2012 Sep 19th

A Particularly Hoboken-based Appraisal Problem

When is a 1 Bedroom not really a 1 Bedroom?

Here is a situation that came up recently during an appraisal.  Hoboken has lots of small buildings with the same basic configuration.  You’ve all seen them – the 4 story walk-ups with the door to one side.  What happens in these types of buildings is that you get a little room on the other floors that is over the lobby of the parlor floor.  We advertise them in the MLS as “perfect for baby or office” because, while they often have a window and closet, they are not big enough for a Queen size bed.  Legally, it’s a bedroom but it’s more like a mini-bedroom or a half of a bedroom.

When you own a property with this extra little room, there is no doubt that it is valuable space.  Whether you work from home and use it as your office or turn it into a guest room or nursery, it is a wholly different thing than a regular 1-bedroom layout.  Yet appraisers who do not know Hoboken properties don’t get it and don’t value it.  This is just one example of the continuing problem with the current appraisal system.  The value comes in too low, something that happens more and more in a rising market like ours.

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  1. JC

    This is a huge problem and a reason many will not qualify for a refinance or afford to buy. My appraisal done last week came in very low in my opinion. The adjustment for a backyard is only $10,000 and the adjustment for 100 square feet is only $4,000!!!! All things being equal; a 1000 square foot apartment vs. a 900 square foot apartment is only $4,000. Thats $40 Per square foot! This isnt the suburbs where 100 square feet doesnt make a difference.

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