Selling Multi-Family Zoned as Single Family

Selling Multi-Family Zoned as Single Family

Member since 2020 · 2 posts · 0 votes

Hello! I'm here in Chicago and am planning to sell my 1906 home. It's zoned as a SFH 202, but has an in-law unit (above grade) and a partially finished attic that connects to the main floor. The main floor and in-law unit do not connect at all.

When we purchased the home, the appraiser classified the home as a multi-family house and we ran into a headache with the loan officer who was going to kick us over to multi-family pricing, which we couldn't afford. It was sorted out in the end, but I'm concerned that the next buyer is going to run into the same issue, as the house was under contract twice before we bought it.

Any suggestions on what I should do to prepare?

Thank you!

0Reply
25 views

Most Popular Reply

Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
5y

@Collins Van Liew a good RE attorney can look into this for you. A good lender could probably help to. @Joshua Jones is my lender and he has helped me sort through this kind of stuff before. 

See this reply in the discussion

4 Replies

Jump to latestLatest
  • Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    5y

    @Collins Van Liew a good RE attorney can look into this for you. A good lender could probably help to. @Joshua Jones is my lender and he has helped me sort through this kind of stuff before. 

  • Joshua JonesPro Member
    Member since 2020 · 70 posts · 32 votes
    5y

    @John Warren thank you. @Collins Van Liew the main issue you might have is what is called an accessory unit. If the home is zoned as single family, as you state, then you will need to make sure whoever buys it, is using a direct lender. So typically not your banks as they tend to have a lot of overlays. It will all come down to the appraiser and are they going to state it is an accessory unit or a full blown rental unit. That will determine a lot. If the buyers new lender states its a multi-unit, that is different rates for the buyer, down payment requirements and more.

  • Member since 2020 · 2 posts · 0 votes
    5y

    @Joshua Jones, @John Warren, Thank you guys for the direction here; I think this makes a lot of sense and definitely feels like the kind of thing that would have been nice to know 5 years ago when we bought this place. As we start talking to our realtor, I think having this info in hand will make that process much more straightforward!

    Thanks again for being willing to answer my question!!

    Collins

  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    5y

    How much would it cost to create access to the suite?

Join the conversationCreate a free account to reply, vote on answers and follow this thread.