I am in the process of putting together an owner builder project, in order to get the cash I am refinancing my current home. The appraiser has said he cannot count the guesthouse on my current property in the total square footage or for anything else??? He stated the UBC code limits the house to “single family dwelling” and the guesthouse would require the house to be re-zoned as a multi-family dwelling… The guesthouse ( constructed in 1978) was properly permitted and has no kitchen facilities. Can anyone tell me what the residence should be listed as per the UBC and how I might address this issue? I will have to pay in excess of $8,000 in PMI because the house appraised for $5,000 less than I needed. I pay insurance for $45,000 on the guesthouse (mother in law quarters) and I think it should be counted in the appraisal???
please help
Replies
AFAIK the UBC does not have anything to say on this matter.
It is strickly upto the local zoning laws. If it was permitted at the time that it was built then, unless someone at the city messed up, it is OK.
BTW, you might also look at a 80-10-10 loan (or 80-15-5). The 80's is a conventional loan without PMI. The first 10% is your equity, the 2nd is a 2nd mortgage. You will pay a little more interest for the 2nd, but much less than the PMI.
Don't know if this will work on a refi, but check it out.
Edited 10/7/2002 9:49:20 PM ET by Bill Hartmann
When I've had appraisals done, it's the property that has been appraised...not just that house.
The waterfront, the pool, the kid's playhouse, the shed, amount of acreage, the patios, etc, etc...each of those things increased the value of my property. As long as the secondary structures are permanent, they were considered to be part of the property, and thus they contributed to the overall value of my package.
Two phone calls:
Call the bank and ask for the loan officer's opinion. Let the loan officer know that the failure of the appraiser to include the guesthouse in the package has caused the loan to fall through...by "only" $5000.
Give your zoning office a call and ask them about it. They should be able to explain the legality of why the guest house should or should not have been included in your appraisal.
Get another appraiser! Your city is full of them. I would be cranking maad at this! Heck, I am!
IMO (and I've got some strong ones) this has nothing to do with building codes whatsoever.
IF
he really told you that, then he was either ignorant or lacking the integrity to tell you the truth and was making up stories.
It may be that since it has no kitchen, he cannot classify it as a dwelling unit for appraisal but if it is finished and liveable, he should, at the very least, be able to include the square footage as a part of your residence.
There are different classifications for different structures but every structure on the property has value (Well, I can think of a couple two or three that have negative value...) and that value needs to be included in the appraisal total. His purpose is to ascertain the fair market value of the property, should it be necessary for the bank to posses it and sell to make themselves whole in the event of a default on your part.
Excellence is its own reward!
Bode,
This is an area I have experience. If you are dealing with a bank consider a mortage broker. They are paid to hunt down the best deal and the best terms, to match your needs. They also usually know the most aggressive appraisers. Sometimes one is brought in from out of town to "help" the numbers out, they cost a little more but are usually worth it if you are trying for maximum financing. Make sure when shopping for a broker you talk fees first. I pay about $900 a deal. Some I know charge 3k. Big difference. DanT