Sacramento Appraisal Blog | Real Estate Appraiser

Real estate appraisals for divorce, estate settlement, loans, property tax appeal, pre-listing and more. We cover Sacramento, Placer and Yolo County. We're professional, courteous and timely.

Tax Records

Why did the appraiser say it was only two bedrooms? It should be three.

By 26 Comments

The real estate agent marketed the property as three bedrooms, Tax Records said it was three, but then the appraiser said it was only two. What the heck? Let me share with you a situation I encountered recently where an appraiser (me) ended up removing one of the “bedrooms” from the room count because of a functional issue. Let’s look more closely below. I’d love to hear your take in the comments.

The layout of the house according to the agent:

2-or-3-bedroom-sacramento-appraisal-blog-part-1

It’s not normal to have a layout like this, right? Imagine getting up to go to the bathroom at night and walking through someone’s room to get there. The middle room really wouldn’t have much privacy either, right? I can also picture a kid in the middle bedroom setting up a taxation system and charging his brother for passage from the rear room.

bedroom access issue - sacramento appraisal blog

The layout of the house according to the appraiser (me):

2 or 3 bedroom - sacramento appraisal blog - part 2

I pulled three-bedroom comps before seeing the property, but I was surprised to discover it wasn’t really a 3-bedroom home because of a functional issue. I know this seems like a subjective call to axe a bedroom, but the functional issue definitely limits the use of the middle room, so it was not considered a bedroom. It’s too bad there was not more foresight when the addition on the rear of the house was done so the floor plan would be more functional. As a side note, I could have labeled the rear room as a den instead of the middle room, but since the rear room was larger in size, I thought it would more likely be used as a bedroom by the market.

Key Takeaways:

  1. Describe correctly: It’s important to describe properties correctly for the sake of clarity and even potential liability. This is true for both agents and appraisers.
  2. A Bedroom with functional obsolescence: I imagine some real estate professionals would call this a 3-bedroom home with functional obsolescence because one has to travel through a “bedroom” to get to a different bedroom. In my mind this was not a functional three-bedroom home, so I chose to describe it as a 2-bedroom home, but I would understand if someone wanted to describe it differently.
  3. The market’s response: The question becomes how to value something like this. Should we compare it to 2-bedroom or 3-bedroom homes? Well, it’s not really a regular 3-bedroom home, but it’s not really a traditional 2-bedroom home either because it has the extra space (den). Ideally, we should find a 2-bedroom property with a separate area like a den, office, or something else that is similar. If we’re lucky we might find a few sales with functional obsolescence (fat chance). Lastly, if the subject property has sold a few times in recent years, we might go back in time and see how the market valued the home. What did it compare to at the time of its previous sales?
  4. Tax Records isn’t the definitive authority: Just because Tax Records says it does not mean it’s accurate. In this case the home was functionally two bedrooms despite Tax Records saying it was three. As much as we want to trust Tax Records, sometimes we have to look at what is actually there and then try to understand why there is a difference between public records and reality. For reference, here are 10 reasons why public records and the appraiser’s square footage are often not the same.

I hope this was helpful. I’d love to hear your take in the comments.

Radio Interview: By the way, I did a radio interview last week on 105.5FM in Sacramento. Realtor Jay Stoops had me on his show. You can listen to our 20-minute conversation below (or here).

Questions: Is this a 2-bedroom home or a 3-bedroom home in your mind? Any other insight or stories to share? Did I miss anything?

If you liked this post, subscribe by email (or RSS). Thanks for being here.

One reason to take the Assessor’s records with a grain of salt

By 8 Comments

If the Assessor or Realist says a property is a duplex, does that make it a duplex? Not necessarily. Let me share a quick scenario to help illustrate the importance of taking what the Assessor says with a grain of salt. I recently appraised a property in Sacramento that is listed by the Assessor as a duplex (two houses on one lot). Upon inspecting the property though, the second dwelling was really an accessory unit instead of a full-fledged second unit. But more importantly, after digging around a bit I learned the secondary unit didn’t actually have any permits on file with the planning department or the building department. Granted, there was a fire in the 1970s at Sacramento County headquarters, so permits are incomplete at times, but still all signs in this case pointed toward the secondary unit NOT being permitted (despite Tax Records showing two units).

official records - image purchased by sacramento appraisal blog and used with permission - text

Moral of the Story: The Assessor doesn’t have the final say when it comes to what a property is and whether it is legal or not. In other words, just because the Assessor or Realist says there are two units does not mean there are actually two legal units on the property. Does zoning allow for two units? Were both units built with a permit? These are questions that are best answered from the planning and building department, so we need to give the most weight to what both of these departments say. On a related note, keep in mind Realist might also be incorrect about square footage, zoning, or bed/bath count, so be cautious about giving ultimate authority to what you see listed in Tax Records.

I hope this was a helpful reminder and maybe a good reference point when working with clients. Finding out what is actually legally constructed and allowable in terms of zoning takes work, but it can make all the difference, right?

Questions: Any thoughts on stories to share? Do you think a house with a non-permitted secondary accessory unit would sell for more in the marketplace? I’d love to hear your take.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

What’s the difference between a condominium and townhouse?

By 17 Comments

This week is “Condo Week” on the Sacramento Appraisal Blog, so we’ll be talking about condominiums throughout the week. Exciting stuff, right? It seems fitting to kick things off by discussing what a condominium is and how you can tell the difference between a condo and a townhouse (PUD) in the Sacramento area. 

What is a condominium?

A condominium is a multiple-unit dwelling in which there is separate and distinct ownership of individual units and joint ownership of common areas. For example, in an apartment house [or condo development], the individual owners would each own their own apartments while all the owners of the separate apartments would together own the parts of the building common to all of them, such as the entrances, laundry rooms, elevators, and hallways. The building is managed by the condominium association, either directly or through a professional manager. The owners of the individual units are jointly responsible for the costs of maintaining the building and common areas, but they are individually responsible for the maintenance expenses of their particular units. (definition from Free Dictionary)

Sometimes it’s not clear if a property is a condominium or townhouse though. How do you know the difference when these types of units can actually look very similar on the outside? The terms “condo” and “townhouse” are used interchangeably quite a bit too, which complicates things (sort of like “manufactured” and “modular”). There is usually an HOA managing the condo or townhouse development, but the big difference really boils down to a condominium owner not owning the individual parcel and a townhouse owner actually owning the land on which the unit is built.

It’s still not easy to identify whether a property is a condominium or townhouse though sometimes, so let me give you a few pointers if you’re searching in the Sacramento area. These tips may or may not work in other areas.

How can you identify a condominium in comparison to a townhouse in the Sacramento area?

1)  Are the units called condos or townhouses by the development? This is the first step to identify a property. I know this sounds simplistic, but most of the time units are not called “condos” unless that is what they are.

2)  Is there a lot size listed in Tax Records? If there is a lot size, this often means the property is a townhouse and not a condo. However, don’t use this “proof” by itself because many times condominiums actually have a specific lot size mentioned (even though they don’t have an individual lot). Ultimately, keep in mind that Tax Records is not the authority on determining what a property is and is not. 

3)  Does the plat map show specific lot dimensions for the individual unit on a parcel? If so, it’s most likely a townhouse PUD and not a condominium. This is an important indicator. The owner of the condominium does not have ownership of the entire site on which the unit is built, so there is no reason to give specific dimensions on the plat map for the lot shape. If an individual parcel is identified with dimensions on the plat map for the individual lot, it’s not a condo. Click the thumbnails to view larger images.

     

4)  What does the local planning department say about ownership?

5)  What does the preliminary title report say about ownership? This is the best source to identify what form of ownership a property has.

How else would you describe the difference between condominiums and townhouses?

If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our appraiser website or via Facebook.