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Vacant Land: Make Sure You are Appraising the Right Property

Imagine that you have accepted an assignment to appraise 15 acres of vacant land located in a remote area.

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You have been given several pieces of information such as an address, a plat map, a legal description, and a survey. As you make your way to what you believe is the correct location, doubts start to creep in. Are you absolutely certain that you have arrived at the right place? As far as your eyes can see, there is nothing but empty land stretching for miles. Occasionally, you spot a few scattered outbuildings and broken fences, but not much else.

Based on the information provided, you know that the property you are appraising can be accessed via the road you drove on. Additionally, the information states that there is electricity supplied to the property, which aligns with the presence of what appear to be power poles in the vicinity. It is crucial to avoid making assumptions in this situation. You should not simply assume that you are in the correct location, nor should you blindly trust that all the information provided to you is accurate.

There have been multiple instances where appraisers faced claims due to the costly mistake of making assumptions and later discovering that they appraised the wrong property. In most cases, it turned out that the appraiser was in the general vicinity of the intended parcel. One noteworthy incident involved an appraiser who mistakenly appraised the parcel located across the street from the designated property. Although this situation was somewhat embarrassing for the appraiser, we were able to argue that the value of both parcels was similar, resulting in minimal damages. However, not everyone is fortunate enough to have such a favorable outcome.

Another appraiser encountered a similar situation where they mistakenly assumed they were in the correct location. The appraiser's reasoning was based on the fact that the road they followed led to a dead end, leading them to believe it must be the intended property. It never crossed their mind that the property they were assigned to appraise might have an access issue. Moreover, the presence of fencing and some boulders further reinforced the appraiser's belief that this was a property of importance and care. However, it turned out that the property they came across was not the one they were supposed to appraise. While the owner of that property might have held a deep attachment to it, it was not the property under evaluation.

In fact, the parcel the appraiser was supposed to appraise was actually situated at least half a mile away from the road. There was no paved access available for entry or exit. A substantial drainage ditch ran through a portion of the property, and the closest utility connections were located miles away, necessitating the acquisition of easements over several adjacent parcels. The disparity in value between the appraised property and the correct property was significant.

The valuable lesson to be learned from this experience is quite straightforward. When tasked with appraising vacant land, it is imperative for the appraiser to ensure that they are evaluating the correct parcel of property. Roads do not always lead to the intended address, and fences are not always indicative of legal boundaries. What may initially seem right can ultimately prove to be very wrong.

There is no need to feel embarrassed or hesitant to admit uncertainty. Consider reaching out to the borrower or property manager to accompany you to the site and verify the boundaries. Request photographs that contain identifying markers to aid in identification. Inquire if the client or lender possesses any additional information that can assist in pinpointing the exact parcel for appraisal.

At the end of the day, if you still are not sure, think long and hard about whether you want to take the chance that you might be wrong. Appraising the wrong property could be a costly mistake. ◆