Appraisal Update

Hi, friends! It’s been way, way too long, and I apologize for that (especially to our new followers — thanks for subscribing even though I’ve been MIA for a while).

It has been quite the roller coaster for us these past few weeks. I’ll try to be concise, but know that this has all been happening over the last month, so imagine the following, but drawn out to a point where you want to tear your own hair out — that’s pretty much where I’m at, mentally.

I mentioned in my last post about the low appraisal — apparently this is one of the top reasons that new-home sales fall through, and I truly did not know how much trouble it would cause. Because ours was so astoundingly low, we were encouraged by the builder to seek alternate financing when our original lender decided not to order a second appraisal.

During our discussions with the new lender, it was made very clear that they did not believe there was any way that the house would appraise for the full asking price. Based on our original purchase agreement, a low appraisal is acceptable grounds for the seller to walk away from the home without losing any of the down payment money. Because the builder was very adamant about not lowering the purchase price, that’s exactly what we decided to do — walk away from the house that we’d been dreaming of for the past eight months. It was pretty torturous, but it would have been impossible for us to come up with the cash to make up the difference between the appraised price and the asking price.

When we originally asked for our contract to be dissolved on the basis of the low appraisal, the builder was very adamant that it was our fault because we couldn’t get financed through a different lender (in actuality, the lender agreed that the first appraisal was sufficient, and wouldn’t be able to finance us on those grounds). There was a lot of back and forth, and in all honesty, both Troy and I were appalled by the way we were treated by Allen Edwin during these conversations. I’m a big proponent of professionalism in any business transaction, and the lack of it in this situation was one of the reasons we were fully ready to terminate our contract with them. Lawyers were involved, it was a mess.

While this was all happening, unbeknownst to us, our original lender was still working to get this deal to go through. They were working out a way for the first appraisal to be thrown out (originally we were told this wasn’t possible) and get a second one ordered. This all happened on the day that we were ready to mail the contract termination papers to Allen Edwin. Since we still desperately want to get this house, we held off terminating the contract and have agreed to a second appraisal. The builder is still very firm on the purchase price, but by doing the second appraisal, they have absolutely no grounds for holding us at fault if we do end up choosing to walk away. This means we would get back much (but definitely not all) of the money we’ve already paid toward obtaining this house.

So now we are waiting on a second appraisal to be ordered. I will admit I’m a little concerned about overpaying for this house — I continue to have that lender’s voice in my head telling me it’s not worth the price — but I have to believe that the second appraisal will tell us once and for all whether that is the case or not.

One other quick piece of the story is that, when we thought we were terminating our contract and walking away from the house, we actually went out and looked at some other houses on the market. I quickly fell in love with a home just a few minutes away from our original house. While no one can guarantee it will still be available by the time we’d be ready to put in an offer, Troy and I both agree that it would be a great “plan B” if the appraisal comes in low (again) and we have to walk away (again).

I apologize for the word-heavy post and the lack of photos, but since there is a very real possibility that we may not ever live in the house I’ve been blogging about for months, we’ve had to try and not become any more emotionally attached. This means not being present during the “fun” part of this process when all of our finishes are being installed — this in and of itself is heartbreaking, especially because I can’t share any of that with you guys! But no matter what happens, we’ll eventually have a beautiful new home to reveal — as for which house it will be, your guess is as good as mine!

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9 thoughts on “Appraisal Update

  1. What a mess! I’m so sorry you’re still dealing with this. Crossing my fingers that this appraisal will work out for you. (And that if it doesn’t, Plan B ends up being the one!) ❤

  2. Maria,
    I cannot believe you guys are going through this nonsense. It makes me wonder if AE is trying to artificially inflate the housing market for obvious selfish reasons. It just seems to border on Real Estate ethics violations in some ways. If AE determines a “pre-appraisal” is not required, doesn’t that put the burden upon them since the PE would also be a tool you could use to determine upgrade changes, when it’s still possible so you can make informed decisions. I can’t believe you have been treated so poorly by AE either. Do they not see the power of Social Media? Whatever happens please keep us informed. Also I know AE was really pushing their own financing company when we first signed on the dotted line for our home. Is this the second lender you are referring to? Hang in there and continue to be strong.

    • Keith, I can’t say we haven’t thought the same, about the artificial inflation. Since the first appraisal came back below the BASE PRICE of our model, I’m just not sure how they will close on any homes in this neighborhood going forward. The prices of houses in surrounding subs are much lower — for bigger houses, on larger lots. What do they think is going to happen? They will most definitely just sit on that house for who knows how long.

      In terms of a pre-appraisal, it will be interesting to see if they bring that up during this process. If we could turn back time, we would definitely opt to do it, but of course, hindsight is 20-20.

      We tried to make this deal work with two different lenders that AE recommended to us (one that I didn’t mention in my post because nothing came of our communications). The second (actually third) lender that I reference above is actually of our own choosing and seems to see right through these antics. However, I will say that the original lender, the one that has been working behind the scenes on our behalf, has been our biggest advocate, and has even burned some bridges with AE because they acted in our favor instead of AE’s — that was an AE-recommended lender, and we will continue to sing their praises from the rooftops because they have been so great throughout this whole thing. I’ll be sure to say more about them when I really dig in to the reviews I will eventually post regarding this whole process.

  3. What a nightmare! I’m so sorry you guys have hit a wall with AE but how wonderful that the lender is trying everything they can. I’ll keep my fingers crossed that the second appraisal does what it needs to do one way or the other.

  4. Maria,

    I am so sorry to hear this and was hoping that the appraisal would work itself out. I can’t imagine how difficult this would be. We had to have a pre-construction appraisal done before building began and while I am thankful they did I am worried that if they do it again we will experience the same as you are. Our first appraisal also came in low but our lender worked everything out well enough that it didn’t stall our process too much. Hopefully your lender can make something work and the second appraisal comes back in your favor.
    I have read reviews saying that as soon as something goes wrong in the building process and homeowners go on the defense Allen Edwin becomes extremely rude and unhelpful, along the lines of what you are saying. This is extremely unfortunate and not a way a company should conduct themselves, especially one that boasts high levels of customer satisfaction… Stick to your guns though!

    Fingers are crossed and good vibes are being sent your way!

    • Thanks so much, Katie. I do hope that you don’t have any future appraisal issues when your home is done, they are a nightmare! And while I am not glad to hear about the reviews, I guess it’s nice to know we aren’t alone? It really is just unfortunate that we will eventually add our experience to that growing list. 😦

  5. I just found your blog today doing a search on Allen Edwin homes. We actually are just beginning the process of building a T2300 with them as well, but in a different community. We picked a different floor plan for the first level, but your color choices/preferences also sound exactly like what we are thinking of doing (wood floors, gray and white interior, etc.). I was so excited reading your posts from the beginning of the process, anticipating our trip to the showroom in just a couple of weeks. Then I got to this last post, and was shocked! I can’t believe the appraisal came in even below the base price, and that they are acting like that is your fault. It makes me worry/wonder if we are going to have the same issue ourselves in a few months.

    Please keep us posted. I’ve bookmarked your page and will be checking back for updates. I’m anxious to find out what happens. Also any advice/tips you have for dealing with AE throughout the building process and this current debacle would be appreciated.

    Incidentally, our neighbors are moving into CHV, the neighborhood where it looks like you moved out of, this coming weekend. Small world!

    • Susan, thank you so much for the comment. I’m so glad you have enjoyed reading about our journey, and I truly hope these last few posts haven’t lessened your excitement. Never in a million years would I wish what we are going through on anyone, and I do hope your process is much more smooth moving forward!

      I’ll definitely be doing a special post devoted to the things we have learned during this process, but in the meantime… Depending on where you are in your own process, this might not be an option any more, but I can’t stress enough how much we wished we would have brought our own realtor into the mix early on, for the simple fact that we want as many people on our “side” as possible, especially when we’ve felt like Allen Edwin was blowing smoke. I think the biggest thing we have learned recently is to not be afraid to set your own deadlines and ask (repeatedly) for information you are entitled to — especially if they seem reluctant to give it to you.

      Since you haven’t gone through the selection process yet, I would urge you to bring up the possibility of a low appraisal with your salesperson even before you enter the showroom. Discuss the option for doing the pre-appraisal and if that might be an added layer of comfort as you move forward. Unfortunately, I know that we are not the only AE sub that is experiencing appraisal issues — again, I truly hope you are spared, but knowledge is power, and I also hope knowing about our struggle will allow you to ask the right questions so you are able to avoid surprises!

      I’d be happy to speak with you further if you have any more specific questions: maria[dot]stieve[at]gmail[dot]com.

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