House Appraisal...its ugly!

We received our appraisal and it was not so good. We were hoping to be able to get an appraisal that would cover the construction of the house, the site work, septic, foundation, renewable power, appliances, cabinets, and some miscellaneous items and the balance of what is owed on the land. Unfortunately the appraisal came back about $80,000 under what we had hoped for. The appraiser and bank do not take into account the fact that the house will be sustainable/green, they mainly go off of previous home sales in the area and existing listings. We are in rural New York, we're not a in a posh county with big fancy houses so this is the main reason our appraisal came back so low. This is not great news, we wanted to not have to use any of our savings to use as down payment. The bank will only lend us a maximum of 80% of the appraised value. So that leaves us a bit short. So at the moment we are going through our plans and doing a little bit of "value engineering", we may hold off on a couple of pieces of the project and possibly tackle the project in a few stages instead of all at once. Much to our disappointment one of the main things we can do to save money is to postpone the purchase and installation of renewable power systems. As disappointing as all this is we have to believe there is a reason for all this. The upside of all this is that our mortgage payments will be lower and maybe after some time has passed technology will have gotten better for our Wind and Solar systems. We're going for our bank loan soon so more news on this to come.

Comments

[Lisa Fishler]

Hey guys -
sorry to hear about the bumps in the road... the appraisal piece kills me, we went through the same thing! When I asked what the adjustment was for the uber tight building envelope and fossil fuel free heating system, I was told, "$0". ZERO? I asked.... YES, ZERO, the bank responded. Outlandish, I say..... utterly, insanely, outlandish!
My fingers are crossed for you --
* Lisa

[Baldomero Fernandez]

Thanks Myleen, We are just going ahead with coming up with part of the money instead of sub-financing. we're cutting a couple of things out until we can save the money to do them. In the end our monthly payments should be lower and that's a good thing. We are also looking at getting a 90% loan instead of the original 80%.

[Myleen Sjodin]

Awwwww... that's so disappointing! :-( For the 80K, can any of that be subfinanced? I got a great deal with a local lender who allowed us to do 90% of the appraised value. The lender said that the investor was going against the norm of the mortgage field, so this investor gave us a great rate anyway on a jumbo loan. Did you check out any local lenders? Are you also owner building or are you paying a GC/builder? I hope we can help each other. I would really love to see your project succeed.

All the best, Myleen