Source:  – Ryan Lindquist
Note: Ryan’s blog postings are written for home owners in his area, but are often helpful for appraisers also.


Is it a second unit or an accessory dwelling? How do you know the difference? If the post office gives the second structure an address, that makes it a second unit, right? Or if the dwellings are separately metered, it must mean there are two units. Let’s talk through some distinctions below, and then discuss a bit of a “monkey wrench” since there is an added subjective layer when making this call.

The Short Answer: A second unit and an accessory dwelling might look like the same thing to a casual observer, but what matters most in determining whether a structure is a second unit or accessory dwelling is what zoning allows and whether the market perceives the structure as a second unit or not. The post office might have a separate address for an accessory dwelling, but that does not make it a legal and legitimate second unit. The utility company might have two meters on site also, but even that does not mean there are two units. The key comes down to the property being legal as two units in the eyes of the city or county, recognized by the market as a second unit, and even how the dwelling contributes to value.

The Monkey Wrench: Part of determining whether something is an accessory dwelling or second unit comes down to its contributory value, and the appraiser is really going to have to give this some thought…

My comment: I’m working on an appraisal of a property that has two legal homes on one lot. The front house is 2 bedroom/1 bath 1,500 sq.ft. The rear house is 2 bedroom/1 bath 1,000 sq.ft. In my city, most detached units are small “cottages” behind much larger homes and are marketed as homes with an extra unit and as duplexes. Most sell as homes with a small rear unit. Of course, when I got to the property, I found out the rear unit was much larger than the typical rear cottage!! Our market is very, very strong with a shortage of inventory. Many buyers are priced out of the sfr market and are looking at properties with 2 units, but they want a unit with at least 3 bedrooms for owner occupancy. I am still trying to figure out how my subject fits into this market as the front unit lacks a third bedroom, but does have a small room that could be used as a child’s bedroom. I am interviewing lots of agents and going on the weekly open home caravan looking at listings. Fortunately, this is not for a lender so I can take extra time to figure it out!!

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1 Comment
  1. Love your blog
    I’m refinancing my house and the lender send an appraiser
    I have 2 units on 1 acre
    Custom in morada near Stockton SJ county
    The front house I built in 2002 3155 sq ft and attached 3 car garage. 4 bd 3.5 baths
    Then I built a second unit with 1498 sq ft. Also 3 car garage and 2 bedrooms. 2 baths, patio, kitchen has it’s own utilities and address but same parcel number
    When I recieved the appraiser he put accessory unit instead of second unit and living sq footage does not mention the back house and only value was for property. Main house and garage /carport
    Your thoughts on what I should do
    Luckily the house value is still good for the loan but it’s bugging me that no value given and the ADU vs 2 unit

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