A word to the wise:
Marion T. Jones, a director of the brokerage firm Eastern Consolidated, said a recent appraisal of a development site in New York City overstated the buildable area of the 100,000-square-foot site by as much as 40 percent. “As a result, the entire capitalization of the deal — including the acquisition price and the bank loan — was wrong,” Jones said.
When the developer realized the mistake, he stopped paying the debt, forcing the bank to foreclose. “The entire deal was derailed by this one bad appraisal, and now the lender is stuck with a site that they never intended to own,” said Jones….