Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
There is a house I'm interested in that has a finished basement with a bathroom in it. In two separate conversations, one with homeowner and one with my agent, I heard two statements
1. From homeowner - If it becomes an issue, then, per their CO expeditor (hired for another aspect of house), it's simply a matter of getting in a plumber and doing the application which takes about a week.
2. From my agent - She said something to the effect of "zero value has been placed on the basement so it won't be factored in during the appraisal."
So my questions are - Is #1 even remotely accurate? And is #2 some sort of weird loophole or is this just being made up?
To my knowledge, it is best to run away from any home without a c/o for all of the major improvements.
Also, any lending bank or mortgage company will never approve you for a loan without a c/o for something as major as a bathroom.
If that home were to have a fire or damage, your homeowner's insurance would not reimburse you because you had an illegal aspect to the home (so I have heard).
When we bought our home, we made sure the owner had all of the c/o's for all his additions. The owner had just gotten all the c/o's because no one could buy his home without it and he had to pull it off the market until they cleared.
(I think only all cash deals don't require a c/o)
I don't know how long an expeditor works, but a week seems awfully short. I believe basement bathrooms count in the appraisal...unless the town has rules I have never heard of.
There is a house I'm interested in that has a finished basement with a bathroom in it. In two separate conversations, one with homeowner and one with my agent, I heard two statements
1. From homeowner - If it becomes an issue, then, per their CO expeditor (hired for another aspect of house), it's simply a matter of getting in a plumber and doing the application which takes about a week.
2. From my agent - She said something to the effect of "zero value has been placed on the basement so it won't be factored in during the appraisal."
So my questions are - Is #1 even remotely accurate? And is #2 some sort of weird loophole or is this just being made up?
re #1: For the most part yes. 2 weeks does seem a little quick but if the plumber has an in w/ the town I can see it being reasonable.
The thing I'd be concerned about is what if something isn't up to code? Will the plumber be willing to sign off on it anyway? Even if he does, will the ionspector be willing to sogn off on something that's not up to code? I really doubt it. So the only way to get the CO in that case would be to get it up to code or rip out the offending enhancement. A bathroom in a basement? That might be a tough one depending on the town this is in.
And I'm not sure it would be just a plumber. I'd think you'd need an electrician to come in as well.
re #2. That doesn't make sense. "won't be factored in during the appraisal."
So the property hasn't been appraised yet. And the house is priced as if it did not have a finished basement?
If that is the case, how does she know the appraiser will not factor a finished basement into the value they place on the house? I really can't imagine that an appraiser would overlook an entire basement.
Either way, I would think that's a positive for you.
The seller has a listed price at a value as if the basement was original. The appraiser includes it in their assesment and the value comes in higher than the listed price. As long as the seller doesn't then insist on raising the price you should be fine.
ETA:
Keep in mind that major improvements on a home, like a finished basement, extra bath, etc...
Generally mean an increase in property taxes.
Yeah the CO thing is such a tricky balance, since it seems that most houses I like are due to their size while being within my price range, but these are the properties where homeowners don't bother getting CO's until it's time to sell.
If an expeditor says item 1 is doable, then I'd like to think it can be done within roughly that time frame. I'm still not clear what my agent meant by #2 though.
Some banks that I know of will ignore c/o issues like that one if no value is attributed to the improvement. In other words, if it is a 3 Bedroom, 2 bath home, but one of the bathrooms does not have a c/o they will appraise it as if it is a 3 bedroom, 1 bath home. This is a fairly common practice.
Tom,
Is it that no value is attributed or it's entirely ignored?
Would the appraiser specifically say that there is finished basement w/ bath and no CO but that they are placing no value on it?
Or would the appraiser say absolutely nothing about it?
Also, what you said, does that apply even in this environment where the banks are scurtinizing way more than they did a few years ago?
Recently closed on a house with a finished attic. Appraiser didn't attribute value to the two rooms - case closed! Of course the appraisal has to support the purchase price without the item in question...
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
