Saturday, December 20, 2008

What's an Unfinished Attic Worth?

A reader sent this in:
"So I get these email alerts when new things pop up in certain areas within certain price ranges.

It says the seller is a licensed realtor. I checked Portland maps (which lists 964 sf as opposed to the 2,264sf on the listing) [ed - of course!] to see when it was last sold. However, there is no information listed there. I have been noticing this recently and I was wondering if you knew why it would sometimes not display the last time a house was sold (and for how much)?

It seems a mystery to me. Also, since they're clearly including the finished attic but there is no permit and pmaps indicates that it is unfinished, does that mean that all work was done without permits?"
My take on a lack of previous sale information is that the house last sold before Portland started putting all it's records online, around 2000 I believe.

If you're seriously interested in a house a Realtor should be able to dig that up for you, or you can go down to the city and look up past records.

As for the attic, I bet it was finished years ago without a permit. If it's not specifically listed as finished space then it was likely not permitted, or inspected. The work might be fine, or it might be a fire-hazard just waiting for your mega-watt hair dryer and space heater to both be plugged into the same circuit.

If it was me I would consider the attic "semi-finished" space, not worth the same value as properly-finished space, but worth a bit more than unfinished space. Assuming you don't need to rip out the entire second floor and start over. In which case it's worth LESS than unfinished space to account for extra demolition work.

When I'm comparing houses I use a basic formula to translate unfinished space into finished space, to make it easier to compare apples to apples. I assume unfinished space is equal to half the same finished space, assuming it can be finished (no 6 ft ceilings, at least for me) because it costs less to finish a basement than to add on a new wing or add another story to a house.

So for this house:

Finished space: 964 sq ft
Unfinished space: 1300 sq ft (assume all of the basement could be finished)
Calculated finished space: 1714 sq ft (964 + 1/2*1300)

Estimated price / sq ft = $325,000 / 1714 = $189.6 / sq ft

Now it's easier for me to compare different houses on the same level.

I also like to compare the averages with the stats on Trulia. I believe Trulia uses the assessor data, so to compare this house you'd use the 964 sq ft figure for an average of $337 / sq ft. WAY overpriced in my opinion, even if the house is cute (which it is).

These are a couple of tricks I use to bring the discussion back to facts and data and get past the emotional and cute factor.

Good luck with your search!


(Got a question about a house you're interested in? Send me an email and I'll let you know what I think.)

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Anonymous said...

The realtor, who owns this house, has bought homes in the Portland area for at least 25 years. This house may have been a long term rental. Looks like someone just went in and cleaned up.

A lot of listings are realtor owned right now. This could either indicate concern or desperation. Of worry about higher taxes next year.

If you buy a realtor owned property be sure to minus the commission from the list price.

Cute doesn't just equal clean with neutral paint in my book.

insomnibus said...

Thanks PDXOutsider!

bearlee said...

Our house which we bought and then sold 8 yrs later has sales data going back to 1996. Our old neighbor has sales data going back to 1991 and I've seen sales data on other homes going back to 1985. I think it's the permit data that is more limited. The manner in which the house is sold might also impact the data on Portland Maps. I've always wondered what "Bargain and Sale Deed" vs "Warranty Deed" vs "ER" means.