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A funny lesson for those trying to purchase a unique old home

Posted by igloochic (My Page) on
Thu, Oct 8, 09 at 13:40

So just for grins and giggles I thought I'd share our dilema in purchasing our beautiful new old home. It's a 1889 "modern" (for the time) queen anne (that means it's not quite as ornate as earlier queen annes on the outside but the inside...ohhh la la). Anyhoo, the home is unique and it's large, in a town full of wonderful old victorian homes, many unique and many large.

But here's the dilema...none of those other unique and large homes has sold in the last year...in fact none in the last two years and if you go back three years, you have one comp, but it's not really a great comp.

So the bank is stumped at how to get a conforming appraisal on the house and of course we need this for the loan. We are having to spend a fortune getting a special appraisor to look at the place and spend time justifying comps and then still have to hope the bank can take it! ARGHHHHH

We'll buy the house, come hell or high water (the owner will work with us if necessary) but sheesh it's not an easy process. When you buy a historic home...if you want life to be easier, buy one that is similar to something else that's sold in the last year LOL

The banker did offer an out from all of the appraisal madness...if we have an extra million MILLION she said!!! And we could put that on deposit with their premier client program they could waive all needs for the appraisal and print docs tomorrow. LMAO I looked in all of the couch cushions and checked online to see if we had any forgotten swiss banking accounts and all I've come up with is 1.89 in change...and some old M&M's. Anyone want to chip in? :oP

This process is so much different than buying a new home. I've never bought a brand new home, but nothing historic. It's amazing how different the process can be! Getting it insured was also a process! So for anyone who reads this, and for me...are there any other suprises I have to worry about in this process? I can't imagine what else could come up LOL But then I didn't think a loan would be a big deal and certainly thought the insurance would be a quick phone call...boy was I wrong!


Follow-Up Postings:

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RE: A funny lesson for those trying to purchase a unique old home

Standard unimaginative banker: "We'll only loan money to you if you don't need it."


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RE: A funny lesson for those trying to purchase a unique old home

When my dh bought this house, he had to bank shop. One bank just refused, the next was no problem. Speaking of comps, I went to the comps listed on which our real estate taxes are based, and it reads like a pipe dream. I don't know how they came to picking those comps. I suspect to turn totally unimproved agricultural land into developed building lots, and it never shall be as long as I suck breath.

Insurance is a different matter. No insurance company really wants to insure really old homes. It's not because they're unsafe or likely to fall apart, it's because they're extremely expensive to replace with material in kind. I have had aquaintances have companies just drop them for that with no warning. Our own agent, calls them White Elephant policies. LOL. We may be able to purchase a home to move back in to if this one is ever totally destroyed, but no way short of winning the lottery with the same construction or materials we enjoy now.


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Kudzo, just what I thought (and I was a banker for 20 years LOL)

Calliope, the insurance calls it "unique house insurance" which probably equates to white elephant. It took a few agencies to get someone to go out and look at the place and give me a quote.

I know that there is not way in heck you could ever rebuild most of these houses :) They shipped the wood in from the east coast and carved the stair rails on site for this house....can you imagine what that would cost in today's dollars? Fortunately it has a sprinkler system...and let's hope it never burns cuz we'd never replace it on the insurance value.


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igloochic-
Glad you weren't offended. It's just that lately we've had a lot of bankers doing irresponsible stuff, and, when it blew up in their faces, many of them retreated to a fetal position. Some place inbetween is reasonable, but we're not there at the moment. The risk-taking banks were big on freewheeling capitalism at the expense of the rest of us, and now all-of-a-sudden they are converts to financial socialism...at the expense of the rest of us!


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RE: A funny lesson for those trying to purchase a unique old home

"unique house insurance" boy that sounds better than a white elephant policy, doesn't it?


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Kudzu my last year in banking I spent lecturing other banks on how to meet HMDA and CRA goals and NOT get into predatory lending so I completely get your comment :) It's been well earned by so many banks.

It's frustrating to be involved in what should be a simple loan really but the new regs, caused by the idiots who had to push the profit button too far, are making it much more difficult to purchase a home. All that profit at the expense of us is right! The fees on this loan are rediculous, the appraisal cost...unreal! And all because someone didn't pay attention in one of my lectures heh heh Ok maybe it's my fault...I wasn't funny enough :oP

Calliope...it sounds more expensive LOL I'd probably rather a white elephant. Suprisingly it actually is a much better policy than we have on our 1980's town house, and it's about the same cost. Very odd but I'm not complaining.


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"Speaking of comps, I went to the comps listed on which our real estate taxes are based, and it reads like a pipe dream."

Tax assessments are not a valid basis for the appraisal.

If I sold a house for its assessed value I would have lost money many times (real money, not just paper gains).


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It would depend on the area brick. no they're not acceptable per appraisal standards but in our case, we're buying for tax assessed value.


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The feds set the appraisal standards, an tax assessments mean nothing.

It does not matter what you are paying, the bank needs to follow the rules or they cannot sell the loan into the secondary market.

It would not be conforming.

What you are willing to pay does not assure the bank that they can recover the mortgage balance from another buyer.


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"Speaking of comps, I went to the comps listed on which our real estate taxes are based, and it reads like a pipe dream."

Tax assessments are not a valid basis for the appraisal.

If I sold a house for its assessed value I would have lost money many times (real money, not just paper gains).

Actually I understand how appraisals work in my state, both in taxation and for mortgages. My property is worth what it's worth to me. It's paid off, and I'm not going to sell it any time soon. I do have to pay taxes on the newly inflated value however, and don't see how they can take an old farmhouse on property used for an agricultural business and comp it to a residential home in a subdevelopment, or turn my future goat pasture, once taxed as unspecified agricultural ground into a residential lot. I guess I need to CAUV it, I qualify.


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I wasn't saying that TAV is a basis for appraisals specifically but just addressing that there are times when a home can be sold for tax assessed value and it's not actually a loss. (Since you said that if you sold a house for TAV it would be). In this particular city the values are close to or above actual sales (appraised) value. In this market that's not uncommon.

A bank can lend on TAV if it's not a purchase and still have a conforming loan that's sellable on the secondary market. But for a home purchase they typically need an appraisal that meets guidelines. Those guidelines are somewhat lead by the federal government, but not entirely. The "conforming" has many levels. A bank is allowed to determine if the appraisal is conforming and standards can differ among banks. They can even differ among units within the bank (ie private banking can break rules that the regular mortgage bank can't). The feds also give banks some leeway based on their CAMEL rating. Unfortunately they're not publised (or even allowed to be shared) so you don't necessarily know which banks have more leeway than others.

Calliope we're kind of hoping that our appraisal comes in low so we can protest the tax assessment :) We'll see how that goes. Sounds like it's time for you to set up a protest as well!


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I also had a problem getting insurance for my house, and it was a bungalow built in 1924 with all the "special" stuff was ripped out before I bought it. My prior insurance company just had a blanket cut-off at 1930, which was funny because I rented the house for 3 years before buying it from my landlord. No explanation WHY I could get renter's insurance on it from that company, but not homeowner's (SAME house!) I asked my neighbors who their insurance company was, that's how I eventually ended up with AAA.

Igloochic: I've seen your posts in the kitchen forum--are you saying you did ALL that beautiful work on your kitchen and now you are selling it???

Carla in Sac


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LOL Carla, nope we're keeping the place in Alaska, DH will be opening an office in WA and traveling back and forth. I can't let go of my chickens :oP (And I have to keep the house until I finish it right?????? which could be forever LOL)

So today we found out the appraisor decided he wasn't competent to appraise the house. GRRRRR I'm going to have gray hair before this deal is done!! It's a freaking house!!! Just a house. Next time I'm buying a castle in France...it has to be easier (they have comps right? Like Buckingham palace, etc?) Heh heh


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LOL Carla, nope we're keeping the place in Alaska, DH will be opening an office in WA and traveling back and forth. I can't let go of my chickens :oP (And I have to keep the house until I finish it right?????? which could be forever LOL)

So today we found out the appraisor decided he wasn't competent to appraise the house. GRRRRR I'm going to have gray hair before this deal is done!! It's a freaking house!!! Just a house. Next time I'm buying a castle in France...it has to be easier (they have comps right? Like Buckingham palace, etc?) Heh heh


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How frustrating Igloo, but if you happen to find a Mil in your couch, let me know where you got it, I'd like one of those as well!

When we sold our house, it was last December when the banks were still closing. The purchaser for our other house, who should have had no problems getting the mortgage for our old house happened to get her mortgage through a bank that kept closing branches. When the northeast branch closed, she was moved to the southern branch, when that was consolidated with the western branch... you get the idea, each time they moved the application, they re-started the process. It was nerve-wracking for all. It seems like everything having to do with banks is difficult these days, hopefully, the bank will work with you. After all, isn't lending money to you how they make their money? If this doesn't work, I'm liking the South of France, especially if you start finding some real money in the couch!


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Hi igloo! We met on the Kitchens board when I posted about coming up with a layout for my new (old) kitchen.
We are closing tomorrow and I feel like I'm about to step off a cliff! But I thought I would chime in about our appraisal issues, since we have had a heck of a time getting ours to go through. The house currently has a 4-room apartment carved out of it and is classified as a two-family. (We are converting it back.) The only two-family comp available in this area of mostly single-family homes sold at $100K less than our offer on the house. Never mind the fact that our house is a full 2300 sq ft larger and on almost a full city acre compared to the comp's .18 acre, or that the comp house was built as a basic boarding house and the house we are buying is an old mansion on the NHR. The appraiser refused to take the greater value into consideration and appraised the house at 5% over the comp. Ugh! He told us that he had more comps for single families, but for that to work we would have to dismantle the apartment kitchen down to the bare walls and remove the lock from the door. The seller agreed to pay for it in order to sell the house (closing was delayed a week), but how ridiculous is it that assets had to be removed from the house in order for the appraiser to complete the paperwork? After all of that, he was able to value it at 150% of the original comp, a good bit higher than what we are paying for it. So annoying, but in the end, at least it is a little less demolition work for us!
Good luck with everything!


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Wow what a pain! We got our appraisal today. Fortunately he didn't notice the keys on the doors (It's a B&B) or maybe we'd have to remove them LOL They ended up with appraiser out of...heck some small town no where near Port Townsend (which is odd because they have approved appraisors there). He used some other houses we considered as comps despite the fact that they haven't sold in 4 years listed. He undervalued the land significantly (about 200K under tax assessed which is accurate). It was obvious he does not know the town and that the location is far supperior to the others but we aren't borrowing a huge amount so we are ok with the lower appraisal. It's 300k below purchase price so I'm sure the owner is probably worried we'll back out :) I emailed her not to worry about it. It's a bad appraisal but we could possibly use it to lower our taxes so we'll take it :)

Now we just have to wait to see if the bank takes it.

the appraisal was kind of interesting. Given what we know about the other homes he used as comps we probably got a great deal :) Their finishes are not in the same quality level and the conditions are much lower (one needed a 30K paint job and significant repair to the wood outside due to rot from deferred maintenance) the other was only about 40% livable as is and the outbuildings are only still standing because they're historic, though they're dangerous where as the house we're buying is in fab conditioin and the outbuildings are also fabulous.

I hope it does not take me as long as you to get the deal done! I suppose it was nice to have the demo done LOL but still...what a pain.

Congrats on tomorrow though!!!!! I am so happy for you. You probably are about to step off a cliff but if you look up as you fall...you'll see a little red head jumping right off behind you hopefully heh heh And down below we have lots of company (most on this board) :oP They might break the fall LOL


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We refinanced our 1825 house back in June and the appraisal was such a pain! We refinanced 3 other times on this house but because of the mortgage fiasco there are so many more steps. Of course there are no comps within the past year! And the appraiser did a poor job - missed 8 fireplaces, 50% of our land, a slate roof, new high efficiency boiler, plus other items! Next time I'm going to request to see their info before they submitting the appraisal. It still worked out for me but my blood boils to pay $500 for a terrible job.


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good gravy they missed eight fireplaces! what an idiot...mind you, we had an appraisal done on our town house and the pics of the inside of the house...it was a different home.

We sign papers tomorrow morning and close on Wednesday (my son's birthday). I can't wait to be able to say it's officially MINE heh heh


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Missed 8 fireplaces! I would take them to small claims court and get my $500 back! That's ridiculous!

Carla in Sac


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Igloochic- I wish you the best of luck tomorrow! Happy Birthday to your little boy too, is he going to be four?

I'm writing because I've been reading the posts, but afraid to comment in case anything went wrong. We've been trying to get our farm refinanced for the past 18 months! What a nightmare...they couldn't find comps...no one wants to refinance more than 20 acres....companies went out of business...feds kept changing the guidelines...we finally got the appraisal done and we closed last Thursday. I still didn't believe it until we got the money today. (Three day wait in Washington for Buyer's Remorse, don't know if it's that way everywhere). I'm so relieved it's finally over and I hope we never have to go through this again!

On the other hand, I guess I should be thankful that we were finally able to do this and we're not in the same situation as some people who are losing their homes due to job loss or unfortunate choices in financing.

Well, this would be a really good time to get my china tea cup and go drink my tea :)


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No fun Lavendar but I'm glad you finished your refi. Banking used to be so much easier. We ended up doing a quick purchase with the owner since the bank isn't ready yet. Approving the appraisal is a pain and today they came back to ask what the status of the tax changes were, if the license was closed and if the zoning was changed...ARGHHHHH Umm perhaps they didn't remember they couldn't even do the appraisal until the first two were done (mid October) and ahhh it was never zoned commercial! Grrr...anyhoo, it will be a refi now so it might be easier.

So we did close yesterday :) It takes effect immediately (you only have right of recission...that three days...on refi's). We'll end up doing a refi in the next sixty days, but it's nice to know it's officially ours. Anticlimatic given we aren't there LOL no exchanging of the keys and all but in a couple of days :) (She's there now to keep the house safe).

The local newspaper wrote a crap article about it (makes me sound like a goofy housewife) which came out the same day and DS was having a horrible reaction to the H1N1 shot (he always has bad reactions to flu shots because of his weak system) so it wasn't a great day :( We kept his birthday quiet and we're going to have a party with a couple of his little friends (and girlfriend) on Friday and then another party at the new house. He used to be afraid of birthday cake (don't laugh it's true LOL) so it is fun to know he'll enjoy this year.

So now I'm in your boat on refi'ing LOL We'll see how it goes!


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Igloochic- I'm so sorry about your little boy's reaction to the flu shot, especially on his birthday :( He has a little girl friend, that's sweet. I'm glad he gets to have a couple of parties, with old friends and new ones :) That's cute that he was afraid of birthday cake.

I'm so glad to have that refi done. It's amazing the questions they ask you. Mine always seems to be about 3/4 of the way into it, they suddenly realize we're on a farm, or "you're self-employed?"....yes, just like we were when we started the loan. (LOL)

As for that article, don't give it a second thought. I live two miles away from "town" with 500 people and about six miles south is a town about the same size. They're really nice at "our" town, but further south, it can take them awhile to warm up to new people. I got lucky we ended up where we did!

Oh, the "thought for the day" is armoires in bathrooms, with vintage linens...page 2 on Home Decorating :) Talk to you later and Congratulations!


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I'm afraid of birthday cakes too, but in a middle-aged-woman-with-hips sort of way, hahaha.

Congrats on the house! Post some pictures!

Carla in Sac


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This is my photobucket on the house (link below).

LOL On the hips issue...we only wish the littel guy would develop some. He's nichole richie skinny (because of the food fears). He's the ideal model...a bit short at 3' but not many of those tall girls can still get into a preemie tee shirt :oP

Here is a link that might be useful: The James House


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Wow Igloo- what a stunning home! I'm happy my computer works as I'm sure I was drooling on the keyboard- those floors! The lights! The windows! The high ceilings- I could go on and on. I hope you are able to keep some of those amazing antiques that are in there.

I'm sure your family will be very happy there, how lucky the house is to have such loving caretakers move into it!


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Autumn...we get everything you see in the pictures :) Everything down to the toilet paper. We have too many beds, but will keep the ones original to the first owner for sure and the balance will mostly go into storage so I can switch out decor when the mood strikes. The mattresses will go to a women's shelter (they're all new this year). But pretty much anything antique will stay. The quality is so good it's not worth finding something else (our other home option had a bunch of reproductions...yucky ones LOL).

:) Thank you...I have ruined a couple key boards as the owner was showing us the house via internet long distance. :) I hope we're as good as she has been to the house. It's definately her "baby"


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Oh my! Glad I popped back in here to catch up on this thread. Just viewed your slideshow. What a grand old lady you have! She's beautiful. And you get to keep all of the furniture! WOW. The view is awesome and the grounds too. "Drool" is right! Did you say it's been run as a B&B? I can't exactly tell, but is that other building on the property part of the guest house too? You are not going to run a B&B, right? How many bathrooms are there? (My worst nightmare would be cleaning all those bathrooms! LOL) Looks like they managed to add all of those without cutting up the house too much (well, I presume they were added...). You are so fortunate to be able to buy such a treasure. Your little boy will have such fun growing up there! When do you get to move in?
Cheers!
-Kim


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We moved in two days ago Kim :) It's taken this long to get the internet working (and it only works on the back side of the house LOL) More work to do I guess.

Thank you :) We do love the house and grounds, although the sheer size is intimidating as you think about cleaning it LOL More so as we've moved in somewhat. Probably more so after we have 20 overnight guests next weekend.

It was the oldest B&B in the pacific northwest, (35 years) prior it was an apartment building and prior to that a hospital, and then the original owners had it until their deaths. (early 20's)

We are lucky that the folks who did the big restoration in the 60's and 70's didn't follow current fashion (painting all of the wood for instance) and they were sensative to the home. In addition, when the bathrooms were added in the last 20 years (another owner who was also sensative to the house) it was done incredibly well, taking a few feet of space from each room, but integrating them well (some B&B's cheap out and put the tubs and sinks in the rooms). They will be easy to upgrade to more victorian features (is that an upgrade backgrade?)

There are three buildings on site. One is considered the carriage house (but really is the base of a 3 1/2 story water tower we will eventually rebuild). The other is the original gardners cottage. They take up one lot and the gardens take up the other. Talk about intimidating...too much garden LOL

And on top of too much garden...I have 400 house plants (maybe not that but five or six per room). The poor things are doomed in my care. I'm thinking of a sidewalk give away very very soon to save their lives! Poor dears...even my husband feels sorry for them. I tried to convince my mother that they are guest gifts and that guests (her) must take one each time they visit but she hasn't gone for it yet (I sometimes think if she were senile my life would be much easier...)

Today we turn the old office off the kitchen (our future family dining room after we remodel the kitchen, but that's a few years off) into a play room for DS. I hope this grand old home likes thomas the train LOL

Oh here's a funny....we get about a dozen visits a day asking if we have a vacancy! It was funny but is getting annoying LOL They want tours and won't always take "private home" for an answer LMAO. "Oh dear...no rooms? Well can we just see it?" No go knock on the neighbors house and ask for a tour heh heh

Oh let's see...nope not a B&B (I'm not nice enough since DS was born and keeps me up all night) :) And how many bathrooms? Sigh...12 Do you think the B&B potential guests might think that the tour includes a once in a lifetime opportunity to clean a victorian bathroom? I might let them in....


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12 bathrooms! That would've had me running from the realtor! But, seriously, such a terrific house. You are having 20 overnight guests next weekend? Yeah. Are you SURE you aren't running a B&B? :-)


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LOL Kim, absolutely...we're sending them to a local restaurant for breakfast heh heh


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