No Value to Un-Permitted Space Unless Comps Have Similar Space

We were asked about an Oakland property today with three bedrooms and one bath upstairs (permitted), and three bedrooms and one bath downstairs (un-permitted).

The issue is this: The Oakland market gives tremendous value to un-permitted space, but appraisers are usually not allowed to. So getting the property to appraise will be difficult.

Appraisers have to use three bedroom/one bath comparable sales, and only give marginal value to the un-permitted space.

The only way appraisers can attribute full market value to the un-permitted space is when they can find comparable sales with similar permitted room counts and similar un-permitted room counts. In tract neighborhoods, it is very difficult to find such comps, but in non-conforming areas like Oakland, such comps sometimes pop up (but cannot be counted on).

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646