FlyingJenny
Freshman Member
- Joined
- Jul 28, 2008
- Professional Status
- General Public
- State
- Florida
Please help me, because I really want to understand. I apologize in advance because this is going to be long.
We purchased 7.59 acres on North Merritt Island in Brevard County, Florida in January of 2006 for $125,000. At the time, all that was known about the land was that it was mostly wetlands, with two areas of uplands that comprised .73 of an acre and that improvements to the access road would be required in order to get a building permit. These were estimated at $30,000. The wetland delineation had been done by a professional environmental permitting company. It was their opinion that wetland permits could be obtained to be permitted to build one single family home on the property. Our appraisal came in at $130,000 with all of these factors known by the appraiser. The appraisal stated that the value had been adjusted for the mitigation of the wetlands and for the improvements to the county road that would be required. The adjustments when compared to two comps were $30,000 and $35,000. We did not have a problem with that.
Over the next two and a half years, a lot happened. We began and finished the process of wetland permitting, obtaining wetland permits from both the FDEP and the Army Corps of Engineers. That process took about a year and a half. In order to build our house, we would have to impact a portion of the wetlands, so the mitigation for that was that we dedicated 6.36 acres of our property as a conservation easement that is still ours, but we cannot build on. It was wetlands we couldn't build on anyway, and we are only zoned for one single family home, so it makes no difference. We still have plenty of land to build our house, a large workshop and whatever outbuildings we want. The uplands plus the acreage of wetlands we are permitted to impact come to .95 of an acre. Plus we have this wonderful buffer of natural land around us that guarantees our privacy forever.
At the same time we began working on the access road issue. This proved to be a much bigger problem, as the county requires a property to abut a county maintained road in order to get a building permit, or have access by easement or private road. Our access 'road' was actually a county right-of-way not maintained by them.
The normal solution was to enter into an unpaved road agreement with the county where we would pay all costs involved with engineering and building the road up to the county's unpaved road standards, and then we would turn it over to them and have the privilege of paying them a maintenance fee. We had anticipated this though, and set out to tackle it. After having the road engineered and the plans submitted to the county, it wasn't until the second review, when they received the comments from the St. Johns River Water Management District that it was determined to be impossible to buld the road on the 50 foot wide right of way. The road was required to be nearly two feet higher, and there was a maximum pitch that the drainage swales on either side could be no steeper than. The road, with its associated swales would have taken up 80 feet in width, and there were houses on either side that would have been adversely affected.
Most people probably would have given up at that point but I guess we are gluttons for punishment. We embarked in a battle that took many months and several appearances before the board of county commissioners in an attempt to obtain a waiver to the section of code that required our property to abut a county maintained road. No one had ever been granted one since that code was adopted in 1991. Believe it or not, we were successful. It cost us a lot in legal fees and heartache, but amazingly we actually got our waiver.
After all that fun we got kicked around some more by the county and the State Department of Environmental Health as they screwed us around repeatedly while getting our building and septic permits, respectively. That took several more months to accomplish.
While all of this was happening, the housing market took a dump (you probably noticed, huh?). Lenders started getting stingy about lending, as well, after getting burned on all those sub primes. We needed a mortgage where we didn't have to put much down, because we had spent over $70,000 during the preceding two years just holding the property and paying all of the expenses required to make it buildable. Our reserves were (are stlll) low. Fortunately, we have excellent credit- upper 700s to lower 800s. We should have been fine. But that was not the case. We got screwed around for months by lenders that approved us, but then found ways to endlessly delay closing. We think they had no money to lend, a fact that they couldn't really advertise. Our house project was appraised, and the land portion of it came in at $200,000 with all of the permitting in place. We were fine with that too.
We finally had to find another source for a mortgage. Our broker knocked himself out trying to make a deal for us, but his best sources for construction loans had dried up and he couldn't get responses from the new lenders he was dealing with. We parted ways with no hard feelings, but we had to try to get a mortgage. I located a credit union in the area that does construction loans. We applied and started the process with them and of course, another appraisal had to be ordered. The appraisal came back with the land portion valued at $250,000. Fine with us, no problem. We were moving towards closing, and then it happened. We got a call that the appraisal had been changed. It seems that the underwriter questioned the appraiser on whether or not he had accounted for the conservation easement. He had not, so he went in and slashed our land value from $250,000 to $100,000- less than we paid for it when it was not even known if it was buildable, and had access road issues. We were, and continue to be baffled by this. It is a real problem, because now the only way we can get the mortgage is if we bring a large amount of money to the table at closing. We have already spent over $100,000 between all of the permitting and road stuff and what we have down on the land, so we no longer have it to bring.
I understand that it is a difficult appraisal to do, and I think that is part of the problem. I have looked on the county property appraisers website for comparable sales and there just aren't any. There is only one sale of residential property larger than five acres in the whole zip code for the past two years, and that one didn't even change ownership, so I am not sure what went on there. You really can't compare wetland properties that are smaller than five acres, because due to the wetland laws, if impact is necessary, they do not contain enough land to be approved for on-site mitigation like ours was. The Army Corps of Engineers requires 'like kind' mitigation, meaning if the wetlands to be impacted are on Merritt Island, the mitigation must be on MI as well, and there are currently no mitigation banks on the island.
There is nothing available in the way of comps that even comes close to our property. The house style, the 600 square foot workshop, the large piece of land and the conservation easement make it truly unique. Of the comps that were used, none of them are on a piece of land near the size of ours, and one of them was on only .38 of an acre and the appraiser considered the land 'similar' and made no adjustment. They are only considering the amount of uplands we have, not the portion of wetlands that we are permitted to impact, even though we have provided copies of the permits to prove it. They say that they can't go by that, only an official survey. I provided the official county section maps, which clearly show the conservation easement and gives the figure of how much land it encompasses, but they won't go by that. Also, no value was added to our land due to the permitting we have acquired, which was a lengthy and expensive process. Wouldn't that be considered an improvement, since it is necessary to build?
The funny thing is, that I just noticed that the original appraisal when we purchased the land, the one that stated that the value had been adjusted for the mitigation of the wetlands and for the improvements to the county road that would be required, was signed by (as the review appraiser) the very same appraiser that did our current one, and then slashed the value.
The credit union had three other appraisers 'review' the appraisal, and none of them wanted to go out on a limb. That doesn't surprise me, though. Why would someone want to challenge that appraisal if they didn't have to. It is a sticky situation.
We have the option of getting a whole new appraisal from someone with no knowledge of how the previous one came out. Is it worth bothering with? Is it just going to come out the same? Please help me understand how the heck this works when the comparables aren't comparable at all.
Thanks for any insight.
We purchased 7.59 acres on North Merritt Island in Brevard County, Florida in January of 2006 for $125,000. At the time, all that was known about the land was that it was mostly wetlands, with two areas of uplands that comprised .73 of an acre and that improvements to the access road would be required in order to get a building permit. These were estimated at $30,000. The wetland delineation had been done by a professional environmental permitting company. It was their opinion that wetland permits could be obtained to be permitted to build one single family home on the property. Our appraisal came in at $130,000 with all of these factors known by the appraiser. The appraisal stated that the value had been adjusted for the mitigation of the wetlands and for the improvements to the county road that would be required. The adjustments when compared to two comps were $30,000 and $35,000. We did not have a problem with that.
Over the next two and a half years, a lot happened. We began and finished the process of wetland permitting, obtaining wetland permits from both the FDEP and the Army Corps of Engineers. That process took about a year and a half. In order to build our house, we would have to impact a portion of the wetlands, so the mitigation for that was that we dedicated 6.36 acres of our property as a conservation easement that is still ours, but we cannot build on. It was wetlands we couldn't build on anyway, and we are only zoned for one single family home, so it makes no difference. We still have plenty of land to build our house, a large workshop and whatever outbuildings we want. The uplands plus the acreage of wetlands we are permitted to impact come to .95 of an acre. Plus we have this wonderful buffer of natural land around us that guarantees our privacy forever.
At the same time we began working on the access road issue. This proved to be a much bigger problem, as the county requires a property to abut a county maintained road in order to get a building permit, or have access by easement or private road. Our access 'road' was actually a county right-of-way not maintained by them.
The normal solution was to enter into an unpaved road agreement with the county where we would pay all costs involved with engineering and building the road up to the county's unpaved road standards, and then we would turn it over to them and have the privilege of paying them a maintenance fee. We had anticipated this though, and set out to tackle it. After having the road engineered and the plans submitted to the county, it wasn't until the second review, when they received the comments from the St. Johns River Water Management District that it was determined to be impossible to buld the road on the 50 foot wide right of way. The road was required to be nearly two feet higher, and there was a maximum pitch that the drainage swales on either side could be no steeper than. The road, with its associated swales would have taken up 80 feet in width, and there were houses on either side that would have been adversely affected.
Most people probably would have given up at that point but I guess we are gluttons for punishment. We embarked in a battle that took many months and several appearances before the board of county commissioners in an attempt to obtain a waiver to the section of code that required our property to abut a county maintained road. No one had ever been granted one since that code was adopted in 1991. Believe it or not, we were successful. It cost us a lot in legal fees and heartache, but amazingly we actually got our waiver.
After all that fun we got kicked around some more by the county and the State Department of Environmental Health as they screwed us around repeatedly while getting our building and septic permits, respectively. That took several more months to accomplish.
While all of this was happening, the housing market took a dump (you probably noticed, huh?). Lenders started getting stingy about lending, as well, after getting burned on all those sub primes. We needed a mortgage where we didn't have to put much down, because we had spent over $70,000 during the preceding two years just holding the property and paying all of the expenses required to make it buildable. Our reserves were (are stlll) low. Fortunately, we have excellent credit- upper 700s to lower 800s. We should have been fine. But that was not the case. We got screwed around for months by lenders that approved us, but then found ways to endlessly delay closing. We think they had no money to lend, a fact that they couldn't really advertise. Our house project was appraised, and the land portion of it came in at $200,000 with all of the permitting in place. We were fine with that too.
We finally had to find another source for a mortgage. Our broker knocked himself out trying to make a deal for us, but his best sources for construction loans had dried up and he couldn't get responses from the new lenders he was dealing with. We parted ways with no hard feelings, but we had to try to get a mortgage. I located a credit union in the area that does construction loans. We applied and started the process with them and of course, another appraisal had to be ordered. The appraisal came back with the land portion valued at $250,000. Fine with us, no problem. We were moving towards closing, and then it happened. We got a call that the appraisal had been changed. It seems that the underwriter questioned the appraiser on whether or not he had accounted for the conservation easement. He had not, so he went in and slashed our land value from $250,000 to $100,000- less than we paid for it when it was not even known if it was buildable, and had access road issues. We were, and continue to be baffled by this. It is a real problem, because now the only way we can get the mortgage is if we bring a large amount of money to the table at closing. We have already spent over $100,000 between all of the permitting and road stuff and what we have down on the land, so we no longer have it to bring.
I understand that it is a difficult appraisal to do, and I think that is part of the problem. I have looked on the county property appraisers website for comparable sales and there just aren't any. There is only one sale of residential property larger than five acres in the whole zip code for the past two years, and that one didn't even change ownership, so I am not sure what went on there. You really can't compare wetland properties that are smaller than five acres, because due to the wetland laws, if impact is necessary, they do not contain enough land to be approved for on-site mitigation like ours was. The Army Corps of Engineers requires 'like kind' mitigation, meaning if the wetlands to be impacted are on Merritt Island, the mitigation must be on MI as well, and there are currently no mitigation banks on the island.
There is nothing available in the way of comps that even comes close to our property. The house style, the 600 square foot workshop, the large piece of land and the conservation easement make it truly unique. Of the comps that were used, none of them are on a piece of land near the size of ours, and one of them was on only .38 of an acre and the appraiser considered the land 'similar' and made no adjustment. They are only considering the amount of uplands we have, not the portion of wetlands that we are permitted to impact, even though we have provided copies of the permits to prove it. They say that they can't go by that, only an official survey. I provided the official county section maps, which clearly show the conservation easement and gives the figure of how much land it encompasses, but they won't go by that. Also, no value was added to our land due to the permitting we have acquired, which was a lengthy and expensive process. Wouldn't that be considered an improvement, since it is necessary to build?
The funny thing is, that I just noticed that the original appraisal when we purchased the land, the one that stated that the value had been adjusted for the mitigation of the wetlands and for the improvements to the county road that would be required, was signed by (as the review appraiser) the very same appraiser that did our current one, and then slashed the value.
The credit union had three other appraisers 'review' the appraisal, and none of them wanted to go out on a limb. That doesn't surprise me, though. Why would someone want to challenge that appraisal if they didn't have to. It is a sticky situation.
We have the option of getting a whole new appraisal from someone with no knowledge of how the previous one came out. Is it worth bothering with? Is it just going to come out the same? Please help me understand how the heck this works when the comparables aren't comparable at all.
Thanks for any insight.
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