The first big bump in the road (crater maybe?)

When everyone told us building a house was hard, they weren’t kidding. It is hard to make decisions, it is hard to make choices and it is hard to know if this is the right move or not.

Over the last few months, we have been working closely with Sterling Homes to design our custom home. Not only have we changed our mind a few times about details, but we even got rid of the second floor after we were so close to contract.

We have now moved into a phase of securing financing.  Yesterday, we hit our first bump in the road.  We received word from our first bank that the appraisal was received, but unfortunately, it was over $30,000 less than what we requested to complete our project.  The good news was that the appraisal was completed two ways – from a cost approach which was closer (within $15,000 of our actual costs) than the sales approach.  Unfortunately the sales approach is what the bank would go by leaving us with one less option on our list.

But today, we are discussing our options with other lenders and I’m confident that we will be able to secure a loan package for our build.  Our situation is difficult because of several reasons:  1) it is very difficult to find comparable homes for an appraisal where we will be building and 2) the market is extremely depressed.  Unfortunately, there is no difference in a forclosure that sold for half price and the buyer/seller home next door to it — both become comparables for our appraisal and those short sales and foreclosures are killing everyone.  We are no immune to the market.

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