A developer building a $260 million luxury condo tower is looking to purchase a 3000 square foot parcel from the city of Boston. The developer hired an appraiser who valued the land at just $55,000, which seems low to say the least. As a result, the Boston Redevelopment Authority (a city agency) has hired their own appraiser to determine the price they should ask for the property. However, the BRA’s director was quoted thusly:
“If you had five reputable, professional, appraisers look at the same site, you’d come back with five values,” said BRA director Brian Golden. “We’re hoping that two data points help us come up with a fair price.”
Golden started by acknowledging that appraising is inexact, which is problematic, but true. However, he then essentially said “After hearing one amount, we’re paying an appraiser to get a second. Before they give it to us, I’m saying publicly that we hope the second is close to the first”. Why not just instruct the appraiser “Come in at 10% more than their appraiser did”?