Single Family or Commercial Office?

[JULIEWEBB]

Have an order for a property that is currently being used as a law office. The owner has a conditional use permit from the City that allows for the professional office. This is an older area of town, and there are several older homes that are being used as professional law offices in the area. There are also single family dwellings in the area. The lender wants the appraisal for a purchase. I asked the seller if the buyers are going to use the dwelling as a single family residence or if they are going to use it for a professional office and he said they were attorneys like him and are planning on using it as a professional office.

I'm not sure how to handle this. I'm not a General Appraiser and need to know how to approach this from a highest and best use perspective. I'm prepared to turn the assingment down, based on lack of experience, but I thought I'd better check on the forum if there is a way this can be appraised as a single family dwelling?

 

[DB]

Sounds like HBU, zoning and surrounding uses are all leaning in the same direction you are, to me at least ...

 

[MattCaffrey]

I had a similar assignment. Best bet is to go to the town hall and see if it can transfer to a new owner and remain the same use without jumping thru all sorts of hoops.

If it's an involved process to transfer the same use to a new owner, explain it then go with appraising it's legal use, from the town's point of view. ie- the new owner can only use it as a Single Family until they gain a variance for use as a professional office.

(It'll be good to include a comparable of the same set up, even if the sale is farther back in time. Just to show that these type of properties will sell.)

 

[hastalavista]

What's worth more: The law office configuration or the SFR configuration?

 

[Colorado Guy]

I just had a similar issue in a small town. SFR was being used as an insurance office. Only the interior doors were removed, otherwise the home was typical. I appraised as an SFR because as these were the most prevalent comparables in the subjects immediate area.

Another issue I looked at. If the lender had to sell this property, what would it most likely sell as - a business or a SFR - in my case an SFR without doubt.

 

[Couch Potato]

When I encounter such questionable properties, I go ahead and pass them on to a Certified General Appraiser. Since I could only do the assignment if it works out a particular way, I view that as a conflict of interest that I would rather confront.

 

[JULIEWEBB]

What's worth more: The law office configuration or the SFR configuration?

I don't know how to value offices, so how do I find out which values higher?

 

[hastalavista]

I don't know how to value offices, so how do I find out which values higher?

See Greg M's post #6.

 

[xmrdfghap]

I don't know how to value offices, so how do I find out which values higher?

Pass it to a cert gen or get one to show you how to do it. You have to decide which it is. and if it is currently a law office and it is going to continue to be a law office, there isn't a city around that will take on two firms of lawyers to make them go back to the old zoning. At this point the only question is going to be whether it's HBU is as a law office, an accounting firm, or an architects office.

 

[hastalavista]

At this point the only question is going to be whether it's HBU is as a law office, an accounting firm, or an architects office.

Or, bail bondsman.:new_smile-l: