Does Adding New Bedrooms To Existing SQ FT Raise Appraisal Value?

[Garrett Bowser]

Do appraisers make adjustments for converting existing square footage into additional bedrooms?

We're converting a storage closet into a 3/4 bathroom and turning a sunroom and nook into 2 additional bedrooms.

The appraiser says the extra bathroom will add value to the appraisal but he won't add value for the 2 new bedrooms because he compares houses of equal square footage and not by the number of bedrooms.

Is this method the industry standard or do appraisers in other cities make adjustments for additional bedrooms?

[Benjamin Aaker]

Agree with @Malcomb Stapel. In my area, the appraiser will compare like-properties based on bedrooms/bathrooms before looking at square footage. I can also see where the value of adding a totally new bedroom with the square footage would be more than taking area from another room and converting it into a bedroom.

The key is in the comparables in the hyper-local area. If your as-rehabbed property has a similar number of beds/baths, your move should increase the value. If it puts you above the market - say you now have 5 bedrooms when other houses have 3, the added value won't be as much. In that case, the appraiser will fall back on square footage. That might have been what happened. You'll need to find comps (again, hyper-local) that show you are right in your valuation and politely present them to your appraiser and banker.