Wes, most of the posters here have given you good and reliable advice. Of course, now you may know a lot more about the complexities of real estate appraisal than you really wanted to...
There are two things that stand out in my mind here. The first is that the appraiser apparently had a survey and refused to use it... incorrect methodology in my opinion. Additionally, the appraiser misquoted Fannie guidelines, which require an accurate determination of site size, but definitely do not require a specific source, such as the tax record. Whether this error on the part of the appraiser resulted in an incorrect or misleading value conclusion is something we on the Forum cannot know without a full review of the appraisal.
So, in relation to the first issue, the appraiser was apparently wrong. Whether that error is significant enough for you to turn it in to the state appraisal board is another question I cannot answer without more facts.
The second issue, which no one here seemed to jump on was whether there was additional developable land. Several people mentioned, correctly, that a larger site size does not necessarly have much impact on value. To reconcile this in your own mind, consider a property with a larger than typical site put on the market. Now assume that half of the participants in the market like a large lot... however, the other half of the participants in that particular market are elderly people or others, who, for whatever reason, want a small lot with less mowing. What is the effect from the market on value? Minimal at best in a scenario like that .
However, you mentioned additional land that could be developed. In such a case, a property often has excess site value. In other words, going back to the example above, the half of the people who want a small site could split the additional land off and sell it. Because you did not give enough information, we cannot actually know whether a split would be legally allowable, and if so, whether it would be practical and possible. But, if it is, then it should have properly been included as excess land value in the appraisal.
If that is really the case, then the appraiser may have made a significant error, which resulted in a misleading report and an incorrect value conclusion. The Uniform Standards of Professional Appraisal Practice, what we call USPAP, says, in Standard 1-1 ( b ) that the appraiser must:
"not commit a substantial error of omission or commission that significantly affects an appraisal"
and in 1-1 ( c ) that an appraiser must:
"not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results."
I believe it is significant that these are the second and third statements in the
first standard that appraisers must follow.
As I said before, we really don't have enough information to judge the appraisal you have called into question. But, we do have two facts that are important. The appraiser made an error and the appraiser misquoted regulations to try and cover the error.
If you have a copy of the appraisal, you could take a complaint to the state board that regulates appraisers. Whether to do that will be something you have to decide for yourself. However, be aware, if you do, that the board is not likely to be concerned with your complaint that the value was wrong, but rather will look to whether the appraiser violated one of the rules above or some other portion of USPAP or state regulations. In other words, filing a complaint is a rather technical matter.
I wish you well and hope that this experience has not soured you on appraisers or appraisal. It is important to remember that what you get when you pay for an appraisal is an opinion. It is not actually all that unusual for two different appraisers to look at the same data and come up with slightly different opinions. However, they should be competent, and it is at least possible, from the information given, that the appraiser who refuse the survey information was not.
