Rural property appraisals

dmccarty · Aug 10, 2005

Bill, Redfox,

I forgot to mention the Farm Bureau. The NC Farm Bureau had good rates for land. I did not get my loan through them since I did not know about them when I purchased the property. I did just try to do a refi on the land with them which did not work with what I was trying to do.

BUT, what I did learn is that they would have done the loan on the land if I had intended to build a house. But, since I had just built a house they would/could not do the refi. Did not really make sense to me but they should be able to help you out.

Later,
Dan

gsxr1100 · Aug 10, 2005

My mortgage people where about 20K off (too low) from last year then what I could get for it. Since then, prices are every higher, about 15 to 18K more. Insurance people still see the original purchase price and not today’s ever- changing selling price. They can’t base the insurance on it since they would be overwhelmed with thousands of homes. They do not have the man power. It is the owner to change his policy to up it to the market value.

But then again my City is so far whacked out it is not funny. The tax person basically picks number out her head sine “Every house different” as she said in court. I can show you on my very same road with a bigger homes and more land, but I pay more in taxes. The values are all messed up.

We get re-assessed every 2 to 5 years.

Yes "Assessed" value is what's on the tax books.

“Appraised” is what banks “thinks” is it worth and most times is too low. Around here you get what the banks thinks it is worth, add in your profit and 100 to 1 people will pay MORE for the house then what you ask.

My house is about double what the city assessment was and about 35 to 40K more then what the bank thinks due demand in this stupid city. But I could sell it for even more.

8NTX · Aug 10, 2005

( I have a contract on a 70-acre rural property. Most of it is grass pasture. There are 3 out buildings, one of which is an old bank barn. Overall it’s a fairly nice property. Everything was smooth until the bank appraisal came back. They could only find one similar sized property that closed in the past year, and the remainder of the properties were 5 and 10 acre properties. Since the land is non-divisible, they valued the land at a very low cost per acre. Thus, there was a huge difference between the selling price and the appraisal. Thus, there is no loan unless I kick in a huge amount of cash. Have other folks had trouble acquiring financing for large rural properties? Are there specialized rural property appraisers? Ultimately it is up to me to decide if the appraisal is way low, or the property is way over priced, but the risk involved with the situation is very high. /forums/images/graemlins/confused.gif
Has anyone been in a similar situation from either the buyer's or seller's point of view? )

I am a real estate appraiser (22 years), and real estate tax consultant (14 years). My advice is to:

1) make sure your lender is familiar with your area;
2) ask to talk to the appraiser who will be appraising the property, and try to find out if he/she is familiar with your area;
3) check into local assessed values and ask the appraisers at the local appraisal district or taxing authorities about the comparables they used to derive their values;
4) talk to local realtors / brokers about property values in your area.

You have been given lots of advice and opinions here. Each state has essentially different sets of rules regarding assessed values vs. appraised values, etc. Some "assessed values" reflect ag values, or the property is given an ag exemption resulting in lower taxes.

You must have based your decision to purchase the property on something. Did you research values, sales prices, etc. before you made your decision? Do some homework, and maybe you can determine whether or not the appraisals are right, or you were wrong. Good luck, and feel free to PM me if you have any questions.

BB_TX · Aug 10, 2005

If I bought a piece of property 10 years ago for $100K and did no improvements and there was no re-assessment, it stays at $100K. 
Where my land is, it is re-assessed, re-appraised, or whatever, every 2-3 yrs. I bought mine in '99 and the county appraisal district has increased its value 4 times to almost double the '99 value even though I have not built on it. I checked surrounding properties and they all had been increased at about the same rate and on the same schedule. Tax guy said they are re-valued on recent nearby property sales. And unfortunately people are buying up small acreages as fast as they come on the market at whatever price the owner asks. I have an ag exemption as all my land is currently used for pasture/hay so my taxes are not affected that much. But if anything should change, the taxable value could be a burden.

bczoom · Aug 10, 2005

( Where my land is, it is re-assessed, re-appraised, or whatever, every 2-3 yrs. )

I think a lot of places won't go through the steps of re-assessment since they have to do everyone's place to make it valid. Around here, they just increase the millage (percentage).

BB_TX · Aug 10, 2005

That may be what they do here. All the surrounding properties I checked on had similar increases percentage wise each year that mine did. However, when I protested mine, they began quoting recent sales in the area justifying the increase of assessed value.

bczoom · Aug 10, 2005

( However, when I protested mine, they began quoting recent sales in the area justifying the increase of assessed value. )

They'll can/will find "justification" by some form or another.

tommu56 · Aug 11, 2005

I had to have my cabin property appraized (to by out bil)
the guy coulden't understand how any one could have a hunting cabin with out electric or plumbing. I figured he must do more card playing and drinking than huntin. I didnt even want to explain that the frig ran on propane At least he had SUV to drive the 7 miles on dirt roads to get there. (probibly the first time off the pavement) he had trouble finding same type property for apraisel but still took my check!!

Redfox · Aug 11, 2005

I spoke to the appaiser. He told me that he had to do a 'residential' appraisal according to the banks underwriting rules. Thus, 'excess land' counted zip. The barn could only be appraised for its value as 'residential' storage, not its true value. So he adjusted $3000. The 50x30 heated workshop had 'no residential use' and added nothing to the appraised value. /forums/images/graemlins/shocked.gif

8NTX · Aug 11, 2005

( I spoke to the appaiser. He told me that he had to do a 'residential' appraisal according to the banks underwriting rules. Thus, 'excess land' counted zip. The barn could only be appraised for its value as 'residential' storage, not its true value. So he adjusted $3000. The 50x30 heated workshop had 'no residential use' and added nothing to the appraised value. /forums/images/graemlins/shocked.gif )

The day an appraiser is forced into doing appraisals "according to the bank's underwriting rules" is the day he becomes something than a disinterested third party. Which he MUST be at all times. To say that the 50x30 heated workshop has no residential use doesn't make sense. Something definitely is not right here. I think it may be time for a new lender, if you really want to pursue this deal.