Quote from @Caleb Lee:
Hi @David Maldonado, just stumbling across your update now - I'm in a similar situation where I've finished my ADU in Los Angeles and now I'm looking into the post-build appraisal value to determine whether to hold or sell.
Do you have the contact information for the lender that did the appraisal who referred to SB9 as a gamechanger? I'm curious whether the bill now means that they can use duplexes as comps for all California properties, rather than just some cities/regions. Feel free to DM me directly as well. Thank you!
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Hey Caleb,
I am a local appraiser, amongst other things, and have some insight into this issue. This is a big topic amongst appraisers these days, and is still kind of an unknown black box. How it is handled depends on the appraiser that gets the assignment, not the Lender. The Lender cannot have any influence on choosing the appraiser, so it is a crapshoot.
For similar assignments, I have been able to find some recent sale comps with ADU's. Or, I also look for R1 zoned properties with guest houses, since they can typically be readily converted into an ADU, or currently have a similar utility (use). I try and steer away from duplex or triplex comps, that might have zoning other than R1. There may be some differences with those properties with different zoning, so I prefer to find comps with similar zoning, if possible.
Now, it is not always possible to find other ADU properties or other R1 zoned duplexes. So, i'd say in that case it may be reasonable to comp an SFR + ADU with a duplex, but then we should take into account any potential appeal differences between those properties. Usually, the higher density properties are in different neighborhoods, and may have a different appeal.
Also, SB9 allows 2 dwellings on an sfr zoned property and an ADU (3rd unit). But, my understanding is that some municipalities will not allow all 3 units to be rented if the property is not owner-occupied. Therefore, a triplex on a multi-zoned lot may have different legal rights (all 3 units can be rented regardless of owner occupancy). So, that might cause a different market appeal. This is why I try and stay with similar zoning for my comps.
But, honestly, my guess is that most appraisers will just pick those properties that seem like good comps, irrespective of their zoning. That may be good or bad. Some areas I work in have higher values for sfr's than duplexes, and therefore, the sfr + ADU would be more valuable than a duplex.
So, bottom line is it may be a roll of the dice. To address your last comment - the bill does not allow or disallow us (appraisers) to do anything, for that matter, neither do Lenders or anyone else. it is always up to our discretion to do what we see fit and appropriate, in order to do the assignment.
That said, I did find a couple of comps which give me a general idea of value of adu properties, in your area. Feel free to DM me, if you want to discuss it further.
