How to use a mistake to my advantage

Question

I recently looked at a home for my personal use (not investment), and the house is listed as a 5 bedroom house. However, in GA, to be considered a bedroom there has to be a window and a closet. And the 2 "rooms" in the basement do not have windows. So legally, I'm pretty sure it should only be listed as a 3 bedroom house. I'm trying to think of ways to use this to my advantage. The only thing I've come up with so far is hoping it doesn't appraise for the agreed upon price once the appraiser sees it's only a 3 bedroom house, not 5.

Any experience someone has with something like would be appreciated.

Michael Dumler · Answer

@Michael H., so what are sold comps indicating for a 3 bed/2 bath SFH in the area? I'm not an appraiser, but I believe you're correct. Whoever conducts the appraisal can't legally include the unpermitted rooms in the report. Those rooms should be defined as, "additional livable space/square footage", which indeed adds value to the property, but as you mentioned, are not legal rooms. Look at the tax records to confirm. I'm assuming you included an appraisal contingency in the offer? If the appraisal report comes back satisfactory at the intended purchase price, then I don't see much area for how you can negotiate a price reduction or seller concessions. Hope this makes sense and helps!

Account Closed · Answer

You are correct. That's true in most jurisdictions and according to FHA and VA a bedroom has to have a closet (sometimes an appraiser will allow a standing wardrobe or armoire) and a window or they won't fund the loan.

The egress window in your bedroom should be at least 20 inches wide and 24 inches in height with the sill being no more than 44" from the finished floor. Its opening must be 5.7 square feet or greater. This gap would be wide enough for an emergency exit so that fire and rescue support can climb through a window with supplies.

Without those two conditions the room becomes an extra room, but not a bedroom.

No appraiser in his right mind will call a room a bedroom unless it meets the criteria, otherwise he faces losing his license.

Brad S. · Answer

There are a couple of issues to consider here:

1) Legal - the local planning/building dept are the people that dictate what a "legal" bedroom is. Not FHA, VA, an appraiser, broker/agent. In my experience (as an appraiser, broker, rehabber/builder), I have appraised and owned properties in which no bedrooms had a closet. Many years ago, it was common to have free standing dressers/armoires in bedrooms, with no closets, but that doesn't make that house bedroomless. I have limited experience in other markets, but in my markets, I am not aware of a closet requirement or window requirement, but there does need to be 2 ways to egress (exit) and some form of natural light (a skylight counts).

That said, my job as an appraiser is not to verify local codes, there are a certain amount of assumptions we make. So, I may have a reasonable basis to call something a bedroom, but the local building dept may say otherwise. So, don't go by what an appraiser or broker/agent says, verify directly with the building dept. You really need to know the building requirements for bedrooms in a specific area, to be sure. Also, just because it may have the attributes of a bedroom, does not mean it is legally considered to be a bedroom.

2) Marketing - Many properties are marketed differently. I have seen many listings that will include detached bedrooms in the main room count and many that will include non-permitted areas, etc. Their responsibility is to disclose that at or close to the purchase agreement, but just because it is listed that way, doesn't make it illegal marketing.

3) Value in Use - Just because a room is not considered a "legal bedroom," doesn't mean it has less value. A buyer (or the market in general) may still see the value in that space, to be used as a bedroom, even if it may not be legal. So, generally speaking, bedroom differences may or may not have a significant appeal or value affect, to the market.

That said, I would still definitely use their marketing it as a 5 bedroom house, as a negotiating point. And, I would meet the appraiser when he does the inspection and explain that the basement rooms, may not be legal bedrooms and also point out any other "facts" that may help your case.

Michael H. · Answer

It was built in 1974. I'll have to do some digging to see if there are different rules for older houses... thanks for the tip.

Taylor L. · Answer

How old is the house? Have you checked the property records to see if perhaps it was grandfathered in?

How to use a mistake to my advantage

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