Back In the Saddle Again

I'm so excited that I can't sleep, so what's a fella to do? I know... Blog! TODAY I meet the builder and his excavator at the site to review the pin placement (location of the surveyor's marks of the building's corners). We could be digging tomorrow if the building permit is issued today too. I feel like singing the Gene Autry classic.... "I'm back in the saddle again..."





From my last post you might have concluded that we would be well under way with construction by now. "Not so fast" the man said! We never imagined that an allegedly qualified appraiser would look at an appraisal by an even more qualified appraiser and discount his work so much. First National Bank's "Field Appraisal" remarkably came back exactly the same low low number as the previous one from that bank. This, despite the fact that the work they were "checking" yielded a result 26% higher. Unbelievable! Well... we went into mourning again for a few months and just couldn't talk (blog) about it.





When we finally picked ourselves up off the ground, I found yet another bank that had expressed interest. In fact, Bank East had first approached me several months ago expressing interest in the Energy efficient house they heard we planned to build. The lesson here must be something like: find a bank that already is doing "Green" or is at least is interested, rather than waste your time on banks that can't spell "green". I'm convinced that despite the alleged "arm's length" that is supposed to exist between banks and their appraisers, First National Bank must have directed the appraisers what number to come back with. They must not have wanted to loan more than $XXX. To top it off, when we finally saw a clear copy of the appraisal report, it looks like the guy appraised the wrong lot! The photo in the appraisal report bears no resemblance to our lot. It's pretty clear the guy had a result in mind so that when he got a photo of a lot with no view, there was no reason to question the direction he had been given. I've asked the bank for our money back (for the ridiculous, wrong lot appraisal fee). We'll see how they respond.





BUT, back to happier things.



Bank East has been a joy to work with! They, too, were concerned with the lack of "comparable sales" for a qualified appraisal and told me, straight up, that there were no guarantees. We just take our chances on the judgement of the appraiser. Still, since they had expressed interest in "green" building AND were nice to deal with, we decided to try our luck one more time. I'm glad we did! Bank East's appraiser made a serious attempt to understand the plans, specs, view, LEED (Leadership In Energy and Environmental Design) checklist and intangibles of our project. The result was an appraisal that, while still not covering the total cost of construction, was high enough that we can fund the shortfall with our savings. In fact, the appraisal report includes the LEED review checklist that we had submitted with the plans. For Blount County, this guy is a real renaissance man!

Progress! (with finger's crossed)

It pays to read the fine print! You may have seen my rant about the screwed up appraisal system. Last time we just went with the flow, settled for the next guy on the list and, not unexpectedly, got a rediculous result from an inexperienced, unqualified appraiser. Unwilling to "settle", we struggled to understand the process. Finally, we managed to get a written copy of the underwriting guidelines that the bank used to guide the process. Despite all the stories we had heard about arm's length (bankers can't even talk to the appraiser or know who they are before hand), we found a way to be sure we got a qualified appraiser. It's called a "field appraisal". So long as we are willing to pay for two appraisals, we can hire the first one ourselves! By then, the work is done. The thinking is done. With the first appraisal done by a certified professional, even if a beginner gets assigned the field appraisal they won't get it wrong. Well, the first step is done! We got a good appraisal when we hired a qualified pro. Our appraisal is still on the low side of where it might have been two years ago, but it's good enough to get the construction started. My fingers are crossed. We'll know in about a week if our plan worked.

ARRRRRRGGGGGGG!

This is frustrating! Now we're all dressed up and nowhere to go. We thought we were doing the smart thing; selling our old house so that we would KNOW how much we got out of it. That way we wouldn't have to worry about selling it at an unfavorable time/price once the new house is complete. Little did we realize that the new banking/appraisal climate would prevent us from even starting the build! 5 months into this little rental house and we're still suck on trying to get an appraisal.



here's the deal. Banks have money to lend. We're qualified borrowers. We've got a good set of house plans. We've got a good builder who is HUNGRY for more work. Building materials are at a temporary low cost point and interest rates are at an all time low. Why not build now? Start today? Start tomorrow? Why not????



Because we got a "Gomer" for an appraiser who thinks he must appraise a $400,000 build as though it were an FHA (starter) house. Because of abuses that led to the housing bubble burst, the new rules prevent banks or agents from picking (or even talking to) the appraiser who will get the file. It's luck of the draw. If the next guy on the list is an inexperienced kid, or a near retirement age person just putting in time, we get stuck with a bad appraisal. That's exactly what happened! The guy whose "turn" is was is a guy who couldn't make it as a builder or a real estate salesman, so he started doing appraisals. He's got his FHA checklist and by golly he's gonna do an appraisal. Granted, there are very few comparable sales in the south part of the county. Granted, we have some costly features designed into the plans. But my goodness... how can the guy think the house would appraise for $150,000 LESS that the cost to build it? This is Blount County, not LA or Florida or Las Vegas. I've given him four comparable sales, in Blount County and he won't use them 'cause you have to drive past 18 miles of older farmhouses before you get to those subdivisions. Worse yet, the "Greenest" feature of our design, (passive solar design and orientation) counts against us. (I think this Gomer probably thinks Global Warming is a hoax too!) He can not or will not count the south facing walkout basement rooms with poured-in-place (thermal mass) concrete walls as bedrooms. The net of that unenlightened approach is that he's trying to appraise a one bedroom house! Never mind that we have a full suite (2 bedrooms, full bath and a second kitchen) downstairs. How ridiculous can you get?



So... what's next? Our original goal to downsize the floor plan and upgrade the quality and performance of our home fall victim to Gomers and the status-quo. We've redrawn the plan to put two more bedrooms upstairs. We'll have to leave the basement suite unfinished. We'll drop off other Green features to try to trim the cost and maybe, just maybe, we'll get a professional appraiser this time who recognises that he can (and should) make adjustments for the quality of a building, not just operate off of a checklist. I'm keeping my finger crossed!

Desisions, decisions, decisions

We've updated the drawings and the contractors have them. Still, in the interviews, it became very clear that we've got hundreds, even thousands of decisions yet to make. "Is the deck wide enough?"; "Can we settle for foam insulation backed by traditional blown-in, vs all foam?"; "How important are the two (2) tankless water heaters?"; "...Or is a single large 'Solar Thermal' water heater the better way to go?"; "Is now really a good time to start?". It's dizzying to consider all that we don't know about optimum green design. Our budget clearly will not allow us to be as evolutionary as we want to be and yet we want this house to show leadership in environmental design. And what about this.... why does green building.... doing the right thing... cost so much? The house right behind us just went up for sale. It's bigger than ours. It's higher than ours (better view). It's on more acerage than ours. ... And it will sell for about the same as we plan to spend on JUST THE HOUSE, let alone the land. What's up with that? Needless to say.... we are a little apprehensive about this project right now!!!

On a brighter note, we've just given the go-ahead to "Grounded Design Studio" to work up a garden plan and overall site plan, including the orchard and rain gardens (for run-off control). http://www.groundeddesignstudio.com/. We're as excited about the big garden as anything and these guys will help us plan it and create the vision of what it can be. Of course, gardening is a long, drawn-out process and our fruit and apsperagus may not harvest for several years... Still, it's a start. Cheers.

Ready or not... here we go!

We took a little delay these last couple months. Given the uncertainty of the economy these days, we thought it prudent to sell our existing house first. I'm much too conservative to risk getting the new place built and then find that we have to settle for less than we need or expect from the sale of the old one. We'd rather live in a rental for a few months than let that scenario mess with our sleep patterns.
We listed with our champion real estate agent, Debbie Richesin in February. We were almost ready to show the house. A little paint here. A little filldirt and grass there. We were ready to show the house by mid March. Debbie managed our expectations well and we priced it to sell. Despite a terribly slow market, we had respectable showings and then... last week got a very respectable offer. After some tooing and frowing, we agreed to throw in the pool table and patio furniture, but got what we needed to build our plan. Now it begins.

The longest journey begins with a single step!

A groundbreaking day! We didn't really break ground today, but we DID break THE ground for the first time. Early March, mid 70's, sunny and breezy. What better time to think about a Christmas Tree! It was finally nice enough to think about digging in the dirt so Sue & I made a field trip today after Church & planted last year's Christmas Tree! Great Fun! Sue read... I sweated. Then we both took a nap in the grass, in the sun. All-in-all a successful outing and the first of many times I'll take a nap on that hillside.

Ahhhh. The budget????

18 months later, we now know better. In October 2007, we thought you could build a custom home for around $125/ sq ft. That's what the web resources said. That's what the Architects said. The "devil in in the details", however is very true in home building. While I have no doubt that the spartan little homes on flat downtown 'in-fill' lots that are the prototypical "green" home can be built for that, we were clearly naive to plan on it for our home. The cost of site work and all the unfinished spaces don't fit into tidy calculations like 2290 sqft x $125 = ~ $300,000. Boy, did we miss the mark!

In all honesty, we DID know there would be extra costs associated with our lot: gently sloping vs. flat; a new development vs. in-fill; 3+ acres, off the road vs. 1/2 acre in town. We knew all that, but didn't fully appreciate the magnitude of the cost impact of those details. Soooo.. we naively pressed on thinking that we could build this house, lot and all for around $420,000.