Issue 18
Q: I have a new listing coming up. It is a house with an ADU built onto the back of the garage. Technically, it can be accessed from the front, around a path to space behind the garage. However, it is also accessed through the house. The current owners are not using the exterior access and it has become an overgrown mess. My gut says they need to fix this area up when selling. How big of a deal is this?
A: This is SUCH a great question! I definitely have thoughts on this issue.
Let’s bring it back to basics and talk about buyer pool.
When we are talking about middle housing, it is all about making the buyer pool as large as possible. Middle Housing and ADUs are still a relatively new type of property and people aren't sure what they are, how they work, or what the benefit to them could be. Until it becomes more mainstream and we have more people actually developing ADUs on their properties because it makes sense from multiple points of view – either earning extra income by renting out the space, having guest quarters for a parade of guests throughout the year, or housing multiple generations of family members, people who are buying a regular house to use as a primary residence may not consider buying a house with an ADU.
Therefore, the buyer pool for a house with an ADU is naturally smaller. With time, it will grow larger as more people learn about them, but as an agent, if you are listing a property now with an ADU, you don't have the benefit of time. However, you can control how large or small the buyer pool is (on any property) with four factors:
- PRICE - Price will naturally make the buyer pool smaller or larger. Any house will sell if priced right (or as Denise likes to say, "even ugly houses sell if priced well"). I am not saying the price should be reduced to a point in which everyone can buy. Assuming this property is priced competitively, we are going to take price out of the equation and instead focus on justifying the price.
- POSSIBILITY AND OPPORTUNITY – The key to making the buyer pool for a property with an ADU as large as possible is by opening up a new opportunity for a potential buyer. If a potential buyer can see the possibility in the property and regard it as a possibly solution, even a solution they didn't know they needed, then they may linger and learn more. With a listing, this education needs to be done quickly through photos and the listing description. I have some more thoughts on this below, but really the key is to make the buyer say, “Hmmm! We weren’t looking for a property that has an ADU, but the location is absolutely perfect for us AND the extra income could be fantastic.”
- BUILD VALUE - This is where you get the buyer more excited about the property by really getting into features and benefits. Feature - property has an ADU. Benefit - extra income or extra spaces that allow for privacy. Building value is done through photos, listing description, and supplements in the listing (have you seen our course on Marketing a Property with an ADU?), and in-property materials in the listing itself (think special feature cards, home book, etc).
- FUNCTIONALITY – This ties into the original question. Imagine now the buyer is opened up to the idea of getting some extra income by renting out the ADU, but the listing photos only show and highlight the ADU access through the house. That could be a stopping point for the buyer who is now thinking, “I don’t want a renter tromping through my house. Forget it! Next listing!” Lack of functionality becomes a stopping point for the buyer.
Whenever we have a listing of any sort that is unique and has a level of opportunity to explore, we want to eliminate stopping points. As the listing agent, your job is to identify stopping points and determine if they could be eliminated.
In the original question, the overgrown and cluttered ADU access created the stopping point. If I were listing this property, I would encourage the sellers to not only spruce that area up, but ENHANCE THE VISUAL APPEAL by showcasing the separateness of it. Yes, the ADU needs its own curb appeal! It needs a nice front door, a clear and lit pathway, and organic elements such as plants. In fact, a specific cleared path width and lighting may be required depending on the length of the path.
This ADU in the original question was behind the garage, so that path is likely at least 25-30 feet long minimum. A path that long may also need to be wider than 3' in order to not make it seem like a tunnel (especially if there isn't a lot of open space on either side). Nice landscaping to make it feel like a separate and special experience as that is either going to achieve a higher rent OR is going to make the guest or family member who is using the space feel more at ease.
For example, the entry shown below has some curb appeal and it is about halfway there. The door is freshly painted, but that is a lot of foliage. After the grape harvest is over, I would recommend trimming a lot of that back. This time of year, especially, I am thinking about all the spider webs I could be walking through to get to the door. No thank you! I would also make sure that is well-lit with lights both at the door and on the path.
However, one thing this ADU has going for it is the sense of separateness. With the potential this entry has, I wouldn't be worried about renters tromping through my house. Therefore, this checks the functionality box in my buyer pool checklist.
Want to learn more about little design tweaks that can make a big difference in terms of price for both a listing AND potential rent income?
Denise has three courses that provide great ideas and design know-how in our Middle Housing Course Design Track. A well-thought out small space can yield hundreds of dollars more in rental income every month and thousands of dollars more on the sales price of a property with an ADU.
As a listing agent, you can become the go-to resource for maximizing listing and rental dollars! The below courses will give you a great head start!
- Designing and Building an ADU
- Smart Middle Housing Design
- Design Innovations that Make a Small Space Live Large
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LEARN MORE: https://www.middlehousinghelp.com/design-track
Offer expires 10/31
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