The driving 70-miles may or may not matter. The market area I appraise in and am competent to do so includes areas 70-miles away. I wouldn't focus on that.... yet.
Here's my advice (the words in quotation marks have a significant meaning in appraisal-world):
1. The term I would use as far as "value" and your guest house is "contributory value". If the appraisal has valued your property (land + improvements; the improvement in this case is the main house and its garage) the reasonable and fair question to ask is "Does the appraisal conclude that the 600sf permitted guest house has no "contributory value" to the land + main house?"
2. Ask your lender if they think that is a "reasonable" conclusion and if the appraisal is "credible" ("reasonable" means does the conclusion make sense based on the analysis provided in the report; "credible" means should the results i.e., the value, be considered believable).
3. Request a copy of the report so you can consider a "reconsideration request" (reconsideration of value is the process in which a stakeholder can ask specific questions and sometimes provide additional information for the appraiser to consider. A reconsideration request doesn't automatically result in any change; it is supposed to result in the appraiser considering the request on its merits and based on the information it includes. Factual errors that affect value should be corrected and the value, if affected, should be reconsidered. Not all factual errors affect value and not all errors that affect value warrant a change in value; small things are trivial and not of consequence. I would think a 600sf guest house is consequential IF it does contribute value to your property).
4. Read the appraisal report. See how the appraisal identifies and considers the guest house in the valuation analysis. I would expect the appraisal to discuss (a) how it valued the guest house if the guest house contributes value to the property or (b) how the appraisal analyzed the guest house and concluded that there was no contributory value. In my opinion, a statement like, "No other guest houses in the neighborhood were found; therefore, no contributory value is assigned to the guest house" is inadequate on its face. But that's me.
However, if the report went on to say something like "I interviewed local market participants and they concurred that this amenity would not significantly affect the price in this market" that, while maybe hard to believe, would be an adequate commentary. If the report is being accurate in what it did (searched the market and interviewed market participants... brokers and agents) then the decision to conclude no contributory value is supported. Another might disagree but then it becomes a matter of opinion.
5. If you cannot read the report and understand exactly what it says (there is no shame in that; the appraisal report is written for a lender who has the wherewithal and competency to understand the report and all its terms, description-codes, etc.) then I would hire a local appraiser to read the report and explain to me what it really says.
6. If, once you understand how the report came to its conclusion (no contributory value) then you have a basis for submitting a reconsideration. How you structure the reconsideration is dependent on how the report analyzes the guest house.
My 2-cents.
Good luck!
