Ugh. Can I say that a million more times? Ugh. Ugh. Ugh.
So the farm is dead. I was pretty depressed about it when it all came shattering down, but now I’m okay with it. Not in a “well, gosh I dodged that bullet yay” okay with it way, but more of a “totally not allowing myself to get screwed and oh yeah I’m not in a hurry so shove it seller man” sort of way.
Let me back up because this entire process has been complete shit. I rarely swear on the blog, though I tend to have a truck driver more swear words than regular ones mouth in real life, so you know it is bad when I do.
Before we got going looking at properties we reached out to the local lender known for covering properties of this size (did I ever mention the property was 67 acres????) for pre-approval. We knew what monthly mortgage we could afford, but weren’t really sure what loan amount we would be qualified for. We talked to an agent, gave her our information and got back a budget to work within. We felt pretty proud that we had been good consumers and did our homework.
Then we found this property and made the offer which was countered and we accepted. Reaching back out the to lender we were told that she was out for the week and nobody else could be assigned to us. Pretty crappy, but we just moved on to the next bank. That is when we realized things were not so good.
Our first dilemma was that the value of the property was in the land. Yes the house was new, but at only 1300 sq ft it really wasn’t worth that much. Regular lenders won’t mortgage when the land is more valuable than the building. We weren’t giving up yet though. We reached out to other lenders who typically handle the larger properties and everything seemed to finally be smoothed out until they got all our paperwork and realized Dusty had only purchased his business in July 2016. They require 2 years of business taxes when you are self employed even if you draw a regular salary from the business. That meant that his income, nearly double mine, was completely thrown out. My business has been around long enough, but the double whammy came down when they saw my salary. I take a minimal salary and pay myself in commission based on the profits of the business that month. Well, they can’t rely on commission so only my salary was taken into consideration. Which meant we now qualified for a shack in the ghetto.
Que up the drama, the anger, the frustration. Finally, after Dusty worked tirelessly contacting dozens of lenders we found one who would look at everything we made together and gave us a really great offer for a mortgage. The deal could move forward.
After all of that we decided to celebrate by announcing it to the world. I mean, we just jumped through about 1,000 hurdles, uploaded close to a million documents and got the mortgage secured. Surely this thing would go forward now.
The inspection went smooth as silk. The house was built in 2014, so we didn’t expect anything less. The only two things pending were the land survey (8k out of our pocket, let me choke a little on that) and the appraisal.
I didn’t even know when the appraisal was going to come in. The current owner had bought the place less than 6 months ago, so we weren’t concerned about it coming in for the price we were needing. It was pretty in line with other properties listed in the area for that much land. Imagine my surprise when the appraisal came in 25k less than what we agreed to buy it for. That is a huge deficit.
Now, I’m not one to cash in my chips and walk away without a fight. I’m also not one to enjoy bending over and taking it and I refused to pay out of pocket to make up the difference. Our realtor, who had been amazing to this point, started to get on my nerves as she kept insisting that the property was worth the asking price and that the appraisal was just really crappy. That may have been very true, but after an awful experience being upside in our house we bought during my schooling and taking a 45k hit when we went to sell because the market crashed after we bought it, I refused to be on the shit end yet again and pay more than what this was worth.
The seller insisted he had an appraisal from when he purchased it that was for “well over asking price” though he never coughed it up. My response was that he could then find someone else who may be lucky enough to get an appraisal higher than ours was for, but I wasn’t going for it.
The truth is that while we both adored this property, it wasn’t perfect. There was no barn. No proper fencing. No arena. No garage. The house was one bedroom shy of what we wanted. We were willing to overlook all these things and spend a few years making upgrades and improvements, but not on top of having to cough up 25k in addition to our down payment. It wasn’t worth it.
We said a sad goodbye to all the plans we silently made in our heads for this property and are now looking again. It sucks. I’m frustrated and sad and a lot of other emotions all rolled into one big ball of mess. Nearly tasting my own farm has made me hunger even more for it, but not enough to get screwed. I did learn one important lesson, get the appraisal before paying for anything else. Period. And now we know our exact budget and know what lender we can use, so that is good.
Now let me just go and drink my emotions away…..