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Phoenix AZ 85018
Phoenix AZ 85018
ACCESSORY DWELLING UNIT (ADU)
A CASE STUDY
My clients and I recently visited a home in Arcadia Lite that I had selected. It was a four-bedroom, three-bathroom house, but they needed extra space for their family. I specifically chose this house to provide that extra space. Prior to our visit, I had thoroughly researched the city zoning, setbacks, building height, etc., to determine if we could increase the home's value by adding an Accessory Dwelling Unit (ADU). I also prepared a design/plan for them so they could visualize the potential changes when we arrived at the property. While it may seem straightforward, this task requires extensive knowledge of zoning regulations and building restrictions in order to make informed decisions.
Accessory dwelling Units are small buildings that can be built under the zoning regulations of the City in which they are located. They are usually built in a home's backyard and can be used for various purposes. Each City has its own rules. For example, the cost can vary approximately from $50,000 to $350,000. They have become fashionable over the years, but I recommend you research them as the quality can vary dramatically. If the ADU is designed well, it can add more value to a home than the building cost.
With my expertise and knowledge in the construction industry, along with my experience in the ADU business, I was able to easily add value for my clients. I provided guidance on ADU placement and discussed city regulations with them to expedite decision-making and making an offer.
My clients were under contract to buy a multi-million dollar home, and the ten-day due diligence period had begun. Besides inspections, it's crucial to review documents like property descriptions, county assessor details, building plans, and permits, especially if the property has been remodeled or expanded. I gathered all plans and permits and compared the square footage to the listing and assessor's information, finding a significant discrepancy in square feet. After consulting with my clients, we hired an appraiser for a survey showing the home was indeed smaller than listed.
The due diligence period starts the day after the executed contract is received by the buyer and typically lasts ten days, though it can be adjusted. During this time, the buyer must investigate the property thoroughly, as it is purchased "As Is." By the end of this period, the buyer should have reviewed the title commitment, CC&Rs, and any HOA documents and submitted the Buyer Inspection Notice Seller Response (BINSR) to the seller. Based on the seller's response, the buyer can either accept their terms and proceed with the purchase or cancel the contract.
Due to our due diligence, we discovered the house was much smaller than what my buyer was initially under contract for. In light of this, we asked the seller for a concession, and they were not prepared to offer any. So, even though we canceled the contract, it was a positive outcome. One month later, they closed on another home.
While touring several homes with my clients, we came across one with three bedrooms and two and a half bathrooms. The low ceilings and chopped-up layout caught my eye. Drawing from my remodeling experience, I explained that many older homes have vaulted ceilings hidden above those low 8-foot ceilings. By removing the existing ceiling, we could create a spacious, vaulted open layout that not only enhances the home's aesthetic but also significantly increases its value.
Adding value to a home can take many forms, whether through an addition or a thoughtful remodel. While this may seem straightforward, it truly takes a trained eye to identify the best opportunities. I constantly seek solutions that others may overlook. The example above is just one of many ways I've helped clients enhance their homes over the years, leveraging my extensive experience in building to create lasting value.
This transformation not only created a contemporary space but also significantly increased the property's value, making it a smart investment for my clients.