Category: Home Improvement

Well after going back and fore several times with the owner of the house, we have all agreed on the final terms and signed the required contracts to purchase. All of the paperwork will be delivered to the mortgage company on Monday or Tuesday, at which time the FHA appraisal will be ordered. It already seems like we have come very far in this process, but we are acutely aware that had the last appraisal been done correctly we would already have been in our new home for almost a month now.

So we are back into waiting mode, hoping that everything goes well. If it does, we will close on our new home the end of July, just a little over 4 weeks from now. If it doesn’t, we will either close the end of August with a different mortgage company (non-FHA), or will be stuck in our rented duplex until the spring. We don’t even want to think about that right now. So we will just wait and see what happens, and try not to get our hopes up just yet. I did instruct the mortgage company that I absolutely will not pay for an appraisal done by Lynette Richter.

Though we are trying to keep emotion out of this right now, we did hit Menards this afternoon and looked at ceiling fans, cabinet hardware, pre-hung door frames, paint, and other stuff we will hopefully need to purchase very soon. Keeping our fingers crossed….

As expected, the first home we looked at yesterday was our favorite, so we have decided to make an offer on it. Our Realtor was going to write it up yesterday and will bring it over later today for us to sign. The sellers will then have until Tuesday to accept or counter the offer, and we expect a counter.

We looked at two other houses as well. The house on Martin Street we ruled out because it did not have air conditioning, and would need a lot of updating and other work. It did have an excellent hot tub room, but that could not make up for the other many shortcomings.

A rebuilt home on the corner of Church and Brewery was very cool. It had a ton of woodwork and, at least to me, felt like a very large cabin style home. I loved the house since I am always partial to a lot of woodwork, but the location is terrible. It almost touches the house next door and has a horrible yard. In addition, when they rebuilt the home, they kept the original stone basement and added a crawl-space under the new addition. This means the basement is like a dungeon and has no usable area at all.

As for the home we are making an offer on. It does need some updating because it is owned by an older lady that has lived there since the house was built in 1992. There is some wallpaper that must come down, but not too much. We will have some substantial painting to do, both interior and on the rear sundeck, but the deck is a major selling point, very nice. The carpet is in good condition and the kitchen will only require removal of a hideous stove exhaust system and updated hardware for the cabinets. All walls are basic white and without crown molding, so a few dollars and a few weekends of work will totally overhaul the upstairs and make it very nice. I would also replace all of the overhead light fixtures with ceiling fans in all bedrooms, something I have a ton of experience doing.

The basement is about 1/3 finished, which is perfect for me. The part that is finished was done very well and creates a large family and game room, with a 1/2 bathroom. When I walked into the unfinished section is when I fell in love with the house.

There is probably 800-900 square feet that is studded in and insulated already, all exterior walls. An additional 150 or so square feet is provided as a cold storage room, with built in shelves. In the main basement there are beefy hand-made shelves along an entire wall, and a great space to build in. I will be able to add a workshop and office for me, as well as another play/family area. Another bedroom, or one shared with my office, would also be quite easy to build.

Having the exterior walls studded and insulated will save me a lot of money when I finish the basement, which would be right after the closing (at least my office). I haven’t yet drawn up my plans for how to finish it, but just guessing I would need about 75 2×4″, 20-30 sheets of drywall, 3-4 interior doors, electrical wire and outlets, tape and mud, trim, paint and misc. hardware. Carpet will likely be the most expensive single item, so will probably wait just a little while.

Even though I am just dreaming at this point, we are hopeful that we will have an accepted offer and a closing date set by the end of this week. Then we will sweat yet another appraisal. I have already told the mortgage companies that I will not pay for an appraisal done by Landsafe and/or Lynette Richter, because they totally suck. See the previous home offer for more information on Landsafe and Lynette Richter.

After a couple of months off from house shopping, we are back at it this morning. I was able to get us pre-approved for a new mortgage, possibly two, this week. The best one may be through Jules Stewart at iFreedom Direct, but it also looks like our local State Bank of Cross Plains may have a good one too.

The problem is there are not many homes we like for sale in Cross Plains right now, and we are limiting our search to the village, or at least the township, so that the kids will not have to change schools. Did I mention that we love Cross Plains? 🙂 There is one home that seems nice and we are going to look at it this morning. It is on Thinnes Street, just a couple of blocks from my ex-wife (our only nearby babysitter), which of course means my daughters.

We are looking at homes considerably less expensive than before, about $50-60k less in fact. I am hoping that the lower priced homes will have an easier time appraising, and if not, that the owners, who are typically older, may be able to make up any shortcomings in a low appraisal. The home this morning is on the market for $234,500, and has been on the market a little over a month.

There are 3 other possibilities as well, but this home is our favorite so we are going to look at it first. Our lease has expired, but the landlords are allowing us to stay here month-to-month. But that is only until the end of August, so we either have to buy a home by then, or sign a new lease that will take us into at least spring of 2009, something we are trying hard to avoid.

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.