Septic And # Of Bedrooms

[Cres Ann Hoyt]

Sorry if this has been answered before.

If the subject has a 3 bedroom septic (stated in the listing) and it is a 4 bedroom in an appraiser's eyes, do we appraise it as a four bedroom house?

 

[Marcia Langley]

Cres,

Do agents in your area usually use that terminology (3 bedroom septic) in their listings? I only ask because I have never seen that terminology in my market's listings.

I would assume the comment is a nice way of saying that the septic tank is undersized for market expectations.

I would think that you should describe the room count as you normally would but then deal with the insufficiant septic tank.

But, the first step is to be sure what the agent meant by that remark. Since it is a purchase, you should get more information from the seller's disclosure statement. Also, ask the seller.

 

[hastalavista]

Cres-

Sometimes, a septic tank's capacity is rated is by bedroom count.

In my area (California), this is of significant importance. You need to make sure that the septic tank rating is sufficient for the number of bedrooms you give value to in your report. Consequences could be significant (for you) if you value the subject as a 4-bedroom house, but septic rating is only for 3 or less bedrooms.

If it is different in New Jersey, please post so we know.

Thanks!

 

[Marcia Langley]

Denis,

So, you are saying that if the tank is rated for three bedrooms and the house has more then the appraisal should only show the value for a three bedroom house.

OK, I'll buy that.

But wouldn't one have to address the discrepancy as a defficiency in the report?

 

[hastalavista]

Marcia-

Yep- septic rated for 3-bedrooms, I’ll only give value for 3-bedrooms.
My logic is that since the septic system isn’t rated for more than 3-br, the “4th br” isn’t functionally supported. However, I’ve never had to go that far to defend the logic of the position.

I wouldn’t call it a “deficiency” (unless 3br's are considered a functional obsolscence in that neighborhood). I'd call it a 3br + den (or whatever). The fact is that the system is rated to the approved improvement. So, if the is a idscrepancy, it is typically because the improvement was added onto or reconfigured; not because a deficient capacity septic system was installed (different way to look at it). If done with permits, the septic system capacity is addressed prior to the sign-off. If no permits are obtained, your guess is as good as mine as to what was actually done/how it was done.

In my area where there are septic tanks, in cases where bedroom additions are being considered, the project must be signed-off by an inspector to insure that the septic system is sufficient for the bedroom count- otherwise, the addition cannot be considered a bedroom per planning.

The danger an appraiser falls into is appraising the property as a 4br home. Let's say it is a purchase, and the deal goes through. Then, when the new homeowner has the septic system serviced and finds out that the system is only rated for 3-br, he may turn around and sue the appraiser because the house was valued as a 4-br home, when it only was a functionally supported 3-br home. I believe a case like this happened in the Bodega Bay/Sebastapol area (norcal). The suit was for around $40k-$60k.

One of the Boyds may see this and have another answer; they deal with this on a routine basis, and I don’t.

 

[Otis Key]

To add in on Denis' post, which is correct, I might also add that states and counties are getting more strict and the ordinances are getting tighter on a daily basis.

Just took a Q & A session here and we've found out now that each septic has to be licensed - existing or new. As such, I'm asking the seller or HO if they have a license for the "liquid waste system" in my "busy sheet". If they can't produce it, then I'm CB4 for the appraisal as I'm not going to pay $10k to $29k for a septic. They are rated for bedroom count as it relates to occupancy levels, typically.

I'd strongly suggest everyone check their county and state ordinances on septic systems.

Edit for a question to Cres

Why do you consider it a 4 bedroom? If it is a 4 bedroom, then was there a permit for that 4th BR?

 

[Mr Rex]

Use 3 BR comps if it only perks for 3 BR. Its not a deficiency unless all the comparable properties are 4BR etc. Done quite frequently here around the lakes. Most are resort homes and you may observe beds in many rooms, since the whole extended family comes on weekends and holidays. On the other hand, if it is used as a primary residence, its value would be dependant on the permitted use. The "stuff"s gotta go somewhere you know.

 

[Marcia Langley]

Thanks to all of you guys for the info. I've got some investigating to do.

 

[Mr Rex]

If its listed on MLS, somethings up, so its important. Beware. Currently working on 2 land appraisals that have existing 2 BR septic systems. May be eligible for 3 BR permits. Site value is +/-$250k for 2 BR to +/- $350k for the extra BR.

 

[Otis Key]

Originally posted by Michael Radford@Jan 19 2006, 06:59 PM
Use 3 BR comps if it only perks for 3 BR. Its not a deficiency unless all the comparable properties are 4BR etc. Done quite frequently here around the lakes. Most are resort homes and you may observe beds in many rooms, since the whole extended family comes on weekends and holidays. On the other hand, if it is used as a primary residence, its value would be dependant on the permitted use. The "stuff"s gotta go somewhere you know.

Michael - I'm not challenging you but our just enact ordinaces for the state are specific - we're a high desert with limited water and so it can, and in this case is, be specific. In fact, the state has stated that if the system is not rated for the number of bedrooms for the house, then it MUST be upgraded. Each and every state, county, town and/or city is different. I'm not doing a perk test on a septic system. There are EXPERTS that do that. I appraise houses so I'll do my job and someone else can do their job.

NO offense