Expecting to close this week on my new house back home, I was given bad news. The bank's appraiser submitted his report. The value was actually above what I'm paying - HOORAY! The issue is that his quality/liveability rating was a C5, second to worst and 1 notch below what FNMA accepts - meaning the bank could not give me a loan because they couldn't sell it. The report highlighted the fact that there are no kitchen appliances and significant deferred maintenance. I knew about all of these and didn't think of them as a hindrance. His biggest reason to grant the C5 rating vs. a C4 (which would have made my loan approved) was that the front door doesn't lock because it was kicked in. I knew it didn't lock and asked my realtor to get it fixed right after making my offer in June! After a bit of glue and screws, the door is lockable and we should be on for a closing next week.
The thing I don't understand is why this quality issue comes up at all. The value estimate already accounts for the quality/condition of the property! Why double count quality!?!? As I deal with this setback I'm comforted by the idea that I'm getting a good deal on the house and the value will easily increase with a bit of sweat equity. My wife and I can't wait to renovate the house. We have some big plans in store!
The thing I don't understand is why this quality issue comes up at all. The value estimate already accounts for the quality/condition of the property! Why double count quality!?!? As I deal with this setback I'm comforted by the idea that I'm getting a good deal on the house and the value will easily increase with a bit of sweat equity. My wife and I can't wait to renovate the house. We have some big plans in store!
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