Home Selling in Nashville>Question Details

Dondi Delk, Real Estate Pro in Nashville, TN

How do I price a detached studio/guest suite so that it will appraise?

Asked by Dondi Delk, Nashville, TN Mon Mar 12, 2012

I am about to list a home where the main part of the home is 1308 sq feet. The seller converted the detached 2 car garage into a lovely studio/guest suite. Adding almost 400 sq ft. This room has dry wall, shingle roof, HVAC, hardwood floors. Looks just like the main part of the home- yet detached.
I understand that with the room being detached there will not be 100% price per sq ft value but I am not sure how to value this room so that it will appraise. Any ideas?

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4
I would suggest getting it appraised, The Wiley Group does a very good job.
Sharon
0 votes Thank Flag Link Mon Mar 12, 2012
Dondi you want to first make sure it was built with approvals or permits. Then you have to determine if it is a legal 2nd unit or must be considered as part of the single family home. When i appraise finished square footage in a basement, attic or detached structure i usually base it on $50 sf. It represents roughly 1/2 of what the value per square of of the house would be. If it is a legal 2nd unit it could be worth much more equal tio teh same price per sf for the home. If it was built without permits it could be worth 0 if you have to go after the fact to get permits.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Mar 12, 2012
hi Dondi,
Kevin makes a good point, but I am now in a situation where my mom has taken ill, and moved in with us. Fortunately, we had the space and a separate entrance so she could have (or keep) that feeling of independence. I think there are many buyers and many reasons your studio/guest suite/man cave/game room could be priced at full value of any other sq foot in the home. Besides, if permits were pulled to do the work, doesn't the county count it as above grade sq. feet? I think you might be close to 90-95-100%.
I hope it turns out well for you and your seller...
Jim
0 votes Thank Flag Link Mon Mar 12, 2012
Many times you see well finished basements return 50%-75% (sometimes even better). I'd be aiming for that 75% number since it's new and feels like the rest of the home. Hopefully they can also stage it and show an immediately understandable use for the space. Would love to hear from an appraiser directly that could shed some light on their precise considerations...

Kevin Pellatiro, realtor
Hoping to help you take advantage of the market – when you are ready.
(615)714-7918 | kpellatiro@realtracs.com
0 votes Thank Flag Link Mon Mar 12, 2012
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