Incorrect Acreage on VA Appraisal

[uhoh2024]

Hi,

Can someone tell me what issues we as the buyers of a Montana property using a VA mortgage are facing? The appraiser called our mortgage company today and told them she had not realized the property was smaller than she initially believed.

Am I the buyer liable for anything?
Can the mortgage pull the mortgage back? Again, all funds are disbursed..we signed and closed.

The sellers and I both signed & closed early this morning. I believe we both had the first two appointments at the title company this morning. Our mortgage broker told us about mid-afternoon today that the loan has been funded and funds disbursed. Everything is done, we have the keys and we have started to move in.

We bought two separately deeded, contiguous properties, with one having the house and one being a vacant lot. The vacant land has road access and can be sold as its own buildable piece of property.

The appraiser had the purchase agreement for the house and it had a statement similar to this: “this property can’t be sold separately and must be sold and closed simultaneously with the contiguous property”. The purchase agreement was for the agreed upon asking price of both properties.

The mortgage company had the purchase agreements for both properties. I am unsure if the vacant lot purchase agreement was provided to the appraiser. However, the vacant lot was purchased for $5.00 because again the entire asking price was on the purchase agreement for the house. Since it was for $5.00 the mortgage company is not involved in that sale, other than both purchase agreements referenced each other as requirements for both properties to sell.

I believe the confusion arose from the fact the selling Realtor listed both properties in the MLS as one large property, even though they are two distinctly separate deeded properties in the County records.

Am I the buyer liable for anything?
Can the mortgage pull the mortgage back? Again, all funds are disbursed..we signed and closed.

My mortgage broker and Realtor have both said they have never heard of such a thing, and have no clue why the appraiser is doing this now, after everything is done.

Thank you.

 

[shrubberyvaluation]

Not a lawyer but the appraiser is probably just concerned with their liability. Funds are dispersed its over I believe for you, if there is an issue they would go after the appraiser. Not sure why you would be liable for someone else's mistake.

 

[TerryRohrer]

I have seen it before. They always appraise, regardless whether or not the appraiser knows what is included! Neither buyer nor seller has any liability. Sounds like you got what you intended to purchase. It does make you wonder what the properties might be worth.

 

[Zoe]

Your agreement is with the seller. The mortgage company is the appraiser's client. Tell your mortgage company that. You had to buy title insurance. You likely got a copy of the legal description on what you bought. The bank will have a mortgage on both properties. Your done. Move in.

If your title insurance legal description does not include both lots and your mortgage does not include both lots and your sales contract does not include both lots, you have a problem

 

[Zoe]

Your not liable for anything but the loan.

 

[Zoe]

I just realized you got a VA loan. VA will help you and you can call VA directly if you are concerned about anything. Just look at VA.gov and find your regional loan center with VA. They will help you being a veteran. Thank you for your service.

Here it is for montana:

https://www.benefits.VA.gov/fortharrison/

Just do internet search for VA regional loan center Montana. You'll get it.

You can call the appraiser too. You probably have a copy of the appraisal if you already closed.

 

[Tom D]

Ok, so what did the mortgage company say to you. Don't do anything yet, to wake any sleeping bear. This goes for anything in life. Likely, the appraiser has the problem, not you. Well, does VA make a lender take back a loan. Even so, the lender really has no issue with yous. They had everything in front of them, their error also. Don't talk to the appraiser, it was their mistake, as your attorney would tell you. As a matter of fact don't talk to anyone involved in the loan, nothing was of you doing anything wrong. Are you sure something is going to happen to you.

 

[J Grant]

Hi,

Can someone tell me what issues we as the buyers of a Montana property using a VA mortgage are facing? The appraiser called our mortgage company today and told them she had not realized the property was smaller than she initially believed.

Am I the buyer liable for anything?
Can the mortgage pull the mortgage back? Again, all funds are disbursed..we signed and closed.

The sellers and I both signed & closed early this morning. I believe we both had the first two appointments at the title company this morning. Our mortgage broker told us about mid-afternoon today that the loan has been funded and funds disbursed. Everything is done, we have the keys and we have started to move in.

We bought two separately deeded, contiguous properties, with one having the house and one being a vacant lot. The vacant land has road access and can be sold as its own buildable piece of property.

The appraiser had the purchase agreement for the house and it had a statement similar to this: “this property can’t be sold separately and must be sold and closed simultaneously with the contiguous property”. The purchase agreement was for the agreed upon asking price of both properties.

The mortgage company had the purchase agreements for both properties. I am unsure if the vacant lot purchase agreement was provided to the appraiser. However, the vacant lot was purchased for $5.00 because again the entire asking price was on the purchase agreement for the house. Since it was for $5.00 the mortgage company is not involved in that sale, other than both purchase agreements referenced each other as requirements for both properties to sell.

I believe the confusion arose from the fact the selling Realtor listed both properties in the MLS as one large property, even though they are two distinctly separate deeded properties in the County records.

Am I the buyer liable for anything?
Can the mortgage pull the mortgage back? Again, all funds are disbursed..we signed and closed.

My mortgage broker and Realtor have both said they have never heard of such a thing, and have no clue why the appraiser is doing this now, after everything is done.

Thank you.

You bought a vacant parcel of buildable land for $5.00, and you are complaining? What do you hope to accomplish? Do you want to get your money back and back out of the deal? Based on what? Some states have an X day right to rescind law. Otherwise, you can be letting yourself in for lawsuits, title challenges, and problems.

Idk the details so it is hard to comment. Perhaps the appraiser put the total acreage on the appraisal and now realizes the lot for the house alone is smaller, and tht the site across the street makes up the rest of the acreage.- FHA has a caveat for the appraisal -they UW a sale with two parcels, but the vacant lot ( excess land ) is not valued in the appraisal, perhaps. VA has the same requirement.

It sounds like the mortgage company UW the loan with a loan encumbering both parcels of land, and you would need permission to sell the second parcel as the loan might need to be paid off in an increment with the second parcel dropped from it - that is part of the loan I assume. It sounds like you have a valuable vacant site that you got for nothing and got it financed along with the house -how good is that?.. It is possible the appraiser overvalued the property by reporting the lot size as "bigger" on the appraisal when the primary lot the house was on was smaller in size - ?.

That is a potential problem for the appraiser if their report is reviewed -

 

[CGinMN]

The mortgage company will likely have to self report the issue to the VA, assuming they follow the rules. The VA may require some corrective measures, such as requiring the appraiser correct the report, then pay a penalty. Probably nothing will be done except for some wrist slapping. The VA, underwriter, and appraiser all share the blame for their error. As long as you keep paying, they will be happy.

 

[Tim Hicks (Texas)]

I have questions:

"this property can’t be sold separately and must be sold and closed simultaneously with the contiguous property”. The purchase agreement was for the agreed upon asking price of both properties."

This means both lots were part of the sales agreement. The appraisal should be for the entire property in the sales agreement. Are you saying that they are sold together, but deeded separately? If not deeded together, then the appraisal should be appraised separately, but that is not what the sales contract states. They were listed together, sold together, so they are actually one property based on the contract stipulation.