

 

[Terrel L. Shields]

Thoughts on valuation of this feature, that is likely not legal?

You need to see that it is truly illegal before assuming same. If 19 years plus, it isn't likely on line, so explain how and what you did otherwise and assume something... I've never seen a city require one removed. I did see a town doze an old house a builder was remodeling while he recouped from a heart attack. He sued, the city lost. They haven't tried that since.

Your Comp appears to indicate a contributory value. Extract it, find more comps, extract those...hopefully either as an unit or per SF, you have a tight range, make the adjustment. AND, as support, estimate its RCN, estimate effective age, calculate a deprecated cost (cost related method) as further support of the adjustment.

$10,000. move on.

Supported how? DPTROOHH? Digger pulled the rabbit out of his hat?

 

[ucbruin]

$10,000. move on.

Suported how? DPTROOHH? Digger pulled the rabbit out of his hat?

I admire the decisiveness!!!!