Thursday, October 13, 2011

Death of a Home Build

Before you get to start building and get financing from a bank, you need an appraisal, just as if you were buying any home.  The appraiser uses your house plans and elevation drawings to compare it to other houses sold in the area (as if it were already built).  The number of foreclosures in the area has continued to drive down home values, and like people attempting to sell their homes, we were going to be 30% underwater before we even built the home.  This, of course, negated bank financing.  If we had cash, we could still build, but we didn't have that kind of cash, and financially it made no sense to do so.

For a long time, my wife has been saying that there were signs that we should not build, but I was determined to complete the project.  This was the last nail in the coffin.  Sad, but true, we will not be able to build the house we worked so hard on.  Southland said they had experienced problems with appraisal values of other houses, but had worked through them.  I'm guessing the clients brought more cash to the table to offset the appraisal difference on some of the smaller houses, but we just didn't have that kind of cash.  This project was over.  Killed by foreclosures and banks.

We sent a certified letter (receipt required) letting to Southland requesting that the contract be terminated.  We received the green "receipt" card, but no further communication.  I can only assume that the contract is terminated, and no further action is required.  Ultimately, it cost us $2500 for the drafting and estimating.  They definitely earned the money, and I'm sorry that it ended this way.

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