Advice on Buying a Multi Unit Property with CO pending

[Louis Zameryka]

Im looking at a flag property that has a 3 bed 2 bath main house and another structure that currently is 2 rooms and a bathroom. Neither of those rooms were described as a kitchen or a bedroom but in speaking with the realtor she says there is a c/o application in for the second building. I’m not really sure it would be approved. The lot seems too small and the unit would need a kitchenette.

Why I’m asking is because this property is listed about $220k below a house around the block that is a larger lot that has two bungalows on it.

Meaning if this listing could be one main house with 1 small accessory apartment in theory it would appraise for much more.

Any advice on my “theory” and how to navigate this? Do I negotiate a low price because of no CO, make my offer contingent on them getting it? I’m new to this so any advice is very very appreciated.