A homeowner asked me a good question the other day about the appraisal I had done on her home. They had been using one of the rooms in the house as a bedroom for their child, but in the appraisal I was not able to count it as a bedroom. She asked me why.
My explanation to her included two reasons that have to do with what appraisers call functional utility. The Dictionary of Real Estate Appraisal defines functional utility as follows:
The ability of a property or a building to be useful and to perform the function for which it is intended according to current market tastes and standards, as well as the efficiency of a building’s use in terms of architectural style, design and layout, traffic patterns, and sizes and types of rooms.
The room in question was in a part of the house that required you to go through another bedroom to get to it. In addition, it did not have a closet. The definition above mentions traffic patterns and that was the room’s main problem. By going through the first bedroom you would have to disturb the people in it. While this may have been typical and accepted years ago, and by the way this house was built in the 1950’s, it is not considered to be part of today’s “current market tastes and standards”. In addition, it did not have a closet, which is typical in the bedrooms of modern homes. The living area in this room was included in the final value, however the utility of an extra bedroom was not.
It is possible to fix this type of problem by creating an access to it from another room, however the layout of the house would have to be considered to see if this is practical. Have you ever had this type of problem in a house you’ve lived in? How was in fixed, if at all? Leave me a message below, I would be interested in finding out how you “fixed” the problem.
If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.
We are getting our home appraised in WI for a refinance loan. We have a 2 bedroom home, but have made 3 bedrooms in the basement. I know these will not qualify as bedrooms because they do not have a closet or egress windows. Is this something that we can get in trouble for? Should we remove the beds from the rooms prior to the inspector coming or would we be okay leaving the beds, knowing they will not be counted as a bedroom?
You will not get into trouble for this. I see it all the time. Many homeowners utilize these rooms as bedrooms, however, from an appraiser’s perspective they cannot be classified as bedrooms for the reasons you describe. I would say that you are safe to leave it as it is.
We have a finished a “walk out” basement in a 1969 ranch in Alabama with a “bedroom”. The room in question has French doors leading to the outside, a separate door leading to a family room in the basement and an ensuite bathroom that contains a closet. There is a doorway (but no door) connecting the bathroom with closet but no door in place. Is this considered a bedroom?
It sounds like it does. In today’s market, buyers expect bedrooms to have closets and tax assessors usually require the room to have exterior access.
I turned what would be considered a small 3rd bedroom into a master closet giving access to the room from master bedroom. I also took out the French doors that led to the bedroom and installed a pocket door for the main entrance to the bedroom/master closet. All it would take for the closet to become a room again is 3 2×4’s and a sheet of drywall, and the removal of a shelf. I’m getting an appraisal next week. Will they consider this a closet or a bedroom, or will it add value being it is a very convertible space. The closet is complete custom with a big window and a register from central air in it.
I have seen this done before Stephen and it depends on how it was done. You’ll want to ask yourself if it would be possible for someone to use it as a 3rd bedroom without doing anything to it. The appraiser could appraise it as a 3 bedroom and consider the cost to convert it back, however, this would be a “subject to” appraisal, which the bank may not like. Another way to look at it is a 2 bedroom with no cost to cure estimates need. You will get credit for the square footage but it may suffer due to decreased functionality. You may want to talk to the loan officer to see which way they will allow for it to be looked at.