The parcel is 7.38 acres and has 2 homes on it (and a shop/outbuildings, etc). I know if the 2nd home is a studio or mother-in-law unit I can appraise it as an accessory unti, but what is the 2nd home is as big as the 1st (2000SF+/-). I can't appraise that can I, because the second home has to be on its own lot, am I right or wrong? Thank you

Anyone?

There is nothing wrong for the guest house to be bigger or smaller than what the appraiser considers to be the primary residence.
I would also consider things such as access to the house, visibility, quality to name a few- to determine which is what.
Once you determine the primary improvement, the other becomes the AU, studio, guest house, apartment,shop whatever.
If the second house is on its own lot, it' another appraisal for you!

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On John B's site click on FNMA

Search for "accessory"

The result is:
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This best definition of an accessory unit is from Appendix D of the HUD/FHA 4150.2 Handbook (2005).

The accessory unit is defined as a habitable living unit added to, created within, or detached from a single-family dwelling that provides the basic requirements for living, sleeping, eating, cooking, and sanitation.

Accessory Dwelling Units (ADUs) are commonly understood to be a separate additional living unit, including separate kitchen, sleeping, and bathroom facilities, attached or detached from the primary residential unit, on a single-family lot. ADUs are usually subordinate in size, location, and appearance to the primary unit and may or may not have separate means of ingress or egress.

Attached units, contained within a single-family home, known variously as "mother-in-law apartments," are the most common type of accessory dwelling unit. Accessory units usually involve the renovation of a garage, basement, or small addition to a single-family home.

FHA Criteria

"Accessory dwelling unit" means a subordinate dwelling unit may or may not be incorporated within, or detached from a single-family structure. Accessory units may not be subdivided or otherwise segregated in ownership from the primary residence structure.

Some accessory units may predate the adoption of local zoning ordinance and may therefore be classified as legal nonconforming units.

Utility Service Requirements

An accessory apartment must be connected to the utilities (except telephone, television and cable) of the dwelling unit and may not have separate services.

Updated 10/19/2005

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There you have it!!

Now you have to study the zoning and make a determination as to the Highest And Best Use of the property.
Hope you have some help nearby.

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I read and reread but have a question....can you include the gla of the "Mother in Law Suite" and "Primary Residence" as one?

Two, small homes on 7 acres. The site is underutilized. It's land value.

No, you cannot add the two SF together. Read FNMA about GLA.

Thanks Ale,

I will research it. The homeowner states that all 4 appraisals performed on his home have combined the gla of the mother in-law suite and primary residence.

Read ANSI also. Also, never just assume what the homeowner tells you is the truth. As John stated, it is an accessory unit. If you have been in this business for any length of time, you would know this information, so where is your mentor?

AA, you need to know the configuration of the ADU.
FNMA says nothing about GLA of an ADU, but gives a meek suggestion of what the appraiser can do.

ANSI has wording that is more specific in that the additional GLA may be included if connected to the main dwelling by a structure with equal finish.

Additionally, I think the market data will also show you how to treat this extra living space.

Remember to adequately describe how you did the analysis with the market data. Consistency is important. If you have comps that report ADU added to the GLA, you need to use it and explain how you made the comparison.

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Helpful and Appreciated Info from ALE:
Read ANSI also. Also, never just assume what the homeowner tells you is the truth. As John stated, it is an accessory unit.

UnHelpful, Rude and UnAppreciated from ALE:
If you have been in this business for any length of time, you would know this information, so where is your mentor?

Also, ALE, I'd rather ask this FORUM a question vs. explaining this situation to the BOARD 3 years from now. Even having a MENTOR isn't the solution to every Damn thing!

Add the accessory unit to the GLA and you will be explaining yourself to the board in the 3 years. Only once have I seen an accessory unit accessible from the main unit via a comparably finished hall and it was a guest suite over the detached garage sitting approx. 5 feet from the main house. Also, by asking a question such as this, it would make one wonder. Read the Competency Rule.

By questioning your competency could be helpful by suggesting that maybe something was missed in your appraisal education. Have you read the competency rule? I really don't care if I was rude because this is something you should know before you accepted this assignment.

What is wrong with appraising the subject with the 7 acres, and using the cost approach for the amenities and adding them to the report?

Ans. the underwriter will not like it. So what?

We have to appraise what we see not what the owners want us to see.

The H&BU may not be its current use but it is the interim H&BU until redevelopment is feasible.

This is not a hard appraisal problem; it just doesn't fit the template for a FNMA loan.
MEP

You guys are hilarious! Can someone please be original and say something other than 'Read the Competency Rule'

Please direct me to the section in my post where I stated that I actually ADDED the GLA of the Accessory unit.

Please direct me the section in my post where I WANTED to ADD the GLA of the Accessory unit.

Find it yet Carl & Ale??? Of course not, because I did not ADD it. I posted the question because I was unclear of the definition of the Accessory Unit.

When I know EVERYTHING about appraising like you guys obviously do, then I will stop posting 90-hr questions. Until then, look forward to as many questions as I have...Thanks Again!!

question, for AA
Are you continuing with the original post by GWEN or are you spawining a new thread with property of yours, different from GWEN?
Because in GWEN's case, the two units don't seem to be connected by anything at all.

I'm confused, maybe the other posters are also.

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HEre is what you posted "I read and reread but have a question....can you include the gla of the "Mother in Law Suite" and "Primary Residence" as one? " You doesn't ask about the definition of an accessory unit. You asked if the gla of the mil suite and the primary residence could be included as one. Reread your own post.

Let's stick to the topic.
Appraiser's run into this situation all the time. AFAIK, accessory units come in all forms and sized.
What to do in each case is really dependent on what you have.
Knowing how the ADU fits into the definiton of an ADU helps make your decision, does it not.

It is never, never. Sometimes, you have to add the GLA together. It depends.

So, if AA posts some more details about the property, we can see better, instead of slinging mud at each other in the dark.

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I didn't mean to confuse anyone GeeWilickers!....I just posted what I thought was a quick and easy yes or no question: Can gla be combined?

I NOW know the answer.
I NOW know the answer.
I NOW know the answer.
I NOW know the answer.

The ONLY reason I asked was because my homeowner is convinced that it can be done and stated that it HAD been done in the past. I did not take his word for it, but wanted to have a reference.

The folowing was the section that ORIGINALLY confused me from John's Post:

'Accessory units may not be subdivided or otherwise segregated in ownership from the primary residence structure.'

Thank you. I'm ok. I'm going to lick my POST Thrashing Wounds and move on. So is this what its like to receive an online spanking from really Old people?

By the way Michael, here is more info:

Subject is custom built 3000 sq feet Cape cod off Allatoona Lake. Has Detached Garage, with an apartment on top. The Mom lives there with 1 bed, 1 kitchen, 1 Living Room and Bath, appx 600 sq. ft. He says that he is taxed on the additional 600 sq. ft. and (per Zoning) he could legally rebuild it if it burned to the ground.

Well, it depends on what you mean by really old. I have been in the business since I was 21 and I am know 44. The lesson learned is never, ever believe what a homeowner tells you, even if he is an appraiser too.

AA
Thanks for the follow up.
I had a similar property in Alpharetta, accessory was finished about equal to main dwelling, but the fact that it was detached made my decision not to include in GLA simple. Had a doggone hard time finding comps!

Good Luck to ya!

I actually have appraised a similar one in that area during the past year. Mine was smaller, but high-end quality, knotty pine, custom-made stairs, etc.

We built an "accessory" to our house in Florida; it was 800 square feet with two large rooms and a handicapped bath in the middle. The larger room had a full, if small, kitchen. My mother had it built so that my dad and his nurse could stay with us six months of the year. Our community expressly forbade these detached structures, so our builder/designer made sure the roof of the casita (as it is called there)joined the roofline of the main house. It made the third leg of a u-shape around the pool. The building inspector and arch. review committee both agreed it was not detached, ditto the tax assessor. When we sold it it was added to the gla on the appraisal even though it had a separate power meter, hvac system, etc. It was finished exactly like the main house, including the same barrel tile roof. And there was no way to access the casita from the main house; you had to cross the lanai to get to it, but the rooflines were contiguous.

Just another example to muddy the waters . I guess the moral of this story is that every house, situation, and "accessory" is a little bit different!

Katrina, (spelled it right for once)
You bring up a good point.
But don't forget what is customary in the market; it will dictate how you analyze the sales.
One thing to note in your example is that the appraisal would not have met FNMA guidelines due to the separate meters! If you still have it, you might want to look it over, as a case study.

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That sale was in 1997; it would be interesting to look back at the FNMA rules from that year, too, and try to dig out the appraisal to see.

BTW, apropos of this subject, a caller to the Clark Howard show last week was asking about taxes owed on the house his wife's mother had quitclaim-ed (it's a verb now!) to them a few years before she died. They used it as a rental and were ready to sell. Clark advised them that they would have to pay taxes on the difference between the value of the house when it was deeded and the current sale price. The owner seemed confused, and Clark said they would have to call a "real estate agent" to "guess" what the value might have been at the time it was deeded to them. I tried to call and explain that the situation called for a retrospective appraisal but could not get through. There's a lot of misinformation out there, and he is supposed to be the Consumer Know-it-All. I sure hope the realtor they called knew what to tell them.

This is from CH's website:
"Drive by appraisals on the way out
Clark wants to warn you about “drive-by” or "fake" appraisals being done for home purchases these days. These are not legitimate appraisals because sometimes the appraiser may not even visit the property. Some just create a computer model of your home and pick a number. Others glance at the property as they're driving by at 35 miles per hour and come up with a number. Sometimes the numbers are way too high or way too low, which happened to Kevin, one of Clark’s producers. When he had two appraisals done on his home, there was a $68,000 difference between the two. Usually when you have a fake appraisal, you lose about 15 percent of the value of your home. As a result, you’re going to see a shift back to doing real appraisals, which is good news. But if you get an appraisal that is really low, go back to the lender and dispute it. Get information on other homes around you and find out the “comps” or comparable values. "

You'd think Clark Howard, or one of his many researchers, would take the time to actually find out what a drive-by appraisal entails. I guess it is too much trouble to find out the facts.

Clark Howard would make a terrible appraiser.

PS Michaelc--thanks for always taking the time to answer questions and for doing so in a way that doesn't make the questioner feel like a preschooler. There are quite a few of you who are truly courteous and helpful, and I know I am not the only one who appreciates all of you

AA could you post the four names of the appraisers who combined the GLA of two separate dwellings so that we can talk about this at our next meeting.


We always want quick and easy cases. This will take about four seconds to deal with!

thank you
actting like I am from the board so I can take these guys licenses for combining two separate dwellings to acheive a higher GLA and most like a very high value.

scumbags!

Actting....

I don't know their names. I didn't see the appraisals nor did I ask for copies. However, I did look his address up in Redlink and saw 2 appraisals with 2 TOTALLY different square foot and room count differences. One appears to have included the Mother In Law Suite and the other didn't.

First, thank you for all the helpful comments. More Info: It is zoned rural residential 2.50 acres minimum. You come to the first home, drive down the public gravel road a bit further and come to a second home (in between is a couple large outbuildings). The homes were built around the same time and are in the same condition. The owner has since told me that the land has been surveyed to be divided off (the second home will be divided off with 2.0+ acres of the original 7.0+ acres). However, the owner said the dividing request has not been submitted to the county office yet.
With that, it sounds as though this extra home will be appraised as an accessory unit (I didn't know the accessory unit could be the same size as the main house; live and learn). Now, if so far I am correct, about how to appraise this, how do I appraise it, if no comps have this type of set-up? Can you give me some examples on how you have/would done/do this in my situation? Thank you for the help.

GWEN, seems no one can answer your question because there really is not enough information provided for what seems to be a complex appraisal. You probably have more information about zoning and rebuildability, what the second house has been used for etc. Re-evaluation of your SOW with the lender is in order also, if there is one.

As far as comps, you need to make sure about treating the second home as an accessory unit or part of a duplex. Lender may have some ideas.

Too many unknowns from this end, just some thought going your way.

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It cannot be part of a duplex as it is two seperate buildings. When will the owner be filing the two surveys? Maybe 2 appraisals stating an extraordinary assumption.

PJ is correct. I should have put "2-unit" not duplex.
But the intended use/user is not known, so we are all stuck. The possibility of future subdivision IMO is not a criteria. We don't predict future events.

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