Property Value/Appraisals RANT

[MossflowerWoods]

I am so angry I could explode...

I paid $365K for my place in August 2010, it appraised at $225 for the 51 aces, $140k for the house. I have 42 acres of mature market timber, I am putting in 5 acres of horse pasture, and about 1.5 of it is fenced an useful(two horses live there for over 1 year now).

I have 2 bedrooms, 2 bath rooms and 1344 square feet finished main floor, and a 1344 unfinished basement, and approx 840 square unfinished attic

I need to finish the attic to add at LEAST a bedroom, family room, and hopefully a bathroom. I got a builder lined up with reasonable rates and plans done. I went to the bank that holds my mortgage and they ordered an appraisal using the new plans etc.

What I got back (so far just a verbal, awaiting the actual appraisal) is showing that after adding a real 2nd floor with another 1344 square feet, 2 bedrooms, a bath, and family room a mere $410K They appraised my 51 acres at $150k, a $75K LOSS in value in just over 2 years! OMG!!!!

There is NO WAY Values have dropped that fast around here.

Once again I am dead in the water. I NEED more space, the roof leaks, this stinks.

They keep telling me it is the comps, everything comparable has sold for peanuts and....

It simply does not matter, we are dead in the water and I have NO IDEA how where to find the capital to do this remodel.

I have solid gold credit rating, but that does not matter...

In the end, the only thing I can figure out is that in reality, the FIRST appraisal was GROSSLY wrong, and I got took when I bought this place...

PS - I now need to PAY $550 for this crappy appraisal...



David

 

[JimRB]

Land is selling for the same price I paid 20 years ago in my neighborhood. That $100,000 in paper gains (year 2005 prices) is gone. The house at one end of the street sold for $166,000 that had an appraisal of $250,000 a few years ago. 3 bed, 3 bath, 2 story, 2,500 sf, wood and tile first floor, nice carpet upstairs, Hardiplank siding, fancy shingle and copper flashing. The house at the other end of the street sold for $59,000 that the bank owned for at least 4 years. I would guess it was an $80,000 house originally. 1,400 sf on an acre and a half. Often what people think something is worth and what the market will bear are quite varied. Also replacement cost can often be double what the market will bear so a good insurance agent is important. I am less than 4 years from a paid off house so I don't really care what appraisals and comps are in my neighborhood as long as criminals do not move in.

Try the web site Real Estate, Homes for Sale, Recent Sales, Apartment Rentals - Zillow In my neighborhood I can see what sold recently and what property might be worth. My property has an estimated value of less than replacement cost of my house and I have 9 acres and a 12 stall horse barn and a fancy run in shed. In other words replacement cost of structures might be $300,000 but market price isn't but half. That is why used real estate can be such a bargain over new in some markets.

 

[vtsnowedin]

Your adding a second floor to your house and it takes the house from 140K to 410K? :confused3:
I do appraisals here for the town but VT prices are of course totally different then VA prices . Prices here are set by what the dumbest kid in Boston with a trust fund is willing to pay. Prices have gone down a lot especially on older houses that need fixing up or have lead paint issues. The banks won't write a mortgage unless everything is brought up to code and signed off on. I've seen ten year old septic systems that were working fine get totally replaced so they could get an engineers stamp and a loan.
I'd fix the roof and finish some of the basement myself and wait for the market to settle out but that will probably not be in the next four years.

 

[MossflowerWoods]

VTsnowedin,

The property went from $365k to 410k by adding the finished 2nd story.

The land value is included, and dropping $75k land value is what killed my chance.

I have 3 daughters, we home school also. This house is too small.

 

[MossRoad]

I don't understand your numbers.

$365K total appraisal in 2010
of which, $225k is land and $140K is house.

That part I get.

You want to add a 2nd floor.
If you add the 2nd floor are you saying it will bring the total appraisal to $410K?

If so, that's an increase of total value of $45K.

So what's the problem???

 

[sam5570]

MossflowerWoods i feel your pain my friend i invested in land for my retirement here is just one of my investments in 2005 the 10 acres of land i own in north carolina 10 minutes from morehead city was worth around 450k that was quick sale value i have my tax ticket laying here where my wife has sent the tax payment on it and i know this does sound in reasonable but the tax value of the property now is $9780.00 that is honest and land where i live has never in my life sold for under $1000 a acre untill this past summer good pasture sold for $450.00 a acre what we own is worth nothing money wize and the sad part is i don't see it comming back in time for use middle age people to captilize on it i know it sucks but whatdo we do

 

[MossflowerWoods]

I don't understand your numbers.

$365K total appraisal in 2010
of which, $225k is land and $140K is house.

That part I get.

You want to add a 2nd floor.
If you add the 2nd floor are you saying it will bring the total appraisal to $410K?

If so, that's an increase of total value of $45K.

So what's the problem???

The remodel costs $100k for 1344 square feet, new roof, etc and then there is closing costs of $??k... 1344 square feet should add approx $140k... but the land & house are on a single deed/loan. House went up in value $115k, land went DOWN $75k...

Therefore, I am toast, plus I need to pay $550 for my wife's shattered dreams... this could cost me my marriage, we NEED the space...

 

[KTurner]

Just venturing a guess here.... Banks have gotten crazy stupid specific on what they'll do for loans. Doesn't matter what your credit is like, what assets you have or how much you make, banks won't entertain anything except their specific pre-determined scenarios. They don't even ask how much you make, have, credit score, etc if you don't match their scenarios. The scenarios are spelled out by fannie and freddie, so basically everyone uses the same ones. Quite a change from the govt mandated 'give everyone a home loan even if you know they cant afford it' of a few years ago.

He probably can't touch the first 20% equity in the house because 80% LTV seems to be the magic number. I'm guessing the $75k that vanished from the property value probably means the difference between being able to pull out some equity and not being able to pull out any, even after factoring in the additional value from the remodel.

Possible silver lining - Use the lower than expected appraisal to dispute your tax assessment and maybe you can reclaim some of that $550 cost in reduced property taxes. Depending on your local tax rate, it may not take long to recoup $550. For my local property tax rate ($0.7415 tax on each $100 assessed value), it would take one year for a $75k assessment drop to produce a $550 tax savings.

Keith

 

[deezler]

The remodel costs $100k for 1344 square feet, new roof, etc and then there is closing costs of $??k... 1344 square feet should add approx $140k... but the land & house are on a single deed/loan. House went up in value $115k, land went DOWN $75k...

Therefore, I am toast, plus I need to pay $550 for my wife's shattered dreams... this could cost me my marriage, we NEED the space...

There's only one answer then, Mossflower. Build it yourself! Or instead of a new second story, add onto the first with an addition.

 

[dave1949]

I see a lot of properties around here that are listed for well below what it would cost to recreate/build them new today. It's a great time to buy existing properties, much better than building new money-wise. The total tax valuation of our small town is down to what is was 10 years ago, so it isn't just individual properties taking a hit in value.

David: Maybe you could look into putting an addition on your house? Add two bedrooms and a bath? An addition would allow you to put sweat equity into your home easier than tearing off the roof and adding a second floor. Dig a footer trench, pour a footer and start laying concrete block, is my advice if you are in a corner.