How long did your pre-construction appraisal take?

zone4newbyFebruary 10, 2013

It's been about a week since our "appraisal appointment" (the concept of an appraisal appointment made more sense to me when they were appraising an existing home) and since we're pretty anxious to get things moving, I'm wondering how long this typically takes?

We are building in the outer edges of the Twin Cities metro in MN, and there aren't a lot of comps for houses like ours (which is why we're building). We spent more than a year looking for an existing house, and I'm not sure we saw anything within 5 miles that would be considered a comp. Anything that has roughly the same finished square footage of what we're building is either in a development or 15+ years old or both, and they're almost all split levels, while we'll have an unfinished basement. Very very few have 4 bedrooms like we will. All of this is to say it might be reasonable for the appraiser to take a little longer than s/he would if we were building one of 4 possible house plans in a development, but I don't know how long.

Thanks!

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sweet.reverie

Ours took almost 4 weeks here in WA state.

    Bookmark   February 10, 2013 at 12:57PM
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matt_in_ks

About 4 days here in Ks. My banker asked them to move it through quickly. You will likely need to get an appraisal at the end of construction also and the appraiser would like to get your repeat business. 4 weeks sounds unreasonable but I suppose in MN you may not be able to start until it warms up a bit anyway so that may be part of the long wait.

This post was edited by matt_in_ks on Sun, Feb 10, 13 at 13:05

    Bookmark   February 10, 2013 at 1:02PM
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greendesigns_gw

It depends on how well the home you are planning fits into the neighborhood. Those that are very similar to what's being built around them will take much less time to evaluate. Those that are vastly dissimilar, which is what you are planning, take a lot of time. And they also tend to be valued much lower than they would be if they were being built in a similarly built up community. Be prepared to think that your appraisal is ridiculously low and to bring more cash to the build than you thought you needed.

    Bookmark   February 10, 2013 at 1:09PM
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zone4newby

GreenDesigns-- we're building on a 10 acre lot. It's not a standard neighborhood where a single builder came in and put up a bunch of similar houses over 2-3 years. Of our nearest neighbors, one is 50+ years old, and the other is 10 years old, and the style of the homes is dramatically different (which would matter more if the lots were smaller, IMO). This degree of variation is common in this area, IME, I don't think there are developments around here where all the houses are the same and the lots are of this size. I agree that if there was a development going up with only houses of the style we prefer, that would be worth more, but I would expect that would be accounted for in the cost of the land?

Part of the reason there are few or no comps is that the real estate market has been dead for the last few years, and it's not a heavily populated area, or an area with a transient population, so it's been especially dead there. It's not that we're building something really odd.

Ugh on the 4 weeks, Sweet_Reverie.

    Bookmark   February 10, 2013 at 1:44PM
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sweet.reverie

It was not too big of a deal because we were waiting on the permits anyway. But it did keep me on my toes!

    Bookmark   February 10, 2013 at 2:20PM
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daisyblue

We are currently awaiting our appraisal as well (nervously, I might add because there aren't many good comps in our area either).

Here's hoping your appraisal comes in where you need/want it to be!!

    Bookmark   February 10, 2013 at 11:16PM
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ohbldr

The appraisal and underwriting process typically is 3-4 weeks in Northeast Ohio, and "comps" are the key. Without the right ones in the right area, relative to where you are building, you can be stuck with a too-low appraisal which requires one to bring more cash to the table at closing (before you start construction and finalize the loan). One of my clients had to cough up an additional $100k at this point in the process about a year ago. The good news is that things are improving as values rise across the country. The bad news is that things are still not where they need to be for new construction to be fairly valued.

    Bookmark   February 11, 2013 at 8:12AM
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nr81inIA

Ours took about 7 or 8 weeks to complete both the appraisal and underwriting processes. The bank told us right away that the appraiser was behind, and asked if we wanted them to move on to a different one on their list. Our builder advised us to just wait it out because he had dealt with this particular appraiser in the past, and had always had good luck with him coming back with good numbers. The appraisal came back good, but because we're building in a rural area with no good comps the percentage of adjustment was high, around 25%, in most cases. Obtaining the construction loan was not a problem, but the underwriting department would not approve our end loan at the 30 year fixed rate that we were planning on. We are now looking at a 5 year ARM, but the loan officer told us it is still possible to qualify for the fixed rate upon completion if more comps are available at that time. We shall see I guess. Good luck!

    Bookmark   February 11, 2013 at 1:47PM
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agentslim

Appraisal + underwriting took us 5 weeks, were in California.

    Bookmark   February 11, 2013 at 11:53PM
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zone4newby

Our appraisal is back, and we got what we needed! :)

    Bookmark   February 12, 2013 at 11:05AM
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auroraborelis

agentslim - what bank did you use?

    Bookmark   February 12, 2013 at 5:36PM
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auroraborelis

We just received our appraisal back - AND it was 10% over what we needed! I'm quite thrilled, as the appraisal process has been weighing on me for the past year of planning this.

From application to close our bank has told us it will take 60 days.

    Bookmark   February 12, 2013 at 5:38PM
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daisyblue

Congratulations, Zone4newby and Laura12!! How exciting!

    Bookmark   February 12, 2013 at 7:04PM
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abrshafer

Our appraisal took 3 days and it was just sent to underwriting today... I'm hoping that goes just as fast....

    Bookmark   February 20, 2013 at 10:01PM
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buzzyng

sweet.reverie - Are you western WA? Were you an OB?

    Bookmark   March 8, 2013 at 3:39AM
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mum2gandb

Ours took 3 weeks! We did ours right around the first of the year.

    Bookmark   March 8, 2013 at 1:22PM
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