Zoom Call  5.23.23 ADU'S Gaining Acceptance in the Market 

By
Real Estate Agent with Mapleridge Realty, CT 203-206-0754 REB.0759001

Zoom Call  5.23.23 ADU'S Gaining Acceptance in the Market 

Zoom Call  5.23.23 ADU'S Gaining Acceptance in the Market The zoom call for the week of 5.23 was a continuation of the previous week and was presented by Lenska Bracknell, a key employee of the Crest Backyard Homes Co.

ADU's is currently enjoying a large market acceptance as people look for investments or to improve their values for rental units. 

ADU'S Gaining Acceptance in the Market An ADU has a variety of names that it has acquired over the years. Its most factual name is one of additional living space with individual conveniences.

Its additional value is that of being close to the main dwelling, offering security for the elderly family members, yet maintaining a semblance of independence.

Factory built modular homes have few limitations when it comes to size and conveniences and can see a sales price in the millions.

ADU'S Gaining Acceptance in the Market The increase in values of prefab dwellings over the past 5 years has appreciated comparably to the appreciation in value of single-family homes.

Simultaneously the cost of a prefab dwelling has been shown to be less than a conventionally built single family home due to economies in manufacturing, less waste and the efficiencies afforded to consistencies.

ADU'S Gaining Acceptance in the Market ADU's, while being generally accepted in the marketplace for their space advantages and costs, are having a difficult time in being accepted by lenders and appraisers.

The acceptance starts with having the federal lending sources, Fannie Mae, Freddie Mac on board as recognizing value and allowing loans to be used for their purchase.  There is acceptance of a land purchase with the addition of a manufactured housing unit being approved.

As the is no single name applied to a ADU, it creates confusion to lenders and appraisers. 

It was not uncommon for larger homes to have detached guest quarters, While these were seldom looked at by towns as income producing property their valuations to a tax base were always allowed. 

Education appraiser or real estate agents is essential for allowing ADU's to gain acceptance. In some areas, there are fields in the MLS systems to allow for an ADU as part of a market valuation. This gains more acceptance with more frequency in the market.

ADU'S Gaining Acceptance in the Market Unlike a single family dwelling, which includes the land as part of the valuation, an ADU must be looked at as a dwelling that adds value to the land only.

For investors, the appreciation of the dwelling needs to be balanced against the profitability of the investment on a monthly rental basis.

Currently Fannie Mae does not allow the cost approach to be used in determining value of an ADU.  There is some inconsistency in the marketplace and as such a manufactured home can be accepted, but for its valuation, owners need to keep the invoice of the unit handy when an appraiser comes to look at the dwelling and appurtenances.

ADU'S Gaining Acceptance in the Market 

Fannie Mae has been looking at ADU's  for values but also has been mandating that appraisers look for supporting details to determine the value of ADUs.

With ADU's on a property, the property takes on a determination of value for multi-family dwellings, and no longer a single-family residence with apartment, or apartments up to a total of 4.

ADU'S Gaining Acceptance in the Market When looking at ADU's, their value vs a stick-built unit offer significant value as they are topically less costly with comparable cash flow which increases their ROI.

They are also faster to build, as the site preparation can be done at the same time that the unit is being built in the factory. Field connections are done at a single point, so their use is quicker as well.

The call was informational and many site photos were offered of installations and the issues that would have been encountered on some of the sites.

The first part of the presentation was:

Zoom Call 5.16.23 John Arendsen Accessory Dwelling Units

 

Zoom Call  5.23.23 ADU'S Gaining Acceptance in the Market 

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Edward (Ed) Silva
Broker Associate

Serving Central Connecticut Sellers and Buyers

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Comments (19)

Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Ed, was a super busy day yesterday, so thank you for sharing a recap on ADUs, they are gaining so much popularity.

May 25, 2023 08:07 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Ed,

I always look forward to your recap of the ZOOM calls.  My brokerage has Tuesdays as our meeting days, including tours of the new homes on the market. 

May 25, 2023 08:13 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Hi Ed... another great synopsis of a call I missed. Don't know what I'd do without you!

May 25, 2023 08:50 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Thanks so much for the recap of the ADU presentation, Ed.  I was on the freeway heading to LA at the time so obviously wasn't available. Lots of great information here especially for those who could not attend.

Jeff

 

    Featured in BananaTude

May 25, 2023 09:15 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Joan Cox   It was a very informative call and Lenska offered a lot of help regarding appraisals.

Sheri Sperry - MCNE®  I am starting to feel a sense of responsibility to attend the calls just because of people like you.

 

May 25, 2023 09:54 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

Nina Hollander, Broker   Oh, be still my heart!

Jeff Dowler, CRS   Thank you for the recognition. As they are close to you, you can almost go in for a refresher at any time.

May 25, 2023 09:56 AM
Roy Kelley
Retired - Gaithersburg, MD

Thank you very much, Ed, for your report on this Zoom session.

May 25, 2023 11:46 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Ed Silva  Sorry I missed this Zoom meeting I was back 10 minutes after it ended. We can always count on you to give a wonderful recap  

May 25, 2023 12:02 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Ed both parts of this presentation were packed with a lot of information.  I learned a lot about ADU’s

May 25, 2023 04:10 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Hi Ed- thank you for the recap. And yes, it was another informative Zoom session. I've learned quite a bit about ADU's!!

May 25, 2023 06:02 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

It can be very much a struggle to find your unique voice. We all have that time to grow, and move an

May 25, 2023 08:57 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Thanks so much for the recap of the ADU presentation, Ed Silva. It was such an interesting and informative Zoom meeting and I learned a lot about ADU’s

May 26, 2023 05:54 AM
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Sounds like I missed another good one.  I am glad that you do these summaries since it allows me to learn some of what was discussed at the meeting.

May 26, 2023 06:43 AM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

The depth of knowledge and experience of Lenska Bracknell was extremely impressive. She would be a great addition to any team in the ADU arena.

May 26, 2023 09:32 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I agree with all of you. That confidence mixed with your repetition is the key here. Good luck once again. :

May 27, 2023 12:51 AM
Dr. Paula McDonald
Beam & Branch Realty - Granbury, TX
Granbury, TX 936-203-0279

An excellent re-cap of this information. I have not heard of the acronym ADU.

May 27, 2023 05:15 AM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hey Ed,
You amaze me with your recaps. And, yet, those who don't attend these presentations have no idea how much more they're missing, do they?

May 27, 2023 08:12 AM
Edward Gilmartin
CRE - Boston, MA

ADUs can solve Americas real estate problems but politicians and many home owners don’t want that in their neighborhood

May 27, 2023 10:54 AM
Ray Henson
eXp Realty of California, Inc. (lic. #01878277) - Elk Grove, CA
Realtor

Thank you for the thorough summary of the Zoom Meeting.  I think there is a real place for them and, when they are done right, can really enhance value.  Here in PebbleCreek, a lot of people are building Casitas.  They do add value, but they are not supposed to be used as rentals making it even more difficult to determine how much value they add.

May 27, 2023 03:35 PM