Land we rent sold

[rox]

Alan. anybody ever tell you that you have bad real estate karma?
Is the whole property zoned residential? You paid for the appraisal, before you do anything else get a copy fot he appraisal. Often times sicne the bak orders the appraisal the appraisla companies jsut send it to the bank and you don't think to ask for a copy fo the written appraisal until closing. I worked in lending for 7 years, although it was like 20 years ago. What can be happening is that the banks has seen the appraisal which is clearly showing the defects in the house and the bank is getting nervous and wants to increase their interest rate becasue they are perceiving this as a hig risk loan becasue of the condition of the house.

Try a different bank and bring in the appraisal with you. It is true that loans on vacant land are typically for 10 years. That in itself is telling me that they are treating your application as vacant land and offering little to no value on the hosue. Is it possible to get the seller to come down in price? Now this is a different ball game as lenders consider this property to be vacant land for lending purposes and it does not qualify for a 30 year mortgage. NO WAY should the bank tell any realtor what the property appraised at and you should nto tell the realtor nor the owners either. it is your appraisal and the bank should keep this information confidential, if you have not reminded your banker of this you probably should do that.

Your banks and credit unions have to abide by certain lending standards to meet FDIC rules. remember the savings and Loan scandles when a bunch of bad loans were made and took down savings and loans and the FDIC had to bail them out and pay people their deposits? yeah well nowdays the rules are even stricter becasue of that scandal. Try talkng with another bank and then you will know if the ratio discussed is a "private policy" fo the first bank or is more or less a lending standard that all FDIC instituitions will have to ollow.

Another option is to seek lending that is not at an FDIC instituition (bank, savins 7 loan, credit union). Try here GE Money USA : Personal : Home Loans : Home Purchase

The good thing you have going for you is you now have an appraisal.
Don't give up yet, and don't tell more than you ahve to tell to anybody. Keep the realtor hanging and don't let on what you are doing. The realtor is always looking to put a deal together anyway she/he can in order for her to get her commission. You should be offered a different interest rate based on the amount of downpayment. if you put 50% down you should get a lower rate than if you put 10% down, keep that in mind. one thing also to remember is that lenders and banks want to loan you money, it is the only way for them to make revenue. deposits cost them money, loans make them money so they will want to do everything possible to make you a loan. there are creative way to do this. you could for example split the land to meet their ratios and get a 10 year loan on vacant land at probably a little bit higher rate, and a 30 year loan on a parcel with the house. my guess is that you need to find a hungry banker, but my gut is tellign me that if you are an excellent credit risk GE money is going to be much more flexible in this particular situation than an FDIC instituition. you will know more fter you talk to a second banker. When you request an appointment with a second banker specifically request someone who has been doing mortgages with this same bank for at least 5 years, you do not want a rookie in training.

Good Luck, i hope I have given you hope, don't throw int he towel, nto by any means!!!!!!!!!!!!

 

[EddieWalker]

I had to do a 15 year loan on vacant land with 20% down in my area. It was a variable rate with the first five years locked in, then it would change every year after that. I spoke with three banks and this was the best deal I could get.

I wouldn't listen to what the realtor says. They are out to make it happen as soon as possible. They don't care about what your payments are or any other issues with the place. Once they get paid, you no longer exist.

Is the home habital? What did the apraisal say it was worth?

Loan officers are just people. There are huge differences from one to another. If this one is giving you a hard time, start talking to others. This is where a good realator would be really nice. They know where and how to make these things happen. The bad ones just tell you to live with it and it's not that bad, or some other BS.

Good luck,
Eddie

 

[AlanB]

I read what I wrote, and I gave it the wrong "inflection" in my last post. I needed to add more information there, part of the problem with my typing.

I am waiting on pins and needles for the actual written appraisal, the appraiser called and gave my banker the heads up about the ratio, I think that was a good thing, and what I think they were giving me was a heads up that I would not need to pay for appraisal if I did not want to go further, that it was close, but I have to see where the numbers actually fall to make good decisions. So I went ahead and committed the money. I think it is taking a little extra time because I know the appraiser is well aware of all the different folks looking at this appraisal, and it will be a swing vote in some ways, so she is crossing her t's and dotting her I's so if anything comes up, she can fully back up where she is coming from.

I honestly believe that they are working in my best interest. Yes, they are making money off me, just as I make money off my customers, but I believe they are looking out for me as I look out for my customers.

My Realtors point, and I failed to write the whole story, was that it is appraising probably for well past what I have it bought for. We will see but it would not be suprising too see the numbers come in at 150. Her point was that even at the higher mortgage rates etc. I would be buying into a deal.

Even as I read back through what I have written, I have probably written more bad about my realtor then I should, and I hope you folks will excuse me, but those are the things that "stick" in my mind, maybe more then they should.

Our Realtor, has been a great customer of our landscape business for the past 13 years or so. Her husbands auto repair shop has helped our business out numerous times as well. Often with some good natured ribbing along with it, but when Hanna pulls in there with a problem with a mower, a truck, a trailer whatever, they get her fixed and on her way. While our realtor is in business to make money, again, I feel she is just like us, in our business and that is she wants to make money, but is really looking after our best interests at the same time.

She had said it when she did it, and I think I just did not catch the signifigance of the small words, but she put into the contract that it had to be approved for residential financing.... She realized the house value ratio etc. stuff, probably did not explain it too me as well as I wish she had, or maybe she did and I was not listening closely enough, but she wrote the contract to give me the "out" if needed.

Talked to Hanna at length this morning, and we will probably proceede forward either way. The reality is everything we find is going to have some glitches, if we got everything we wanted, we could not afford it. It is that old saying of, We offer three things, High Quality, Low Prices and Fast service, you can pick any two of the above.

Well, back to the pins and needles until the written appraisal comes in and some decisions have to be made.

 

[EddieWalker]

Alan,

Obviosly I read too much into your post and apologize for being so negative towards your realtor. She sounds like she's doing you good. With your long history of working with her, and her years of experience, it sounds like she'll make it happen and make sure you get the best deal possible.

Good luck and thanks for all the updates,
Eddie

 

[AlanB]

Man, I hate this real estate crap.

So I get the call that it is not a saleable loan. Then of course, they tell me they sent the appraisal to my realtor, and the Sellers Realtor.

NOW I am pissed. Let me get this straight. I paid for an appraisal, and the sellers realtor gets to see it, and you don't even send it too me....????????????? I hate hearing what is "customary"....

Sounds to me like you sent information I bought to someone else. without my permission... God this stuff tends to just Piss me off royally.

Anyway, it did appraise at 143 I have a contract at 120, The commercial loan guy is working the numbers to tell me what I can do.

Sleepless nights are upon me.

 

[rox]

Alan, Youa re totally right to be p*ssed off about the appaisal information going to anyone other than yourself. Only one good coes out of this, anyone reading this thread will remember to tell their lender nOT to share any apprasial information except with you and to go to the bank and get a copy as soon as it is done. That apprasial information the seller now has wich you provided for them has removed a whole lot of bargaining/leverage. You dould have maybe got them to come down even a couple grand becasue it won't appraise out as residential. Now they know the numbers and you are screwed (can I say screwed on TBN?).

The reasin it is "customary" for the banker to give the information to the realtors is becasue the realtors send them business. The lendor sucks up to the realtors in order to get mortgage customers directed to them. When a realtor has sent you 10 to 20 new ortgage customers the lendors get freindly and bend over backwards to make the realtors happy so they keep feeding him business. I just had the idea that the bank was going to give the appraisal information to the realtors, I am sorry I didnt' think to warn you earlier so you could have prevented it. Also at this poit I would want the original appraisal, not a copy. The bank can have a copy to work with and if the mortgage goes through them, you will bring the original back. If you ask for the original the bank is going to assume, and rightly so that you are now shopping for your mortgage and this then will motivate them to give you the best deal they can come up with. I would ot wait for them, i would take the original appraisal and go talk to another banker. It doesn't mean you fill out a full loan application and pay fees, jsut go talk to another banker with the appraisal in hand. Also I gave you a link to GE Money, my suggestion is to get a few more pokers in the fire for financing. This first bank can eat up a lot of your time and then if it is not to your liking you start all over 2 to 3 weeks down the road. You know the front guys at the bank are not necessarily the final guys to approve your loan. Depending on your bank it first goes through them, then up to a vP , then to a loan committee, so it can and will take time. Ask them exactly their bank process. A simple question like, "Do you have the sole loan authority to approve this loan?" In the meantime another buyer could come in. Did you ever hear the saying, "Don't put all your eggs in one basket?" I'll leave it at that.

 

[AlanB]

Actually, just got off the phone with the VP of residential loans,,, uhm, voicing my displeasure that something I bought and paid for was given to someone else. I guess I can take that and $1 and get a cup of coffee at McDonalds. As I told him, it is kind of late now to do anything about it. But I made it clear that I felt his, and his banks obligation was too me, the purchaser of the product. NOBODY else.

So I get kind of a mixed bag story out of the bank, and have to dig deeper Monday unless someone here may be willing to shed some light on it for me.

Loan agent says the problem with the loan is the value of the house, and ratio, compared to the value of the land. OK, so here I go through the appraisal looking for the value of the house vs. value of the land.... Cannot find it in nice simple terms.

Sooooo, call get her voice mail, then call and get forwarded around (Could be they heard it in my voice that I was pissed, well, maybe me saying I was really getting pissed about this whole deal had something to do with it) and end up talking with the VP.

He says he understands my confusion (I think he must be a politician) and goes on to explain that the problem is the "gross Adjustments" because of the differences in the comps keep this property from being sold in the secondary market.

Short version, the comps have a lot less land, so they have to adjust up to give me value for my land, like + $40 etc. so the gross adjustments get out of whack, that is what the VP said would keep the mortgage from selling.

OK, let me go eat. It gets more interesting with every phone call.

 

[gemini5362]

Alan I might suggest a couple of things. First of all demand to see the ratio of inhouse to second market loans. Banks have to keep a certain amount of loans inhouse by federal law. Second of all demand your money back for the appraisal if they sent it to everyone but you then have them charge them for it. I wondered what the comps say for your property. That is one way that appraisors work they get comps for surrounding property and then they add or subtract differences to make it equal. It sounds like you have a good relationship with your realtor ask them to pull the comps of other equal pieces of property. Most realtors have access to a multilisting service and that is where the appraisor gets his comps from also. Ask the realtor what the house is worth without the land. My wife is sitting here telling me that Fanny mae requirements for secondary loans sets those ratios. If your bank wont give you an inhouse loan look for one that will. Your realtor should be able to help with that. Finally if all else fails look for a good loan broker. I normally would not recommend that but I sold a house to someone from out of state they had used a loan broker to get them a loan due to my client going bankrupt 6 months previous. The loan broker got them a loan. When the house they wanted was 10,000 more than they were approved for I called the loan broker and left a message to see if they could qualify for the extra amount. The next morning the loan broker called me back and told me that he had it aproved. He also gave me the name of another person in his office because he was getting married in about a half hour. I was impressed that just before his wedding this guy took care of my client. Some loan brokers work very hard at their job and might be able to help you with your problem.

 

[AlanB]

OK, maybe I have someone's attention at the bank, I had called my commercial lender and told him to start looking at it and seeing what he could do. He called me at 1715 or so and said he had just got out of a meeting with the VP I had voiced my displeasure with, the residential loan officer and the bank Prez. (don't know if they have multiple ones or what) What we are going to try and do is parcel out the land, and basicly make 2 acres the house, and it should comp out fine, with very little adjustments, and then 7.5 acres or so just land, that I would have to get the commercial loan for.

He thinks it can all be done without involving the seller.... Which is good as they are holding an appraisal that says the property is worth $143,000 and I have a contract on it at $120,000. I doubt they are going to be too willing to deal.

I can also walk away at this point, and pay my $500 to the bank for my loan app, get my letter that says it will not go residential financing, and walk.

I think we are going to dig in a bit deeper and make this happen. At some point I have to step up and make progress. While I can buy something more complete, it will also cost a heck of a lot more up front. My agent just showed me one that she said was "perfect" for me, and it was, fresh remodel, beautiful, creek on it 5 acres, 40 X 60 powered shop, and on and on...... $289,000 and we are both betting it will sell within the next month for $275.

Hanna and I have been watching all these flip this house shows, and been talking about it for years, well, I think it is time we put some substance behind the talk.... Course it could drive us to bankruptcy

So what we are going to try to do (actually the commercial loan guy is putting together) is something like the house and 2 acres, and buying it at 50 on the fixed good interest. Then buying the other 7.5 or so for 70K on a commercial loan with some interest in my current house. It will cost me probably an extra $500 or so to make it happen, but.... if it all works, it will be worth it.

Cross your fingers and your toes cause here we goooooooooooooooooo

 

[AlanB]

Gemini,
Depending on where we go with the loan, the money for the apprasial will be discussed. I will eat it if they make this loan happen (and it looks like they are at this moment)

I will ask about the ratio of in house loans, but I would bet that I would keep the absolute cream of the crop in house, if I had too keep any, and resell everything else.

I was told by two banks, mine, and the one I am dealing with now, that nobody in town keeps any loans any more, but I will have to ask that question point blank.

My realtor and I had a long talk about comps, and she is not finding "better" ones or more accurate ones either. And the sellers realtor is not either for that matter, and really it is in both their interests to make it fly through the residential financing as technically I could walk from the deal at this point. The problem is there are very few small houses in the area with lots of land, when you get lots of land, generally you get a larger house, or when you get a comparable house, you get a little city lot. Then to make those things "comp" you have to start making those "adjustments", so on my bottom line, on my 3 comps I have gross adjustments of 73%, 26% and 60%

One of my original thoughts was to get a different appraiser, and get it redone. Everyone involved so far has said that the lady that did the appraisal was very fair, and probably found the best comps available, and I would almost certainly be tossing another $500 away to get another appraisal done.

She priced the land at 90K, so that makes the house worth 53K on her appraisal. My realtor had originally said the house was worth about 50K so I would say she pretty much nailed that one. She (my realtor) undervalued the land a bit and I probably overvalued it a bit. The 1.5 acres of vacant land next door sold for 19K last month. The 10 acres just down the street that is wetter and uncleared then what i am looking at is for sale at 14.5 an acre.

The problem will be though if better comps don't get sold, if I keep it at the size acerage it is on, I will have problems if I do not subdivide.

I think Rox said it best, I have bad Karma... on this stuff.

I was told there was one other bank in town doing in house stuff, and they are actually a couple towns over, and they do land loans etc. I tried to call them throughout the day today, and never spoke with anyone, and left several messages. At some point, with my personality, that is NOT the bank I should deal with, I could not handle it.

My bank (with my current home mortgage and my busines and personal accounts at, not where I am working with this loan) is a very large bank and even when we worked with them, lets just say they were less then eager to make land loans. Home mortgages OK, but commercial land they were a lot more reserved about. Neither my wife nor I were real impressed that they were going to do a lot too help us make this happen.

The bank I am dealing with on this loan, and particularly the commercial loan guy, seem to be the most aggresive and lean forward to look for ways to make this happen. Yep, he is making money, but he has too, just as I do.

At the moment, if they can make this split deal work, I will probably go that way. Then when I can flip my current house, I will probably almost totally own the land part, and have a 30 year fixed low interest on the house and a little chunk of land.

It looks so easy on TV, and we have not even got too the work part yet.....

I think the aggravating part for me, is that so much of this is beyond my control, I am sitting on my hands waiting for someone to tell me what I can or cannot do.

If I have to dig around the basement, do parchmant, and drain tile, compact each lift, etc. etc. Hey, that is something I can make happen, call my buddy, borrow a track hoe, a dozer whatever, go to Lowes, buy the materials get the rock dropped in,,,, I am in control,,,,

This part of the deal, I am just along for the ride, and writing checks and then they give my stuff away because it is customary........................