Thanks all! We put an offer on it today…nervously awaiting a decision!
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So we get 3/4 of the way through the process and all of a sudden the banks don’t know how to value this (breathing deeply). Apparently this is not unusual but I want to scream “am I the only one who wanted to think about this ahead of time”???
Apparently, also, yes.
Can I just say I hate this part of the process? It seems designed to make a few people money and give everyone else ulcers…
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I’m a lender, and I understand your frustration. I’m sure your appraiser is having trouble finding “comps” for your unusual property. Appraisers are also currently stupid busy in most parts of the country because the housing market is so hot. They can appraise 3 normal properties in the time it takes to do the research on yours. You might talk to your lender about throwing a little money at the problem if getting the appraisal picked up is part of the issue.
Real estate transactions are ripe for problems. I certainly commiserate with you as I enter my FOURTH month under contract on a horse property. And I’m paying cash. And I work in this industry!
Let me know if there’s anything I can help you translate. Between Title and appraisal and loan program I’m sure you’re swimming in jargon.
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I once was a bank officer back in the olden days… the huge barn would be a major question mark on a residential loan application because of the barn’s potential to devalue the primary asset …the house
Really if the Barn was called a Garage this whole process might leap forward
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Thanks. As it turns out appraiser #1 just punted. Didn’t even provide an appraisal. I don’t know how that’s ok, but what do I know 
Apparently appraisal #2 has been ordered. Deadline is a few days before the closing date and I’ve advised them all this has to happen so…
I know the banks have risk - I understand balance sheets well, I am, after all, in business. If this property were 30 miles out, making it less desirable, it would be easier to comp. I find that annoying at best.
What I am struggling to deal with is how late in the process this all occurs. It’s well beyond when people have to rearrange their whole lives to make this work. I know it’s not personal but man, talk about stress. If things get delayed or canceled I’ve got horses to figure out where to put someplace, movers I’ve paid a sizeable deposit to…oh, and I’ve already sold my house so…I’ll be homeless. Not the time you want to learn that they “can’t figure out how to appraise the new house”.
Grumble grumble grumble.
I did mention that to the real estate agent. Apparently mentioning it the first time was not enough despite me even explaining that I had been concerned up front.
I’m grousing now. I just hate not being directly in the deal.
Thanks for asking!! The results from appraisal #2 are due in the 15th, but apparently this time the appraiser actually went onto the property, into the house etc. The first one didn’t do that which is…difficult for me to understand (at best). We’re supposed to close on the 19th so it is down to the wire. Our current home closes (sold) today so though we can stay here until the end of the month, we’re technically going to be homeless after today. Sure would like to know that the farm is going to go through laughing
I’m wondering if this is why so many horse properties “die”. This purchase process is brutal. Ag financing won’t look at it because it’s not rural. Commercial is hard unless you already have a farm. In addition to the temptation of selling to the highest bidder, it’s HARD to buy one of these (or conversely, sell it, if you want it to remain an equestrian property).
If we could fix this, that would be good for the industry, I think!
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the only ways I know that can occur is keep the place forever or it needs to be in equestrian development that is protected with deed restrictions and covenants that prohibit subdivision of the particle
It’s just sad. This process is definitely not helping. I could never have navigated this as a young professional. I’m old now, so it’s slightly more possible, but as a 20-something? Never.
Oh. My. God.
I’m not sure I can imagine a worse update…ok, I’m being a bit melodramatic, but this is not good.
At the 11th hour, appraiser #2 claims he can’t appraise the house as residential, and we have to go commercial. The problem with that? We’ve sold our house, and though we got an extension to live here until closing (next week) we’re homeless after that.
My first idea was to do the loan under two deals (it’s technically two properties). The first is just the house and a tiny bit of land, the second has the barn and accoutrements. If we can get just the house financed, then we have a place to live and then we can rent the barn until we can secure commercial funding for it. We’re waiting for the appraiser to do some sort of appraisal on just the house to see if this is a viable option.
Then this morning, I found and contacted United Ag Loans and he said that he thinks he can qualify the whole property under the Hobby Farm loan program. If this works, then we might be able to rent the farm and close in 30-45 days. Otherwise, we’ll…I guess…be homeless. He said that he encounters this ALL the time - mortgage officers think they can get the loan through, and then they fail, leaving the borrower in the lurch. The big challenge with this one is the downpayment amount necessary. It’s larger than we have in just cash, so we hopefully will have enough assets to withdraw from retirement funds to cover.
So it’s not a sure thing either. Just a “hope this works”.
I’m devastated. I sold my wonderful home that overlooks the water well ahead of time because the real estate agents pushed and pushed, and the mortgage loan officer said he was 99% sure all would be well, to buy my dream property and now it is a possibility we may not have any home. I spent quite a bit of time first being angry then sobbing last night. I ASKED up front if this was going to be a problem. Which is why I asked about the appraisal here. I did everything I could to try to help this deal go through and the one thing I didn’t know is that the loan officer and real estate agents had no idea that this could be a problem. In addition, at least one of the agents involved has EXTENSIVE experience with this type of property - surely she knew.
The packers are coming tomorrow to put everything in boxes…I guess I still have to move out so it’s worthwhile. My husband was getting me this farm “for my birthday”. I guess homelessness is a great birthday present too. I’m trying to maintain a sense of humor about this whole thing, thinking that maybe, just maybe, this will be a HIL-AR-IOUS story to tell someday and not just a cautionary tale.
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Hang in there @Alterration! Breathe… I am sending all my good vibes your way. And Happy Birthday.
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OMG. That is so annoying!
Once I ended up With a gap between properties and we ended up in an extended stay place for a few weeks. It was good because it had a small kitchen. Might be an option.
I ended up staying a few extra days as the farm was so FILTHY. Sellers left it a complete mess, it took me days to get it half sanitary.
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I’m looking at those - one of our biggest challenges is that my horses also have to move this week and I have an elderly dog who is…struggling.
I’m wobbling between “make it done” mode and rocking in the corner. I’m just kicking myself for trusting any of the parties involved. The sad thing is that I frequently get feedback at work that I’m too paranoid and try to take on too much, that I need to “trust others” more…but this is why I don’t!!
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Oh jeez, that sucks big fat hairy ones. Should be such an exciting time, and other people are making it a nightmare for you.
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You will sort this out. And enjoy (a belated) birthday margarita looking at your horses from your house and it’ll be worth it. Hang in there.
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I’m so sorry you’re dealing with all that stress. Very frustrating situation. I would be scared/paranoid too. This is a big deal. Many jingles.
As a loan officer, I’m quite surprised. Lending institutions vary, and I work at a credit union, but I’m shocked that it’s gone this far and now the acreage and appraisal are a problem. Lenders want certain kinds of appraisals, different official forms, for certain kinds of loans. Conforming conventional loans are limited to a small amount of acreage that can be used to add value to the appraisal (that must be issued as a certain appraisal form) and must have residential zoning. Anything outside of those parameters is a hard stop. I’m able to tell people up front about guidelines for different loan products. To issue a conditional approval letter after receipt of a sales contract for a farm and a house, and then be like oh we can’t get an appraisal on this is, mind boggling. I would be beyond mortified and certainly reprimanded by my leadership.
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Double post to add that if you were my member, I would have advised you that your first idea would be the only way I could offer you loan products to secure those parcels and that if it were me I would inquire with the sellers regarding combining the properties prior to closing depending on sales price and estimated value of the house itself OR to inquire with a provider specializing in farm loans.
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Oooph. I’d be telling my agent and broker that they can send me a check for the rental I need that is all their fault. Good lord. Sounds like multiple people were incompetent. I’ve had this kind of situation before, but not with real estate, so I feel your pain. I would have zero qualms about ripping these people a new one.
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We had to go with Farm Bureau because no one else would insure our farm. We have a loan from one of those AG First banks (which sold it later, lol). Farm Bureau knows appropriate appraisers.
Can you contact the county extension agent for recommendations? They know farms. If the county is too urban, try the closest county with farms. Just an idea.
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