Lot Size

[DB]

Variances in lot sizes are pretty common (therefore the use of the ± in the descriptions). I personally owned a farm that was taxed and platted as 28 acres± .... When I had it surveyed, it came in at just over 40 acres ... Now... granted, we are talking about a basic "lot" that may be slightly larger than other lots in the defined NH, but is this difference significant? A variance of 11%, if the appraiser WASN'T provided the survey, is nothing to bark about and isn't likely to make a $17K difference .... but if the appraiser had this info and ignored it .. then what else did he ignore? Why didn't he use the info given? Why didn't he exercise his due diligence to determine and further, prove whether this variance made any difference in the value opinion .... a lot of blanks that need to be filled here ... so the standard, appaiser response is applicable: It depends .....

Did the realtor order the appraisal? Why wasn't it ordered by the lender?? Was this a private appraisal? If so, the appraiser should be able to discuss it with you. If the lender ordered it, then of course, the appraiser can not discuss it with you, per the confidentiality rule of USPAP. Is this appraisal for a purchase? A refi? To determine a selling price? For personal reference? What was it's purpose and scope?

It's hard to judge another appraisers work without being familiar with the area and without knowing the particular market. If you could tell us where you are, it might be that someone here could give you a little better idea of what is going on. It might also be in order to request a review of the appraisal, if it was done for a lender.

Help us, help you. Good luck!!

 

[Bill_FL]

It seems that neither of the last two appraisers measured the property or the platt map for consideration and we don't understand why when they have been made aware of the issues surrounding the tax records.

You do understand that an appraiser does not measure the land? A surveyor does that.

Is this creek area a flood zone? You do not give your location, but many areas now have very restrictive regulations about land that borders creeks, rivers, lakes, etc. Especially in watershed areas.

My real concern here is that 3 appraisals have been done and you are shopping for a fourth. At what point do you decide that you have a "good" appraisal? When you finally get one that agrees with you?

 

[Wes Stewart]

At this point we have quit arguing. We signed the contract according to third appraisal. The property is in Clearwater, FL. The creek bank is steep and we are not in a flood zone and do not need flood insurance. The first appraisal was done by us, the second by the buyers lender, and the third was split between the two due to the difference between the first two. However, the buyers agent put in the order under his mortgage companies name (we don't feel this is right) so because of that the appraiser will not talk directly with us. All we can get is through our agent who is claiming that the third appraiser is claiming that he had to use tax records for the lot size due to the Fannie Mae guidelines. The third appraiser was provided with the information about the difference in lot sizes prior to the appraisal and I was informed by the realtor that the appraiser was also provided with the survey. We are feeling poorly represented in this transaction but are done with the arguing. The reason for the $17,000 increase of the first appraisal was not only because the lot size was more accurate but due to that there were more accurate comps used like the property directly behind our house with the same lot size but without the creek and with 300 sq ft more which sold in May 2005 for $413,000. Thanks for all of your insight into this situation. I wish we could have had an explanation from the appraiser. If we had a decent explanation we would have felt that we had a fair appraisal and that is what we were looking for out of all of this.

 

[DH Wilson]

What does your deed say and is the total area surveyed covered by more than one deed. I would say the deed trumps tax records. I dont think I have heard any one mention this yet. I would only appraise whats on the deed for a refi xaction unless it was known that multiple properties were being financed. And then it would be a SFR and a seperate land appraisal. And if the disputed piece is in the creek area then the wetlands could devalue the property. Theres alot of "depends and what ifs" here

 

[Ms. Janet]

Originally posted by Wes Stewart@Dec 16 2005, 08:38 AM
However, the buyers agent put in the order under his mortgage companies name (we don't feel this is right) so because of that the appraiser will not talk directly with us.

Read this Wes, and you may understand why the appraisers will not talk to you.

http://appraisersforum.com/forum/index.php?showtopic=34977

 

[Wes Stewart]

Janet, I assure you that we are not value hunting. If the value came out the same but the lot size was what we felt accurate than we wouldn't question it. I understand that the appraisers won't talk to a non client party, however, I was a client in the third party appraisal. The buyer's agent put the order under his mortgage company's name (not the lender for the buyers themselves) making the buyer's agent's company considered to be the client. We were not told that the buyer's agent would register the order under that name or we would have asked that the appraisal be put under the buyer's name and our name since we were the ones paying for the information. Once again, its not the value that we are distraught with its the accuracy of the appraisal. Yes, we feel that we would have an increase in the appraisal had the information used was more accurate. If the appraiser could have provided an adequate explanation for why he left out so much of the property than we would have accepted that without argue but as you have seen in the previous posts he was unable to provided us (through our realtor) with an acceptable explanation (it has been pointed out in the previous posts that there are no such rules using Fannie Mae guidelines that left him obligated to use the lot size as listed by the tax records). Which brings us back to speaking directly with the appraiser to hear the explanation from the appraiser himself.

 

[Ms. Janet]

Wes,

The link is not about value hunting. The link is to explain to you why the appraiser cannot talk to you.

I understand your frustration when you are trying to negotiate a contract. And I am glad that you finally were able to come to an agreement.

But, as appraisers, we are bound in confidentiality to our client.

This link may help also.

http://www.FDIC.gov/news/news/financial/2003/fil0384a.html

 

[hastalavista]

Wes-

I want to thank you for sharing the information with us. It is good (for me) to hear the perspective of a homeowner in a situation like this.

If I was in your shoes, I too would feel dissatisfied about the outcome. I read your concern not so much as “my house was undervalued” as “I just want to see the value of the house as it is accurately configured”.

If all three appraisals had the accurate lot size, and the difference was $17k, I believe you would hear from most of us that the difference ($17k), while representing “real money” to you, might be an acceptable difference of opinion amongst professional appraisers. It is hard to judge the accuracy of a valuation when a fundamental consideration such as lot size is not accurately reconciled. And I take it as that being your point. The first appraisal, which had the accurate lot size, happened to come in at the highest value. The other two appraisals, which had the inaccurate lot size, came in at lower values. It would be reasonable for anyone to ask if the difference in valuation was related to the difference in lot sizes as reconciled.

When it comes to valuation, we say, “It is what it is”. In other words, as appraisers, we get questioned (which isn’t necessarily a bad thing), pressured (which is a bad thing) and threatened (which is a very bad thing) because a value didn’t arrive at someone’s preconceived notion; the retort is “the value is what it is, we don’t make it up, we interpret the market and form an opinion as to what the typical buyer would pay”. This response is better made when the report accurately represents the property. In your specific case, the difference in lot size may or may not have influenced the other reports to arrive at a different value. In almost all reports (certainly mine), the likelihood of some inaccuracies being present is high, as we are human. Hopefully, these inaccuracies are not significant to the value analysis (the value of your home in my market won’t be significantly different if you have two fireplaces, and I counted one). The unfortunate reality in your case is that while the difference in lot size may not have mattered, you are left unsatisfied in knowing if that is the case or not.

The above is just my personal opinion, and others may differ. Good luck to you and I hope you will be satisfied with the quality of your next appraisal transaction!


(edit- fixed spelling error!)

 

[Jim Lusk]

I'd like to add one more thing that might be relevent. When it comes to buying or selling property an appraisal does NOT set the selling price. For many reasons the selling price may be above or below the appraised value. It almost sounds like there was an agreement to sell for the appraised value (or am I missing something). If there is an agreement on a purchase price and the apraisal comes in lower, all it means is a larger down payment (my in-laws had to this once, and that appraisal in the 1980s was seriously flawed - comps were not comparable in anything but size) and my parents once bought a house that appraised for $29,000 more than they paid.

 

[Wes Stewart]

Yes, we agree, Jim. We had a contract of $361,500 but when the buyers appraisal came in so much lower they were not content to pay a price above their appraisal value even though they were putting down enough money that the lender was still willing to lend them the loan for the contract price. Which is where the third appraisal came into play. We appreciate all the professional advice and insight you all have provided. It is good to hear the thoughts on this situation from an appraiser's point of view.