A real estate agent asked me this question last week via email, so I thought I would share my response. How would you answer this question?
Question: I was wondering if you could tell me how much value you give a bedroom and full bath. Is there some kind of guideline for us agents to look at?
Answer: There really isn’t a standard bedroom or bathroom adjustment. Well, I will say appraisers often give $5000 for a bathroom and $5,000 to $10,000 for a bedroom, but those are often just filler adjustments that may or may not really reflect the market. Ultimately it depends on the neighborhood as well as the overall square footage. For instance, the difference between a 2-bedroom and 3-bedroom unit can be substantial depending on the neighborhood and sometimes easily $20-30K+ (not just $10,000). The same holds true for the distinction between one and two bathrooms as the price gap is often much wider than just $5,000. It seems like the price variance between three and four bedrooms depends heavily on the size of the property. A four-bedroom unit is usually larger in size than a 3-bedroom house, so it naturally carries a value premium. However, that’s not always the case. For instance, an 1100 square foot 4-bedroom house might not sell for more than a 1100 square foot 3-bedroom house because the 4-bedroom house probably has a tiny Living Room.
I wish I could give an exact answer, but the most honest response is that there is no end-all solution other than to research sales in the neighborhood. What do the competitive sales tell us? It’s also important to look closely at square footage because a price distinction for bedroom count may in part be due to the larger size. Lastly, I try to always compare single story with single story and 2-story with 2-story. That helps promote better adjustments.
Any other thoughts? Feel free to share your insight in the comments below.
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How much for a walk-out basement?
Hi Dianne. That’s a great question, and the answer is really the same as above. It really depends on what houses with walk-out basements are selling for compared to houses without them. The value will probably vary significantly based on the neighborhood market, location, quality of finish, etc…
I just got an appraisal…and we got $1000 more than a smaller house with 1 less bedroom and 1 less bathroom. Same development, same builder, a block away.
The “appraiser’s” notes literally say the number of bedrooms doesn’t warrant an increase of value because it is just buyer preference. No difference in 3v4 bedroom or 4v5 bedroom. There’s no damage, the houses are only a few years old. So….I prefer 10 bedrooms, and a 6 car garage….it’s just my preference, can I get it for 350,000? That’s the price I would prefer too. I would have been fine with our appraisal if I hadn’t seen that. I’m pretty sure he should not be licensed.
Hi Nico. Sorry to hear about your situation. It’s really hard to comment here because I don’t know the details of your market. I was actually just on the phone with an agent friend wondering why bedroom count wasn’t adjusted for in the appraisal. I don’t know about your appraisal, but sometimes appraisers adjust for square footage and the value of any bedroom difference is found there. It’s entirely reasonable to do it that way. This is not to say you didn’t get a low appraisal. I’m just saying I wonder if the appraiser accounted for any difference within the square footage adjustment?
My duplex has been appraised 3 times and all 3 times they left out the second full bathroom for both sides of my in the appraisal. The second full bath is in the finished basements but there is no egress. Shouldn’t they still count towards the value of the home?
Hi Ryan. Thanks for reaching out. I get it if appraisers left it out because bedroom and bathroom count in the appraisal typically only involve above-grade space. The idea is since the basement is not considered as square footage, the bathroom down there then isn’t being lumped into the total count. There are situations where appraisers will count a basement as square footage, but it’s less common at least in my market. https://sacramentoappraisalblog.com/2014/05/27/can-a-basement-be-consdered-square-footage/
The one thing to consider is just because something is not listed does not mean it was not considered in the value. It’s possible an appraiser can consider something like this in the final reconciliation of value. What I mean is when the appraiser is coming up with the final value, the appraiser can consider everything the unit has to offer and then assign a value higher or lower based on that. Or sometimes a unit has a little something extra that might not be listed on the sales grid (where the comps are located), but maybe an appraiser reconciles value to the higher end of the adjusted range in the report because the subject has an extra edge. Of course at times sometimes it makes sense to bring the value in at the lower end of the range too for other reasons.
I hope that helps.