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remodeld home with no heating

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DHBoggs

Thread Starter
Freshman Member
Joined
Feb 17, 2008
Professional Status
General Public
State
New York
Hello all,

My wife and I are in the process of purchasing by mortgage a home in a rural/small town area of upstate NY. The home is old but solid and has undergone extensive remodelling at the hands of a contractor. However, the renovation process was never quite completed and the contractor is selling as is. The remaining renovations pose no problem for me save one - the old heating system and oil furnace were removed but no new system put in. The home will not appraise for mortgage without a heat system. Three is no ductwork or piping or anything except for a flue in the furnace room. The contractor had an estimate made for a propane forced air system but its a bit pricey and less than ideal. I have been a fan of wood heat for a long time so my question is, would either a centrally located high efficiency fireplace, or one or two woodstoves meet the mortgage requirements? The house is not especially large - about 1200 sq. ft.
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
Most lenders require a conventional heating system before they will make a mortgage loan on a house in an area where central heat is common. I had a similar problem with my beach house, which had been heated by a stove. My solution was to install electric baseboard units.
 

Tom Barclay

Senior Member
Joined
Apr 7, 2002
Professional Status
Retired Appraiser
State
Oregon
The reason the mortgage holder requires something other than wood heat is that you must be home in order to feed the wood stove. Especially in upstate NY where it can get very cold; what happens when you leave for the day, or weekend? Frozen pipes, etc. Small electric units, either zone type or baseboard heat are probably the least expensive option, and can serve as a backup to your planned wood heat.
I heat my house exclusively with wood but I also have electric zone heat.
 

fritzvogel

Senior Member
Joined
Dec 16, 2004
Professional Status
Certified Residential Appraiser
State
New York
Install Electric Base Board units in each room. That will qualify for a mortgage. If you really like the place and plan on spending time there check out the new "out building" boiler units. Not sure how some lenders are dealing with these "Units", but I have inspected at least a dozen in the past year that have closed.
I'm not a HVAC guy but the "unit" is a "outhouse" looking boiler 20-100 feet from the main dwelling, it is fed with wood and the sales rep states it could "run" 3-4 days with out filling with new logs. Forget the copper, run plastic lines from the boiler to the house underground.
What where the old fannie guidelines for wood heat?....If you get sick, who is going to cut the wood and load it in the boiler unit?, If you go away for a few days, who is going to cut wood and load it in the boiler unit?, If it is foreclosed is the BANKER/LENDER going to cut wood and load it in the boiler unit till it sells????? Any fannie/freddie stuff I'm missing?
 
Joined
Jun 3, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
In the Colorado Mountains, many homes that are primarily heated by wood use electric baseboard as a back up system.

Hot water baseboard or radiant underfloor heating systems are the most comfortable -- an outbuilding wood boiler could probably be combined with an in house oil or electric hot water heating system. It would be pricey, but the discounted purchase price might offset the investment.

On the other hand, it's hard to beat a good wood stove in the living room.

Good Luck!
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
Why not simply make it a requirement of the purchase agreement that a primary source of heat be installed thus meeting the mortgage requirements and including such installation in the purchase price?
I would conduct a search in your area and find out which source of heat is the least expensive to operate. Heating oil these days seems very pricy, LP gas is subject to the same market fluctuations, and I dont know the cost of electricity in your area.
You can always install a high efficency pellet stove and use it as YOUR primary souce of heat but unless it is thermostatically controlled and not require your assistance to run it is doubtful it will qualify as a primary souce of heat, at least that has been my experience.

Good luck on your purchase.
 

DHBoggs

Thread Starter
Freshman Member
Joined
Feb 17, 2008
Professional Status
General Public
State
New York
Thanks Everyone. Your answers have been most helpfull. Electric baseboard heat seems like are best option at this point but I'll have to get an estimate. As for why the sellers aren't installing a heating system; it's simply that they have run out of money and have to sell as is.
 
Joined
Jun 3, 2005
Professional Status
Certified Residential Appraiser
State
Colorado
Following up what PE said --

After you get the estimate for installing electric baseboard heat, ask your lender and appraiser about writing a "subject to" report -- subject to the installation of the new heating system, with the lender escrowing the cost of the system until it is completed. It should only be a few thousand dollars, and it might solve the habitability issues.

You might be able to do the same with the wood stove -- but since it's not essential, an escrow might be more trouble than it's worth.

UPDATE -- get bids for other types of heating systems before you commit to one system over the other. While electric baseboard will probably be the cheapest, a forced air or hot water system will add more value to the home.
 
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Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I'd be cautious about spending $$$ in any kind of heating system before I owned it. I'd call my LOCAL bankers and ask about a construction to perm and finish the remodeling; or close with an in house loan to get it in my name, remodel it, then refinance.
 
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