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  • From: "Lisa K. V. Perry" <lkvp AT floydva.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] I think I sold the homestead
  • Date: Wed, 12 Oct 2005 12:46:59 -0400

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





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