“World's Most Complete Neighborpedia”
Sponsor a Community — What is Localism? | Register or Sign In
Explore:   What's happening in your neck of the woods?
Home Appraisal REO Bank Owned Vacant Land Flori...

Appraisal REO Bank Owned Vacant Land Florida Keys

Appraisal REO Bank Owned Vacant Land Florida Keys

Fresh Key West Lobster While in Stock sign


The bank must price according to the appraisal. An inaccurate appraisal throws a broomstick in our bicycle tire.



The Monroe county Comprehensive Land Use Plan is complicated. I explain the building process and Land Use Plan to an Asset Manager. Sometimes an asset manager will hire a land use consultant. The detailed report will reveal the obstacles, potential issues and valuation difficulties associated with vacant land.



An Asset Manager should send a request to the appraiser to contact the listing agent to be certain that they receive an accurate appraisal. Not all appraisers understand the significance of a lot being designated as Tier I as opposed to Tier III. Some Realtors don't either.



The 'Comp Plan' has been in existence for more than 2 decades, yet Realtors and appraisers still struggle with the intricacies in the plan. If the Asset Manager puts a note on the appraisal order to call the listing agent prior to preparing the appraisal an appraiser may consider:




Tier status


Active or expired building permits

Rate of Growth Ordinance (ROGO) system


The Federal Emergency Management Agency (FEMA) list.


The lengthy building permit process


ROGO applicants


Flood zone




An Asset Manager is more likely to receive an accurate appraisal rather than a useless stack of papers that cost $450. An inaccurate appraisal does nothing more than insure that the asset is reassigned to a new REO agent in a few months. Or the asset is eventually price reduced to market rate.



A land owner must obtain 30 points and get to the top of the waiting list which could mean that a land owner must obtain 34 or 35 points to receive a building permit. Tier I lots outside of Big Pine Key have 10 points. Tier III lots have 30 points.



A land owner must purchase lots and donate them to Monroe county to acquire the additional points. Lots that qualify for land dedication to Monroe county may have .5 a point, 1 point, 2 points or 4 points.


A lot that can be dedicated to Monroe county 4 points can be purchased for approximately $6,500. A land owner with a Tier 1 lot would need to purchase 5 4 point lots to get to the minimum 30 point value that is required to apply for a building permit. A 6th lot, or 4 years on the waiting list accumulating Perserverance Points, would be required to accumulate the remaining 4 points to acquire 34 points and get to the top of the eligibility list to qualify for a building permit.


If a Tier I land owner buys 5 lots at $6,500 each that would total an additional investment of $32,500 plus 4 years on the waiting list. Or the land owner could purchase and dedicate 6 lots at $6,500 for $39,000 if they can find the lots to buy. The least expensive lot on the market (Sept 20, 2011) is almost $25,000. It may take time for the land owner to find 4 sellers willing to accept $6,500 for a 4 point lot. The land owner could invest $13,500 or more per lot for 4 point lots. This would significantly increase the cost to obtain a building permit.



If a parcel of land is on the Federal Emergency Management Agency (FEMA) list it does not qualify for flood insurance. Flood insurance is required to obtain a mortgage. A cash buyer will be needed. A cash buyer requirement reduces the pool of potential buyers.



If a parcel of land is in a V flood zone the lot will be subject to a 4 point deduction.

A maximum of 3 Tier I applicants may receive a building permit in Monroe county annually.


If a lot is designated Tier I, has an expired building permit and it would take a few years to obtain a building permit as well as an investment of $32,500 or more to purchase and dedicate (donate) lots to Monroe county to accumulate the number of points required to receive a building permit, that should have an impact on the appraisal valuation. But it doesn't always.



If the appraisal is higher than excepted, ask the Asset Manager for a copy of the appraisal. Check the Tier designation and sold dates of the comparables (comps) that were used. The appraiser might not understand the Comprehensive Land Use Plan.



Value in an appraisal is based upon the current condition not potential value 4 years from now or after a substantial investment of time and capital. Highest and best use is not the benchmark. If a lot is not buildable in the current condition it can not be compared to buildable lots. A Tier I lot is not comparable to a Tier III lot. Potential value 4 years from now and requires additional investment now should not be considered by an appraiser.



Typically an appraiser will provide, or be asked by the bank to provide, comps that have been sold within 90 days and within a specified area of the subject property. This is not always possible. If an Asset Manager receives an inaccurate appraisal the listing agent should determine the Tier designation and sold dates of the comps that were used in the appraisal. I have seen appraisals with comps that were nearly 3 years old in a recent vacant land appraisals.



An Asset Manager may send a request for a corrected appraisal directly to the appraiser through the company that the Asset Manager used to order the appraisal. The appraiser should want to make things right. An appraisal that has old comps and or lots that are do not have a comparable Tier designation the appraisal is clearly inaccurate.



The banks guidelines or an appraisal freeze may restrict an asset manager from purchasing a new appraisal. The Asset Manager should not be required to purchase a new appraisal if the appraiser has delivered an inaccurate appraisal. If the Asset Manager is not permitted to purchase a corrected appraisal and the appraiser refuses to correct the inaccurate appraisal at no cost the I volunteer to pay for the new appraisal. I'm in business to get the job done for the Asset Manager. I can't do my job if the asset is not priced accurately.

No one will will buy a Tier I lot and invest an additional $32,500 to $38,000 purchasing and dedicating (donating) lots to Monroe county, AND invest 2 to 4 years so they can acquire Perserverance Points, to make a lot buildable when a buyer can purchase a canal front buildable lot for less money and save a couple of years of work and aggravation.


If the property is priced at twice market value it will not sell. It's a waste of time and money for the bank and for the listing agent. Asset Managers and listing agents have monthly reports that we must file. We invest time with market rate offers that are 1/2 of the appraisal and list price. The bank is not permitted to accept an offer that is 1/2 of the appraised value. The bank can only accept an offer within the acceptable range of the appraisal.



After 3 months the listing will be stale. The bank will get offers even lower than market rate once the asset is price adjusted to market value. The bank looses money when the asset is not accurately priced the day it goes on the market. Holding the asset costs money. The inaccurate appraisal forces the asset manager to purchase another appraisal when we all know that the current appraisal is not accurate.



The problems caused by an appraisal at twice market rate are extensive and far reaching for everyone involved. We are all evaluated by our performance. Assets that sit on the market due to inaccurate pricing make us all look bad.

Posted Tuesday Sep 20