Evaluating a property with a new bedroom with no work done to it

[Ray Lai]

Hey all,

Something strange has happened and was wondering if anyone had dealt with this before. I'm evaluating a townhome that originally was a 3br/3ba purchased by a buyer 2 years ago in San Diego for $431,000 but the tax records show that it's now a 4br/3ba but one of the 'bedrooms' does not have a 4th wall and isn't really a bedroom. The tax records show it as a 4th bedroom. My guess is that they filed paperwork with the city and pay more taxes to declare the small room as a bedroom to add to resale value, but it's not really a bedroom since it doesn't have a wall separating it. Not sure how to do valuation in this weird situation where it's kinda a bedroom, but missing a wall. The city states it a bedroom, but the buyer didn't do any work other than file with the city that it's another bedroom. With townhomes, I'm not even sure you could 'add' a bedroom without your HOA's approval when really they haven't done anything. Now they are asking $490k for it and valuing it based on the extra bedroom.

Short version: 3br became a 4br without any work but it's missing a wall and is a tiny room. How to do comps? It's not really a 4br, but not really a 3br

Thanks,

Ray

[Ray Lai]

@David Dachtera

the comps range from $405k for a 3br 2ba 1271 square feet (cheapest but 1 bathroom short) to $705k for a 3/3 with 1431 square ft.

The place I'm looking at is 1390 sq ft.  3 or 4 beds? to 3 full baths.

The best comp I could come up with was a $443k sold in the same complex but it's a 3/2.5 with 1247 sq. feet sold in March. Small sq feet, a half bath instead of a full, and missing the .5 bedroom