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Josh Deel
  • Roanoke, VA
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What Would You Do? Appraisal Gone Wrong...

Josh Deel
  • Roanoke, VA
Posted Jan 9 2018, 20:10

Hi all- so here’s the short end of it... I have a 100+ acre farm in Virginia. I bought it in 2013 as just raw land for a little over $305k. Since that time I’ve put nearly another $200k into it in the form of infrastructure and a 2000 sq ft house (doing nearly all the work myself).

In the past couple weeks I began the process of doing a cash out refi with a local bank to pay off an owner finance note I have on the property and to put an additional $30-40k in landscaping, a barn, and a few other items like front porch decking.

I was hoping the new appraisal would reflect everything I’ve been doing so that I not only have money to do the above, but also in the near future serve as available equity to use as a major down payment on a 16-20 unit apartment building. Heck, the new tax assessment we received for 2018 puts our property over $450k.

Unfortunately the appraisal came in today at just over $330k. To be honest, I’m crushed. This was largely driven by the fact that a neighbor recently passed away and the heirs to his estate did a fire sale of his home and land which totaled very similar in size to mine. This property sold for *surprise*surprise* just over $330k. And it’s a very old and dated house.

I don’t know what to do. Should I proceed with the cash out refi, make the improvements, and then get a non local bank to appraise it to see if the value is changed? I’m thinking non local in the hopes they’ll just pull numbers on comparable properties that size where they’re from and not this dang fire sale situation.  Oh, did I mention the appraiser also owns a local real estate company and sits on the board of the bank I'm trying to do this refi through?  Should I be concerned?  Is that even legal?

Any input would be appreciated!!!! Thanks in advance.

Best,

Josh

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