Month: April 2008

So just when everything is moving nicely on our home… I get a copy of the appraisal this morning, $268k! That is $17k less than our offer price, and $2k less than the couple living there for 4 years paid for the house! Now I realize that home prices in this area are flat, but they have not gone down, and for at least the first 2 years the home value should have gone up. Not to mention they finished the basement, adding a bedroom and another full bath.

So I start looking at the appraisal closely. 2 of the comps seem pretty fair, 1 seems totally bogus, a much older, smaller, ugly home on the wrong side of main street. Then I read further. The appraiser listed the home as a 3 bedroom 2 bath. It isn’t, it’s a 4 bedroom 3 full bath home. She only included the upstairs in the square footage measurements, even took a lot of pictures, but none downstairs. Did she even go down there? There is no downstairs living-area square footage included in the appraisal, even though there is over 1000 square feet of beautifully finished living area.

The appraisers name is Lynette Richter with Landsafe Appraisals. According to our lender, our only recourse is to have the real estate agent (who is also a licensed appraiser), contact her with a dispute showing better comps and try to get her to alter the appraisal. That, or we can come up with the difference between the offer price and $268k between now and closing. We are not going to be able to do that. The seller could lower the price, but I don’t see that happening. We are probably out $350 and a lot of plans for the near future.

See why I am somewhat cynical of the entire process? I am normally a very upbeat and positive person, but I am finding it increasingly hard when dealing with banks, appraisers and real estate in general.

I received a bunch of legal documents in the mail today from the title company, nothing unusual there. It was written in “lawyer talk” so I scanned it and promptly filed it away. I talked to our Realtor (and friend), Lee Mayrack, and he informed me the FHA appraisal had actually happened yesterday. We have not yet received the results of the appraisal, but most likely will know something by Friday. Based on information in the title search documents, I am not really concerned any longer about the appraisal, since the home must have sold for at least $270k 4 years ago, and that was before the basement was finished. But I guess in this lovely Bush economy, anything could happen. Keeping our fingers crossed…

On a somewhat related note. I cannot say enough good things about Ford Motor Credit. We are saving as much as we can, and are really in no danger of not making the closing (financially at least), but I know there will be a lot of miscellaneous money spent following the move, buying a lawn mower, trimmer, etc. We will do the move ourselves, using my truck and Mark Shelton’s (owner of Shelton’s Bar and Restaurant) trailer. Having recently paid off our credit cards, I am not in the mood to charge these things.

So I called Ford yesterday and asked them if we could skip the May payment, tacking it on at the end of the loan. Not only did they immediately say YES, they even offered to let us do the same in June if we so desire. The customer service person that I spoke to was a real, live American, with no accent at all, and was very professional and friendly. She was in Michigan. Imagine that (Dell, Microsoft, Capital One, HSBC), a customer service person that is in America, speaks fluent English, and is nice. Ford just went up a notch in my book.

We found that the home we are trying to buy has a virtual tour, which is much better than pictures! Try it out here.

We are very excited, and it is hard to temper that excitement, but the reality of it is FHA home appraisals are historically very harsh. Don’t get me wrong, we are thrilled that the sellers accepted our latest offer yesterday, but are scared to death of the next step.

Now we have all of the loan documents in our hands and they are going out tomorrow. With them is the $350 check for the appraisal, $350 we don’t get back if the home does not appraise for what we offered. It should, but in the current economy with home prices going down, it is something we are afraid of. The Realtor is not afraid, he is quite certain it will appraise for at least our offer price. That offers a little relief, but not much.

This is also my first “full-doc” mortgage, but I guess that is the way these days. I have never scanned and printed so much documentation in my life. I have no doubt there is a blood sample and DNA request form in there somewhere. Oh, 1999 was a good year. Fill out an online form, get a date set for closing, show up. End of story. Can we elect Bill Clinton again? Damn the constitution!

So we probably won’t know any more about the house for 2 weeks or so, whenever the FHA appraiser can get around to looking at it. So will all chill out in limbo, start saving even more cash than before, and wait. And wait. And wait. 🙂

Here are some pictures of what we hope will soon be our new home:

We made a fresh offer on the first home again. We just have not found a home we like as much as this one. Our realtor is more confident that this offer is sweet enough to make the seller move on it. We are hopeful and should hear something by Monday. They do have an open house scheduled for tomorrow, but it is supposed to be stormy here, let it rain! If they accept the offer, we will have to save about $8000 in the next 8 weeks. That is doable, but we will have to tighten down the purse-strings to pull it off. Hopeful once again.

As I somewhat expected, though was hoping would not happen, the sellers of the home we placed our second offer on countered our offer with a poor one. We briefly considered revising it, then decided to flat out reject it. I just don’t think they are actually trying to sell their home. They have had it listed several times since 2005, usually for short periods of time. In fact, just last year they had it listed for $259k, which means that even after Realtor fee’s, they would have walked away from our offer with more money than they listed the house for last year! I just don’t think their home appreciated $10,000 in the last year while everyone else’s home went down in value. They can keep it forever for all I care.

There are officially no other homes on the market right now that we are interested in. So will will keep saving our money and hoping more come on the market between now and summer.

After looking again at a home we previously viewed, we decided to go ahead and make an offer on it. The big drawback was the backyard, which appeared to be very small. We drove by the house Saturday and started wondering where the property lines really were. Our realtor emailed us aerial photo’s of the lot with the lines marked and we were very happy to see that the lot is MUCH larger than we originally thought. This makes a huge difference.

Again, we are a long way from home ownership, and while hopeful the current owner will accept our offer, we are doubtful that they will. I will write more in the blog very soon if they do in fact accept the offer, or counter with a reasonable deal. We still have to get past FHA appraisal, which from what we understand can be very difficult.