Perhaps one of the most challenging situations a residential appraiser can encounter in their daily practice is a subject property that has an accessory dwelling unit (ADU). Whether it is called a guesthouse, an in-law’s quarters, a casita, or something else, there are many questions that need to be answered in order to figure out how best to consider it in an appraisal. To help you navigate those questions, we’ve put together a list of useful resources for appraising accessory dwelling units.
The presence of an additional living unit may complicate the appraisal process by making it difficult to know how to classify the subject property. How do you know whether you’re dealing with an accessory dwelling unit (ADU) or a second unit? This blog post reviews the different types of ADUs and provides guidance to help you distinguish a single-family property with an ADU vs. a two-family property.
Recorded webinar: Appraising Accessory Dwelling Units Simplified (exclusive to members)
This one-hour webinar recording answers the most common questions that appraisers ask regarding accessory dwelling units, including: What exactly is an ADU? How do you value an ADU? What do you do if the ADU is an illegal unit? Webinar presenter Robert McClelland defines ADUs and explains how to apply a Highest and Best Use analysis in order to determine whether your unit qualifies as an ADU or not. He also explains the process for finding other properties that also have ADUs, even in a market with limited similar comparables, and even if your subject’s ADU is not legally permitted.
This top-rated CE course from McKissock Learning is developed for residential appraisers who want to use appropriate methodologies to develop and support adjustments in the sales comparison approach to value. It includes a chapter focused specifically on “Outbuildings, Site Improvements, ADUs, and View Adjustments.” In addition, you’ll learn methodologies to develop and support gross living area (GLA) adjustments; bedroom and bathroom adjustments; builder upgrades, sales concessions, and basement finish adjustments; as well as market conditions adjustments.
Training video: Appraising Accessory Dwelling Units (ADUs) for Fannie Mae
This free training video is available on Fannie Mae’s website via the Learning Center for Appraisers & Property Underwriters. Because Fannie Mae is the largest purchaser of loans in the secondary market, they have created, and continually update, a very comprehensive policy regarding ADUs. Policies of Freddie Mac, HUD/FHA and VA generally ‘overlay’ the Fannie Mae policy; however, they may use slightly different language and may have additional requirements and guidelines. Watch this free online video to learn all about appraising accessory dwelling units for Fannie Mae.
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