The Hits Keep Coming – UPDATED

I know a lot of you have been wondering if we have any updates.  It’s been a difficult week on many levels – mostly personal and not related to the house.  We had been waiting on the second appraisal and finally got it Tuesday.  I quickly skimmed the file for “the number” and my jaw hit the desk when I found it.  It was almost 20% too low.  This one was worse than the first one and this is despite us giving up the idea of having an ICF house.   This appraisal was also almost 20% less than the first one which was also too low.  Is it sad that this is almost becoming comical to me?  Really???  The first appraisal is actually pretty close to the new budget so going back to the first bank may be an option.  (The second bank can’t use the first appraisal since it was written for a different bank – government rules, of course).  We have concerns about when the downpayment may be due with the first bank, so we are inclined to stay with the second one, if we can make it work.

One issue with the second appraisal is that she used a lower square footage number than the first appraisal.  Our plan has been to leave the bedroom over the garage, it’s bathroom and the media room unfinished for now to save costs.  Those 3 rooms add up to almost 1000 square feet though (not to mention adding an additional bed and bath to the spec list).  The first appraiser used the square footage number that includes those rooms despite them not being finished.  He did not count them in the bed/bath numbers though.  The second appraiser did not figure them in at all.

We had contemplated finishing those rooms on our own, outside of the loan, so that we would be able to count the additional square footage.  I asked the bank about this.  He said we would need to come up with a detailed budget for those rooms.  He said we may have to pay for another full appraisal since it would change so much, but he was going to check with the appraiser.  He wanted to see if she would give him an idea of whether it will get the number high enough before we pay her more money to write up a new report.  We’re still waiting to hear back on that.  I wrote up a separate budget for those rooms on Wednesday and emailed it to them.  I basically copied the builder’s budget for the rest of the house, deleted the majority of it that wasn’t relevant and adjusted the numbers for that area and what we would need.

So, that’s where we are.  I just emailed the bank again hoping we can find out about the possible new appraisal today before the weekend.  We are really down to our last option now.  If we can’t get this next appraisal number to work, I’m afraid we’ll be done.  We could save up more money in the next 6-12 months, but I’m afraid construction costs and interest rates will continue to rise to a point where we still won’t be able to make it work.  There’s no telling where the real estate market might be by then and what it would appraise for at that point.  We could try to find a smaller, simpler plan, but I’m afraid we’ll still have the same problem since the comps will always be lower than what we can build it for.  Meanwhile, we sold our house, have been living in a rental for a year (just signed a 9 month extension) and have 4 acres that are paid for and may end up being useless.

*UPDATED 7/12/13 – The appraiser won’t give the bank an estimate of what the house might appraise for with the additional square footage, but she will redo the appraisal with the larger size for an extra $100.  We’ve given them the ok to do that, so we’ll be waiting now for her revised appraisal.*

Also from this week: