Appraisal
Before a bank loans you money to buy a house, they want to know what it is worth… The same is true for building a house. They want to have an idea of what the final house is worth. They especially want to make sure that they don’t loan you more than 80% of that “appraised” value. If you were buying a house, the appraiser could go look at it. If you are building a house, you need to fill out a lot of paperwork to help the appraiser “imagine” your house. We did that and submitted the paperwork near the end of March. It was very detailed and covered everything from the finish on the floors to the make and dimensions of the appliances.
The appraisal due back on Easter Monday, but took an extra week. There was no guarantee that the bank would loan us what we needed for our rather unusual house, so we had decided we didn’t want to spend thousands on permits before getting the appraisal back, but we were getting the permit paperwork ready to go.
When the bank finally did get back to use, they had estimated the value of the home at about 20% less than it would cost us to build it… This dropped the amount they would give us by a fair chunk of change. We thought about it (and prayed about it) and eventually decided that we thought it was still worth building and we would just make up that difference ourselves.
I had hoped to keep our extra cash reserves in case something went wrong. Now we are planning to use that money, so we are now planning on building with much less of a safety net and I will need to keep an even closer eye on costs.
On the positive side, with a lower evaluation and a smaller loan, we will pay a smaller closing cost, pay less for insurance, less taxes on the property later, etc.
Then the actual appraisal paperwork came in the mail so we could see exactly how the reduced value had been calculated… I was pretty disappointed. We had spent so much time on our half of that paperwork, but the appraiser was not so careful and seems to have just made up his own facts. For instance, he said the home was on a public dirt road, when really it is a paved private road. He was 1 bathroom short for the house and 1.5 cars short for the garage. He wrote down double hung windows instead of casement. He said it was 1 floor with a full basement instead of 2.5 floors with a partial basement. He magically added a walk out basement and a fireplace. He reduced the basement floor space by 20%. We found major mistakes in 11 sections of the report.
I sent a full summary of the mistakes to my loan officer (who is on holiday). I guess we will find out what he says on Monday.
Permits
Once we decided to go ahead (even with the 20% reduced valuation), it was time to start rolling out the permits. Maybe I will eventually put up a page to explain how that all works, but basically some permits need to be done before others. In fact the final building permit requires the permit numbers from the earlier permits. The permits need to be submitted to 4 different buildings (state, county, township and city). Different offices are open on different days.
Everyone I met with in the various offices was very friendly and helpful. There were few or no lines (which is probably why each office keeps such short hours). The big problem was just having to drive around.
The first permit needed is a soil erosion permit. I needed to create a “soil erosion control plan” and apparently they send out someone to check the site from time to time (at 95$/hr). If the plan fails or I don’t follow the plan, I will be fined. The permit said I had to submit it to the county, but when I got there they told me that for my particular township within the county, I needed to fill out a completely different form and take it to the township office (20 miles away) which was only open on another day. The new form required most of the same info, but was laid out differently. I could reuse the same “plan”. The cost of the permit also dropped by more than half, which made up for the extra hassle.
I also needed to have a soil study done. It cost about $360. However, we had found that the previous owner had already had one done 15 years before. I talked to the septic permit people and they said they would honor the earlier study.
The driveway permit (also in its own building) would have cost over $100, but it turns out we don’t need it because we are building on a private road.
The guy reviewing our septic permit was nice enough to come out and talk to me before I left the building. He pointed out that my topo survey (which cost me $1200 a couple years ago) was not sufficient because it didn’t have the boundary stakes marked with the little “s” or “f” (for “staked” or “found stake”). I would need to have it done again… Well, it turned out that the previous owners had already done that also. I was able to find their old survey and the county accepted it.
There was some issue because our address was not properly in anyone’s system, so we had to go to the city zoning office to get an official paper stating that was our address.
Anyway… Most of the permits are in. I am told it will take a week to 10 days to get things processed. When they come back, I can assemble the final permit applications.
In the mean time, I dropped the plans off with the township inspector. I already shared a digital copy with him last year, but this feels more formal.
Tractor
I would love to have a decent compact tractor on site with a front end loader to move dirt and perhaps forks to help unload trucks and maybe even an excavator arm. I visited a few dealerships and have been searching craigslist for weeks. I didn’t find much available.
I could go with a used tractor for about $10,000. When the job is done, there is a good chance I could sell it for almost as much as I bought it for. On the down side, I would need the $10,000 up front and I might get a lemon.
Or I could go for a new compact tractor, it would be a bit smaller and would cost about $20,000. However, I can financing with interest free payments for 60 months. During the actual construction period, I would only need to pay about 340$ a month. Also, the new tractor would be covered by warranty and I wouldn’t have to worry about hidden problems…
I am going to try for a cheap used tractor… But I want a great deal, not just a good deal.
This weekend, I plan to head out to a tractor auction and see what I can find.
Website
I have been having trouble with this website. For instance, it has not been sending out emails to subscribers… I spent about 2 hours tonight working it out. Some of my plugins and failed and I needed to learn how to delete them and replace them. Hopefully I didn’t ruin anything.