Cohousing-L Mailing List: Re: Construction Loan Financing (appraisals/resale)

[Jim Snyder-Grant (danasg]

Just a comment about appraisals and resale values, based on the quoted
exchange below between Denise & Rich:

At New View (Acton MA), we also had appraisals less than construction costs. 

As houses sold at their real-cost prices, people that got later appraisals
for individual mortgages (and later, refinancings) saw appraisals that
reflected the actual comparable neighborhood house prices. Later, when we
had our first resale event, the sale price easily matched the actual cost
plus some home improvements the owners made plaus some interest. 


At 11:06 AM 2/19/99 -0600, you wrote:
>Denise Meier wrote:
>
>
>they required 20% of the APPRAISED value of the project, which was
>considerably less than the COST of the project. We each (except for the
>two subsidized low-income units) ended up putting in 35% of our projected 
>purchase price, plus paying for upgrades and change orders in cash.
>
>
>Denise: I hope you meant "... which was considerably *more* than the COST
of the project...".
>
>If your project appraised for a lot less than the cost, the permanent
financing (or 'take out' loans) for each house would only cover a portion
of appraised value and you would have to have a significant cash down
payment. Could be done, but would not bode well for resale values.
>
>Rich Lobdill
>Tierra Nueva Cohousing.
>
-Jim Snyder-Grant, using my wife's email to belong to cohousing-l. It is
more relaible to reach me at
jimsg [at] newview.org (home)
or
Jim_Snyder-Grant [at] lotus.com (work)