Single family, 2 kitchens

[KJR2008]

From all indications there are no deed restrictions that indicate the 2nd kitchen is of a illegal use. This is not typical of homes in the area and that a functional obsolescence adjustment is warranted. Not finding and similar 2 kitchen sales to extract a reasonable FO adjustment. In an absence of similar sales, would a cost to remove the 2nd kitchen be reasonable to apply as a FO adjustment?

 

[Mike Kennedy]

Governing Municipality?

 

[RSW]

The lender is going to be more concerned with if the zoning allows for a 2nd kitchen, if it were built up to code, and if permits were obtained for the construction.

 

[woodsytf]

around here we say 'they are not un-common' and generally these 'mother-in-law' kitchens/suites are found in basements or occasionally a second floor when a family with an older parent/uncle/aunt etc. moves in and the florplan could be readily modified to include a kitchenette. these second kitchens rarely have greater-or-equal utility when compared to the primary kitchen and there is never a 'comp' with 2 kitchens when we do these reports/inspections. to pass through BOA or wells fargo type underwriting describe as a 'kitchenette'. around here it does not become functional obsolesence, or a negative marketing factor as long as the flow/floorplan is not all goofed up for it. contributory value is almost zero and no extractable market support has ever been found. we adjust them as finished space and comment that the value in use is personal and that marketing should not be affected.

if the 2nd kitchen has issues or floorplan wonky-ness then... oy... you got some 'splaining to do

 

[J Grant]

Imo, don't apply a cost to remove second kitchen as an adjustment. Applying cost to cure as an adjustment is bad methodlogy, because it does not result in an "as is" value, it would result in an "as repaired" value, and most likely your client wants an as is appraisal.

You can provide a cost to cure estimate on addendum, don't mix it into the sales grid as an adjustment.

Describe and photograph exactly what is there. Don't play games and call it a kitchenette or finsihed space or the like. If it is a second kitchen, it is a second kitchen.

It is the lender's call if they want to lend on a home with two kitchens, or not.
If there are no permits for it, then state that as well. If you can find out local zoning code if it is legally permissable or not, then put that information in. Usually a deed itself will not have a restriction against a second kitchen.

Re, in the sales grids, if you can't find comps with non permitted kitchens, imo, it is best to show no value for it. If it is not permitted, it has no resale value because typically in a purchase appraisal the lender would want it taken out. It might have personal value to those using it, but proving resale value is different.

 

[Mike Garrett RAA]

I would think it would be an over-improvement rather than functional obsolescence. Not uncommon IN MY MARKET but also not typical.

 

[residentialguy]

Is the kitchen in the basement? That is not uncommon around here. It's great for parties, esp walkouts...don't have people running upstairs all the time. It's also nice for longer term guests

 

[Sid Holderly]

Kitchen

I agree with #4. There are many waterfront properties with 2nd kitchens and quite a few in newer walk out basements in other locations. There are no local zoning or local codes dealing with such. They range in amenities from a glorified wet bar to full blown high end kitchens. In basements they are part of the finished space with no special adjustment. On second or upper levels they might be adjusted as an extra fixture (minimal like a sink in a laundry room).

Some older 2 story homes that were once 2 unit houses and now are single family homes, either by conversion or to comply with zoning also have 2 kitchens. In this case they may cause functional depreciation since they take out a possible bedroom. Still there is little to adjust.

 

[J Grant]

Lenders seem to have thier own bias, or "rule" against lending on homes with full second kitchens, even when zoning per post above does not expressly prohibit them.

The decision whether to lend is the lender's problem. Our job is to report what is there..describe the kitchen, note where it is, photograph it. Whether or not it recieves value is addressed on the SCA.

Whether or not the lender wants kitchen removed, or lends on the home "as is", is their call.

 

[KJR2008]

Thanks for all the great responses,

Imo, don't apply a cost to remove second kitchen as an adjustment. Applying cost to cure as an adjustment is bad methodlogy, because it does not result in an "as is" value, it would result in an "as repaired" value, and most likely your client wants an as is appraisal.

You can provide a cost to cure estimate on addendum, don't mix it into the sales grid as an adjustment.

Describe and photograph exactly what is there. Don't play games and call it a kitchenette or finsihed space or the like. If it is a second kitchen, it is a second kitchen.

It is the lender's call if they want to lend on a home with two kitchens, or not.
If there are no permits for it, then state that as well. If you can find out local zoning code if it is legally permissable or not, then put that information in. Usually a deed itself will not have a restriction against a second kitchen.

Re, in the sales grids, if you can't find comps with non permitted kitchens, imo, it is best to show no value for it. If it is not permitted, it has no resale value because typically in a purchase appraisal the lender would want it taken out. It might have personal value to those using it, but proving resale value is different.

The 2nd kitchen is a permitted use, however the 2nd kitchen is a classic case of non conforming for the area. That was my reasoning of thinking that an adjustment for Functional OB was warranted. However with no 2 kitchen sales available to extract an appropriate market adjustment, my thinking is to apply a FO adjustment based on an estimate cost to remove the 2nd kitchen area. That may still be flawed methodology, thoughts?