Homestead mailing list

["Lisa K. V. Perry" <lkvp AT floydva.net>]

WSM311 AT aol.com wrote:

> Time to beg Gene for advice again!
>
> A couple who I know and like have offered me $150,000 cash, plus will pay  
> off $30,000 over two years through owner financing. I'd like that financed money 
> to go to Heather for her place.
>
> I haven't signed anything with a realtor yet, so need to get a lawyer to  
> help complete the transaction.
>
> Any advice for me? I could still sell it for more, but would rather it goes  
> to these folks.... and the cash payment is nothing to sneeze at.
>
>  
Wendy, it may take a cash transaction to sell your place because it's an 
underground home.  If a borrower had to secure financing with a 
traditional mortgage, it would mean any comparables (comps) for the 
appraisal would have to compare like with like, in other words, an 
underground home (yours) compared to very similar housing sold in the 
last twelve months (but with emphasis on the last six months in 
particular).  You know your area, do you know if there are homes similar 
to yours that have sold in the last twelve months?  The lender *may* be 
able to use a ranch or a semi-bermed home as a comp, but the 
underwriting and rules used are getting pickier with each passing day 
and appraisals are really being scrutinized.

By selling the home yourself, you would net $180k total, which is 8k 
less then you'd have after paying a 6% Realtor's fee if sold at your 
asking price of 200k.  If you work with a Realtor, you would have more 
money in your pocket if the home is sold at your full asking price (or 
perhaps more than your asking price), but it may still take a cash Buyer 
in the end.  If the Buyer can work with a very local bank who keeps the 
financing in house and doesn't sell the loan, then there is a good 
chance the Buyer could get financing that way.

I very recently tried to refi a semi-bermed home (sod roof w/steel beams 
and concrete, open on the ends).  We had decent comps, one-story ranches 
and one other semi-bermed home, but the underwriter I reviewed the 
scenario with told me that things had become so tight in underwriting in 
the last year+ that she didn't think it would go through.  I had to pass 
the deal on to a local bank that kept the financing in house, but even 
the local bank is getting pickier.  That's one thing that just kills me 
about my job, I live in an area that is rural/suburban with log homes, 
build-it-over-time homes, semi-bermed underground homes and brick 
ranches and traditional farmhouses and the like...and we all like our 
acreage.  I can't get financing on anything that is out of the realm of 
"normal" thanks to Fannie Mae and Freddie Mac.  Neither GSO (gov't 
sponsored org.) barely  recognizes properties that aren't urban, 
suburban or a traditional brick ranch or farmhouse on less than 10 acres 
in rural America.

I hope this was of some help.

Lisa