The appraiser added negligible value for the twelve-stall barn because barns have little value in a Fannie Mae appraisal. The appraiser valued the property at $215,000—$70,000 less than the sales price.
The home was off the market for over four weeks before the lender informed the seller of the appraisal issue. The borrower quickly reapplied at another mortgage company that had a program specifically for homes with acreage. The new mortgage lender processed the loan for two weeks before discovering the loan program had been canceled.
Ultimately, we were able to get the loan in front of an agricultural credit agency that approved the loan based on a different type of appraisal by an appraiser who gave value to the additional land and outbuildings.
Another appraisal issue that comes up happens because the appraiser is not local and does not know the market well enough, pulling what he or she thinks are comparable sales from an area that might sell at a lower price range. This is common when the appraiser is hired by an Internet company that doesn’t have local appraisers to work with.
The company may hire someone from the nearest metropolitan area who is unfamiliar with the local market. Settlements or close of escrow can also be held up because the appraiser selected is too busy to get the appraisal done in a timely fashion.