Hi, Thank you all for your thoughts. My takeaway is I have no reason to worry.
@shrubberyvaluation My initial thoughts were the same about my liability. Also, like you I am not a lawyer, nor an appraiser so I asked my question to see if my initial thoughts were correct.
@TerryRohrer I am also curious about what the value is of both properties. There is another vacant lot the same size as mine in the same subdivision, about 1/4 mile away, that is listed & on the market for 90 days at $210,000. 14 months ago two vacant lots about 3 miles away, the same size as mine and the other listed in the same subdivision, both sold for $160,000 each, per my Realtor. The listing of being unsold at $210,000 for 90 days yet two sales at $160,000 each give me confidence the vacant lot I just bought has a value of $160,000, and that if revised, my appraisal should come in with a higher value.
@Zoe I reviewed the closing docs and there are two separate settlement docs: one for the house and one for the vacant lot, with each doc referencing the appropriate separate legal description. There is a title fee on each separate settlement doc, while the house settlement doc also has a lenders title policy fee. I confirmed with the title company there are two separate title insurance policies. There is no mortgage on the $5 vacant lot as the mortgage is just for the house since the request for appraisal was only for the house. The issue is the Appraiser referenced the MLS listing and not the purchase agreement; the MLS listing stated the total combined acreage of both the house and vacant lot. The MLS listing did not state the total MLS listed acreage was a total of two separate deeded lots that the sellers required to be purchased simultaneously.
@Tom D You are correct in what the mortgage company told me. They had never heard of such an issue and they believe it is an Appraiser problem only so to just not worry about it, and to take a wait & see approach. Our mortgage broker just wanted to give me a heads-up in case I got a phone call or email from someone about this. However, worrying is second nature to me and having semi-solid plans in my head as to what actions to take when an issue arises helps lessen the worry.
@J Grant I am unsure how you interpreted my question as to me complaining. I hope to accomplish gaining knowledge and an understanding of any liability I may face for the Appraiser putting the total combined acreage of two separately deeded properties on his appraisal, relying upon the MLS listing instead of the purchase agreement to obtain the acreage. No, I do not want to back out of the deal and get my money back. Again, I am unsure how you came to that conclusion. You are correct: the Appraiser put the total acreage on the appraisal and now realizes the lot for the house alone is smaller, and that the site across the street makes up the rest of the acreage. Per our mortgage broker, the new mortgage loan only encumbers the house, not the vacant lot. I asked my mortgage broker if it was 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. Her reply was that she is not an appraiser but after 35 years in the mortgage business and reviewing hundreds of appraisers, it looked to her the five comps in our appraisal support our appraised value even if the acreage in our appraisal is reduced. What is interesting is the appraiser included in our appraisal one page of vacant land sales and current listings, which clearly show our vacant lot to be valued at a minimum of $160,000.
@CGinMN After reading the answers on this thread and doing further review on my own, I am leaning towards your opinion.
@Tim Hicks (Texas) The statement was to address the sellers desire to sell both properties simultaneously; nothing more, nothing less. They did not want to have two separate MLS listings, two separate sales, etc. They wanted a “one and done” transaction so yes they were sold together, but are deeded separately. The two Realtors worked together with the wording, the mortgage broker ran it by her companies underwriting department to ensure it was clear, and it was approved. It was explained to me to be similar to a contingency of a buyer having to sell their current house to buy, etc. “Action A has to occur before action B, the purchase, can occur”. There were two separate settlement docs and there are two separate title policies. The appraisal request was only for the house, not the vacant lot. You are correct about needing two separate appraisals, and this is what the mortgage broker told us also. However, the purchase agreement was written so that the entire asking price in the MLS listing was agreed upon for the house, with the vacant lot being sold for $5. The sellers agreed and we were all unsure the appraisal would support the agreed upon asking price. However, the appraisal value did support just the house. Everybody was happy at this point and therefore we moved forward & closed. The sellers sold both properties simultaneously for their combined asking price, we had an appraisal supporting the asking price for just the house, a mortgage for the house, and a vacant lot for $5. For some reason, late in the afternoon on the same day that both the buyers, and the sellers signed & closed and the mortgage company disbursed the funds, the Appraiser called our mortgage broker’s assistant to tell him of the discrepancy in the acreage on the appraisal. This concerned the mortgage broker assistant, who called his broker, who notified me, and started me worrying. My worrying is what prompted this post as I was hoping to gain enough knowledge to calm my nerves. I believe now there is no reason for me to worry.
