- Joined
- Jan 16, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Colorado
Just got off the phone with a very irate homeowner. His lender faxed me an order with a 'needed value', and as soon as I looked at the comp sales and county records I knew we had a big problem. 8O
7 months ago he bought the older home on one acre, and at the same time a vacant one acre lot next door to it. The guy has been pouring money into the the separate vacant lot next door to improve it as horse property (barn, excavation, expensive fencing), as if the improvements are an extension of the actual one acre home site. Now he wants to refi his home for $60,000 more than what he paid in February for both parcels, and has done almost nothing to improve the home itself or the one acre that it legally sits on.
Needless to say, he was not happy when it was explained to him that if he gets a new mortgage loan on his house that the appraisal could not include the improvements on the neighboring property unless the plots were legally combined, and even then it was no guarantee that his property would be worth that much more. There are comp sales with homes on two acre horse properties that would suggest otherwise. The guy thought that the refi would cover his improvement expenses and give him an extra $30,000 to fix up the house. :? 8O
Not.
The house and one acre are probably only worth about $5,000 more than what he paid for it.
What a terrible lesson. I think this man thought he was building his own little empire and is now in financial trouble simply because he didn't understand how things work.
7 months ago he bought the older home on one acre, and at the same time a vacant one acre lot next door to it. The guy has been pouring money into the the separate vacant lot next door to improve it as horse property (barn, excavation, expensive fencing), as if the improvements are an extension of the actual one acre home site. Now he wants to refi his home for $60,000 more than what he paid in February for both parcels, and has done almost nothing to improve the home itself or the one acre that it legally sits on.
Needless to say, he was not happy when it was explained to him that if he gets a new mortgage loan on his house that the appraisal could not include the improvements on the neighboring property unless the plots were legally combined, and even then it was no guarantee that his property would be worth that much more. There are comp sales with homes on two acre horse properties that would suggest otherwise. The guy thought that the refi would cover his improvement expenses and give him an extra $30,000 to fix up the house. :? 8O
The house and one acre are probably only worth about $5,000 more than what he paid for it.
What a terrible lesson. I think this man thought he was building his own little empire and is now in financial trouble simply because he didn't understand how things work.