As I wrote in my online journal on July 15, 2006 - if something can go wrong, it will:
Well, you might know, I bragged in here too early about the house we were trying to buy. The appraisal came in on Thursday [July 13] and it is significantly lower than the sales price. The builder says he won't come down on the price. Currently he is in an RV on the way to Colorado. He is an older guy and apparently has a lot of ego. The mortgage company won't loan above the appraisal amount (and I can't blame them) except at a premium interest rate. We don't have the cash to pay the difference, and I would be resentful anyway paying that much (>10%) more than the house is appraised for.
We are now in a bit of a bind because we gave notice at our apartment and need to be out around the end of the month. The landlady has already pre-leased it to someone else. Thanks to all the Barnett Shale drilling going on around here, there are absolutely no vacancies anywhere. Not that I am too crazy about moving somewhere else, going through that hassle and having to sign a lease, even if short-term, only to (hopefully) move again into our newly-purchased home.
I really like the neighborhood and there is a brand new house across the street that is also for sale. Different builder and about 250 square feet smaller. It is also overpriced. We think we might have more luck convincing this builder to come down, because two of the three homes used as comps in the existing appraisal were his homes! One of those is in this same 23-lot neighborhood (that only has 8 occupied homes so far), and there was ANOTHER home he built in the neighborhood that could have been used as a comp if it hadn't sold just over a year ago.
I did some calculations based on the adjustments the appraiser made for different square footage in the comps, which is about the ONLY adjustment he made as almost everything else you'd make adjustments for is similar. I came up with a potential appraised value for this second house that ranges from a low of $35K less than the asking price to $8K less. We are thinking of offering the higher number, with a clause that we will pay that or the appraised value, whichever is lower.
Naturally, this being Saturday, we are having a hard time getting hold of anyone to make this happen. Meanwhile the month continues to tick away...
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So on Sunday, July 16, 2006, Mark and I toured the house across the street from ours. I'd seen it before, back in early June during the Hood County Builders Association annual Showcase of New Homes, but this was Mark's first time inside. I think from his facial expression, you can tell that he (like me) did not like this house quite as much as the one we did buy.
Above: Mark inside the house across the street from the one we ultimately bought, leaning on the breakfast bar.
Below: We forgot to bring a measuring tape, so I took this photo of Mark using his arms to measure the space to the right of the fireplace and just below a built-in glass-front cabinet.
I'm going to skip ahead a week, to July 22, 2006, and tell the rest of the story:
We are back with the first house!
We did make an offer on the 1636-square-foot house (hereafter referred to as 1636SF) across the street last Saturday, at the figure our realtor thought the house would appraise at, which was $15K under the asking price. That builder countered with a figure about $9K higher; we countered again but he held firm. So, it looked like we would get that house for about $6K under the asking price, and about $10K more than what we thought it would appraise for, which we were willing to pay.
The signed paperwork on that deal was turned over to the mortgage company on the 19th, and they were asked to prepare the letter for the first builder (the 1886-square-foot house, aka 1886SF) to formally inform him the appraisal came in low so the deal was off. In the meantime, though, that builder called our realtor and requested a meeting.
Our realtor went to see him the morning of the 20th. Apparently, he needs to get 1886SF out of his inventory because of the other projects he has going on, and was now willing to deal. He dropped the price to one 15K less than that on the contract, 10K above the appraisal.
In the meantime, the mortgage broker talked to the appraiser about 1636SF, and the appraiser quoted a figure that was also about 10K less than the contract. We decided that if we were going to have to come up with 10K cash for a house, we'd rather have 1886SF, because it is bigger and nicer (1636SF does not have hardwood floors, for example).
I had thought we would lose our earnest money if we dropped out of the deal on 1636SF, but I had forgotten we paid $50 for a ten-day option (meant to allow for inspections and such) where we could back out for no reason. So, we did just that on 1636SF, just losing the $50, and that house was only off the market for a day (if even that; I don't think the listing agent had even gotten around to updating the Multiple Listing Service).
We did this AFTER getting the revised contract at the new price initialed by all parties on 1886SF, which happened in the evening on the 20th. We are back to getting 1886SF for $20K less than the builder's original asking price, and we will be able to close by the end of the month, Wednesday [July 26, 2006] at the earliest, hopefully Friday the 28th at the latest.
So, this weekend we will be busy packing boxes. Next Saturday we'll go get my stuff out of storage, as otherwise we will not have a bed to sleep on!
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