Posted: 7/30/2015 7:54:03 PM EDT
|
So my wife and I are trying to build a house. We started the process last march, have our builder, completed the plans, picked out a nice 4 acres of wooded land. We were originally supposed to close on the land in March, buy in cash, then use that plus more cash as down payment.
Problem 1, land realtor doesn't know his job, didn't start the soil sample process for the septic until March, which then took 2 more months. During this time we finished the building plans. So when the soil test came back good, we went to bank number 1 with all our stuff. Wait another month. Bank appraisal comes back 20% low. Bank says we have to cover the rest in cash, can't change the appraiser's mind. We can't cover 40% of the house cost in cash, so we go with bank number 2. Start another loan process. About know the realtor realizes that the county law says you can only split a parcel once, and has to do the rest of the parcel's soil tests before he can split our lot off. So far this has taken 3 months. Still waiting. I tell bank number 2 I want to talk to the appraiser to make sure it is done correctly. Meet at the lot, guy is completely lost, shows up in a beater, camo cargo pants and dirty shirt. Has no idea what engineered wood floors are, or what a geothermal heating system is. Has our plan printed on the back of his kids coloring book pages. He's also....slow, mentally. So I voice my concerns to the bank. "don't worry, he knows what number he has to get to." Today his appraisal comes back 15% under. Simply no comps in the local area, at all. Had to use houses completely different from ours. Talk to the bank, they say that we can use our original down payment amount since it was already almost 30%. But that doesn't help the fact that I will be underwater the day the house is finished. Still haven't gotten the soil test back on the lots that we are waiting for that aren't even ours. My concern now is getting the builder started before he has to build in the winter. Should we just wait until next spring? I'm worried about interest rates going up. TLDR: I don't know if this is a question, a rant, or a CSB, thoughts? |
|
Good Question, what state are you in? I assume you are not in the south. In northern state, winter is a real issue. Interest rates are expected to go back up, and a change in a point can cost you hundreds of dollars a month. Then again starting a loan right now, and then have to pay holding cost for 6 months is rough. My thoughts are to keep going. There maybe other issues and you don't want to get caught a new set of hurtles next year. I don't know who the current owner of the land is, but he has very little chance of selling in the winter. Just be upfront with him and tell him his land isn't appraising well. He may accommodate you with a six month contract or you can try to renegotiate the land sale (I know the loan is for both the house and the land). Good luck Bro, its a lot of work, but its generally worth it |
|
Quoted:
Good Question, what state are you in? I assume you are not in the south. In northern state, winter is a real issue. Interest rates are expected to go back up, and a change in a point can cost you hundreds of dollars a month. Then again starting a loan right now, and then have to pay holding cost for 6 months is rough. My thoughts are to keep going. There maybe other issues and you don't want to get caught a new set of hurtles next year. I don't know who the current owner of the land is, but he has very little chance of selling in the winter. Just be upfront with him and tell him his land isn't appraising well. He may accommodate you with a six month contract or you can try to renegotiate the land sale (I know the loan is for both the house and the land). Good luck Bro, its a lot of work, but its generally worth it We are well out of our contract, it was supposed to close in march, we never re-did it because we didn't really see the point. |