Early '22
So this past weekend I received our appraisal document. My lender emailed me saying "Wow, we appraised at $180,000!"
Initially, I totally believed it. The elevation/topographic changes is just not what one finds in the Southeast Michigan area. The woods are gorgeous and completely untouched. Additionally, the views are spectacular. At the time of appraisal, there were not leaves on the trees and you can see through to the lake and wetland views fairly easily. Lastly, it very much seems the cost of land is subjective. Yes, there are neighboring comps ran to collect data of the general range, however the land itself drives a particular price. Instead of appraising a house with more criteria and relationships to comps, land seems to be subjective with the value centered around the property's potential. At least that's how I consider the value.
Being that I was the buyer's agent on this transaction and I wanted to verify accuracy, I dug into the appraiser's report where it had a comment regarding a "20 acre parcel" and incorrect tax ID. What the?
To be clear, we initially wrote the offer against this tax ID with a disclaimer that it would be corrected upon the land reconfiguration we were doing. And we did just that. We re-split the property and submitted an addendum to revise the purchase agreement and title insurance, and then to kick off the lender's work and the appraisal. In short, we kicked off the appraisal once we had the new tax ID on purpose. Despite all the paperwork being in order, the appraiser still made a mistake.
Hey, I'm not one to harp on mistakes. But when it's delaying my transaction, I'd expect the correction to be expedited and free of charge.
I was disappointed the lender, however, encouraged me to sign the appraisal anyway, to not delay closing, and they would get it corrected. Is that a joke? That only hurts me. If the appraisal comes back after closing less than the sale price, then I just overpaid for the parcel. Why would I do that haha. So I politely refused.
Ultimately, the appraiser did correct it, and this time I worked directly with the appraiser instead of through the lender, to avoid any miscommunication.
It ended up coming back $5k over purchase price and we are able to move forward with closing.
In short, *TIP: If you are splitting a parcel or getting a new tax ID during your property transaction, provide extra care to ensure the appraiser understands the boundaries of the property to be evaluated, to avoid any delay in closing or worse: overpaying for your parcel!!
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