Refinance appraisal question when there aren't any exact comps?

Question

I'm in the process of doing a FULL rehab on two houses that are on one parcel. The houses are not connected at all, they're not even really that close to one another. I've checked pretty thoroughly and I can't find any comps where there are also two houses on one lot in the area. I can find plenty of SFR's and duplexes but nothing quite like mine. My question is will the appraisal come back as a comp to a duplex or will it come back as a comp to two separate nearby SFR's?

I'm obviously hoping it will be the two SFR's! The SFR directly across the street from mine, which is smaller than both of my two, just sold for a higher price than I paid for both of mine.

I'm trying to plan what to expect when I do the refi next year...

I'm obviously hoping it will be the two SFR's! The SFR directly across the street from mine, which is smaller than both of my two, just sold for a higher price than I paid for both of mine.

I'm trying to plan what to expect when I do the refi next year...

Jeff B. · Answer

Subdividing is a great tax strategy. Sell each in different years to reduce/defer taxes!!

Charlie Brown · Answer

I wouldn't think that it would be considered two SFR unless it was two separate lots. Have you looked into subdividing the lot with the city? If you sell without subdividing then it will be appraised as 1 SFR primary residence with an ADU (additional dwelling unit).

Did you buy the lot as is? Or did you add the unit? Is it permitted?

That's a tough one for sure.

Nicholas Lohr · Answer

Thanks for the responses. Yeah I bought the lot with the 2 houses as is.  I've found out that they will appraised as a duplex unless I can subdivide the lot. I'm going to talk to the city planning department for sure!