Wednesday, June 16, 2010

Good Appraisal

The 2nd appraisal just came back good... at the original contract price... slightly above the amended price. We're now waiting for the underwriters to sign off on it and then we can set the closing date.

Guess it's about time to start packing!

Tuesday, June 15, 2010

Farm Pictures - Finally!

Finally uploaded the couple hundred photos of the farm off the camera... here are some good ones...

East side of the farm taken from the garden (where it looks all weedy).  Buildings right to left: House facing north... detached "other" building facing west... detached 1 car garage facing west (behind the little pine tree)... corn crib partially hidden by garage.... the big barn is in the background behind the garage and corn crib.  Old Dayton road is off pic to the right.

View of the farm house and outbuildings from the SE corner of the property.  The land planted in corn won't be ours til we pick up the option, but this gives you a VERY good idea of how big this property is!

View from the NE corner of the "Back 10" -- this is the additional 10 acre plot that is somewhat hidden with woods and a treeline from the road.  Currently share cropped but will be the first of the additional land that we "reclaim" for our personal use.

Part of the Kitchen.  The cabinets are custom made with virgin pine to match the 1 existing wall unit of original virgin heart pine cabinets (1916 built).  Several of the custom cabinets are extra wide and/or extra deep to accommodate things like pots, pan, crockpots and small appliances.  The one drawer under the dishwasher is big enough to fit a small child!  Kitchen also has a brand new oak wood floor.
view of the first floor bathroom... with marble countertop and shower threshold, large shower with double shower heads and beautiful restored wood floor.  There is also a wall of custom built cabinets behind the picture taker.
View of the living room area from the foyer.  Foyer has brand new premium carpet.  Living room/dining room (aka great room) has brand new pine wood floors, large closet, 2 matching chandelier lights and a matching ceiling fan, plus there is a built in 1916 built cabinet in the dining area.
More pictures later I suppose.  Literally Chris took almost 300 and we've been doing work on the house since then (finishing the bathroom, painting the mudroom, decluttering, etc.) so we're taking more almost every time we go out.
To update the process... the new appraisal was completed yesterday morning.  Now we're just in wait and see mode again until that report comes back.  We're expecting it later this week.  Stay tuned!

Friday, June 11, 2010

History IV: Catching Up to the Dream

The more we talked and the more we saw of the farm in New Lebanon (hereafter deemed "The Farm") the more we liked.  It was bigger than Germantown, definitely had more work done to it and thus less we'd need to do.  Although it had less land initially, the option made MORE land available.  AND we didn't have to wait to purchase because the purchase price was well within our current budget since we had yet to sell Cottage.  The only questions remained had to do with how to get it done.

The initial plan involved a discussion with Farm Credit, who held the mortgage on the property.  After a short discussion, we worked towards being able to assume the existing farm loan and then turn around quickly and refinance with Farm Credit to get the additional equity out of the property to finish paying the selling price.  At the same time, being worried that there wouldnt' be enough equity to fulfill the purchase price with that plan (knowing Farm Credit will refi no more than 85% of value), we also started talking to Wright-Patt Credit Union about a 5% down conventional loan.  Opted for locking in the 3/3 Convertible 30-year ARM rate at 3.5% instead of the Fixed 30 year at 5% knowing we would be refinancing in 18 months time.  We signed the contract on the intial purchase for $160,000 with $10,000 back from the seller.

Snag #1 was hit when Farm Credit informed us that their underwriters were concerned we would assume the mortgage then "skip out" on the seller for the refinance.  Somehow they thought A) that that was even a remote possibility and B) it would come back to bit Farm Credit.  They denied me assuming the mortgage based on those ASSumptions.  The loan officer (Megan) is outstanding and I look forward to working with them in the future... this just wasn't meant to work out.  So we proceeded on the basis of doing the 5% down loan with WPCU.

Snag #2 was a biggie and happened just a week ago (yes we're all caught up to current already!):  the Appraisal.  None of us had an inkling in our brains that the appraisal would come back less than $150 at a minimum.  Personally, I was thinking mid to high $160's would be the lowest.  We were all wrong.  Despite having a "farm girl" do the appraisal, it came back and shocked us all -- $126,000.  Megan and her appraiser at Farm Credit looked over it for us, I spoke with both Drew and the appraisal company manager and we all tried to figure out what happened.  Despite all of us coming up with new comps to give to the appraisers, they refused to budge.  She stated their appraisal was good, the comps were accurate, the property was "average" and simply not worth more than $126,000.  My favorite was when she described what would be needed for a "Good" rating -- and then proceeded to name things that have already been accomplished (new floors, new roof, new wall coverings).  When I mentioned that to her, she was adamant that due to things like the first floor bathroom not being completed, THAT was why the property was "Average".  I pointed out that those things would take less than a day to complete and could we do them before closing and having the appraisal changed.  I received a resounding NO.

Thanks to Leonard's connections, we are now working with a new mortgage lender.  Several people both in and previously in the business have assured us that the appraisal company (Stickleman, Schneider and Associates) have held a reputation for quite some time as being excessively conservative in their appraisals.  Lovely.  The terms with the new company aren't as nice -- a fixed 30 year loan with a slightly higher interest rate and higher down payment (10%).  They of course aren't guaranteeing their appraisal will meet the new contract price ($154,650 - adjusted due to legalities of the seller giving us money at closing), but all indications are that it should at least close the gap.  Fallback plan is that the seller will hold a 2nd note that will need to be paid in order for us to purchase the optional land.

So once again in the process we're in "Wait" mode.  We do have renters for Cottage all set up (minus an actual contract yet)... and the budget has been modified for the new Farm mortgage payments.  It all looks doable.  Now as long as the next appraisal comes back ok.

This weekend is the Stagecoach Days festival in town.  Chris will be running (run/walking) her first 5K tonight and we'll probably visit the festival sometime tomorrow.  In the meantime, we'll be busy doing all those little things that the previous appraiser dinged us on... to get them done before the new appraiser comes out.

Sometime soon I hope to post pictures of the Farm.  Have to download them off the camera first. :)

Tuesday, June 8, 2010

History Part III

History Part III:  Knowing When to Quit

When we last left our farm buying adventure we were searching for a buyer for Cottage so we could purchase this lovely 18 acre farm in Germantown.  Although the contract had expired on March 31, the seller had verbally told us she was waiting til the end of April before she did anything like relisting.  Cottage is a lovely first-time buyer house and the federal tax credits were extended to the end of April.

Unfortunately, while we had quite a few showings, the end of April came and went without a solid offer.  A week before we had discovered we could put my house up for loan assumption and while that generated interest, not enough to bring a qualified buyer to the table.  We spoke with the seller on the phone and found out some interesting information.  Turns out that the price tag she was adamant about reaching for the sale of the farm included not one but 2 loans -- the mortgage and a $40,000 personal loan.  So while we agreed that we could simply do a loan assumption on the mortgage, we still needed to find a way to come up with $40,000.  We spoke at length with the loan officer at Farm Credit and devised a plan -- assume than refinance to get out equity.  Unfortunately after doing some serious investigation, there was no way that plan would result in the entire amount we needed... at best, we'd still be looking at needing $25,000 (and looking at the plan in hindsight, we doubt we'd be able to cover much at all given the market).

It was at this time that I personally began to try and let go of the Germantown farm.  I had tried to offer the seller a payment plan deal on the 2nd loan, but she turned that down flat.  Aside from winning the lottery, there simply wasn't a way I could see that we could swing the financial end of the deal in order to buy the farm.  Much less that we still needed to sell Cottage in order to do it and had NO qualified prospects on the horizon despite constant listings on Craigslist.

2 days later I saw an ad on Craigslist for a farm in New Lebanon.  Needed to just drive to think a bit and figured I would drive by and see if it was worth dragging everyone else to see.  When I saw the place, it looked nice enought that I stopped to pick up a flyer... that's when the owner invited me in for a "tour".  2 hours later I left the farm, vowing to bring the family back the next evening knowing they'd be wow'd.

and they were.  That tour lasted 2.5 hours.  It's an interesting house, interesting seller and interesting deal.

Stay tuned for History Part IV... the end of the history lesson and where we catch up to the here and now....

Thursday, June 3, 2010

History (II) and Reading Lists

History Part II: Bigger & Better in Germantown

So winter was approaching.  We had a contingent offer on Cottage but the farm we were looking at purchasing was no longer available.  Time to start scouring again!  After the Villa, we decided that we definitely wanted at least 8-10 acres or more if we could.  The idea of having not only a large garden and some laying hens and horses, but possibly our own milk cow was taking shape.

Along came a 1905 built farmhouse on 18 acres outside Germantown.  The house was smallish -- only about 1500 sq ft... slightly larger than what we were in now, but did have a big kitchen, 3 bedrooms and 3 bathrooms.  And of course, there was the 18 acres!  They were beautiful ... slighly rolling, some woods, a creek, and all in pasture.  Unfortunately, we were going up in price so we definitely needed to sell Cottage first.  But, all indications were that we could still afford this farm.  AND the mortgage broker we were using was now authorized to process USDA loans and there was a 0-down USDA Rural Housing Loan that might fit our needs.  No down payment!  All we had to do was wait at this point.

January came and our buyer's credit had cleared up to the point that the mortgage broker and realtors all felt we were going in the right direction and the contracts could be drawn up and financials pulled.  We were set to close at the end of February on both places.  We would be "homeless" for a week as our buyer needed immediate occupancy while the farm seller wanted a week after closing to vacate.  No worries.  It would be worth it.  The inspection on the farm went STELLAR.  The appraisal however didn't.  At the time we thought poorly of the appraiser who stated the farm was a "working" farm which killed our deal with the USDA loan.  However, in hindsight he was trying to help us attain the appraisal value we needed for the deal.  It resulted in a lot of stress as I ran around and called different banks trying to get a loan that I could afford.  In the end, we talked about a loan assumption through Farm Credit and I thought we'd be ok.

Turns out all that stress and worry was for nothing.  Closing was scheduled for February 26th, but on the 20th, I got a call from my realtor that my buyer had backed out.  In hindsight, the fact that that inspection/appraisal period had come and gone without anything being done on Cottage should have clued me in.  We were devestated.  Buyer told 2 different stories -- having to renew her apartment lease and finding a FSBO she liked better -- so we don't believe her and have refused to release her earnest money back to her at this point.
Farm seller requested we renew the contract, contingent on the sale of Cottage of course, through the end of March.  No problem on our end doing just that as we wanted the farm.  Certainly didn't want to lose it because this buyer backed out on us.  We just kept trudging along.  Relisted on the MLS and had quite a few showings in March and April, but no offer.  The contract on the farm expired and I kept in touch with the seller directly.  She was giving us til at least the end of April before she tried to put it back on the market (coinciding with the end of the Federal Tax Credit program).

Could we get a buyer and work out the deal?  Stay tuned for Part III....

The New Reading List
A few days ago I received a catalog in the mail.  Acres U.S.A.'s book catalog.  WOW!  I don't think I've ever received a non-equestrian catalog that I've enjoyed so much.  Anyone who knows me knows that I love learning and am a sucker for interest related how-to type books.  I literally found dozens of books that are now part of my wish list... everything from disaster preparedness to livestock management to gardening to business advice.  The catalog is 80-ish pages with 5-6 books per page typically.  WOW!

I checked with and the library and found quite a few of them at either location and in some cases cheaper (but some not).  Some of them (like Seed to Seed by Suzanne Ashworth) I think will be fantastic reference books to actually have on hand... so I will be purchasing those.  Others I think are either going to be good reads or I need to see before I spend the money, so I'll be looking at the library for those.  I did request 7 of them from the library yesterday:

  • Milk-Based Soaps by Casey Makela

  • Growing and Selling Fresh-Cut Herbs by Sandie Shores

  • Small-Scale Livestock Farming by Carol Ekarius

  • Just in Case by Kathy Harrison

  • Handy Farm Devices & How to Make Them by Rolfe Cobleigh

  • Organic Body Care Recipes by Stephanie Tourles
In addition, the UDBB had a thread yesterday that named several books which deal with surviving after some disaster... so I added The Parable of the Sower by Octavia Butler to the list.

~ Tammy

Wednesday, June 2, 2010

History (I) and our first party?

Breaking up the history of how we got to the farm we're getting into a couple different parts (probably 3)... makes it easier to read and hopefully a bit less rambly.

Part I:  The Villa

Over the last couple years, we quickly came to realize that we needed a plan.  The kids were getting bigger and we were definitely outgrowing the house on Cottage -- a 2 bedroom, 1 bath, 1425 sq foot home on a corner lot 3 blocks from the civic center.  We wanted our own farm if at all possible.  So we set about doing what needed to be done.  In 2008 our "big" project was reroofing the shingle parts of the house.  In 2009 we did the gutters/soffits/facia (and evicted our tenants -- squirrels, birds and bats).  The plan was to do carpet and such after the winter snow/mud and then put the house on the market spring 2010.  As the saying goes... things don't always go according to the gorram plan.

In August we started looking at houses.  The idea was to narrow down what we liked/didn't like and what we wanted and what was available, so when the time came, it would be easy(er) to find something.  We came across a lovely 1970's built home that was fantastic!  3500 sq feet, 3 car attached garage, a detached garage/building all on 10 acres and we thought it might be within our price range.  So off we went to the mortgage broker to discuss options.  Well, the property was within our price range... but we would HAVE to sell the house on Cottage first.  Guess that moved up our timetable a bit!  We spent about 3 weeks doing everything -- new carpet, new paint, fixes, upgrades.  Cottage went on the market mid-September 2009!  "The Villa" as we called it would be ours as soon as we got an offer. :)

Then came the long wait.  We didn't even have a single showing until November 2nd... but that showing turned into an offer!  That's the good news.  The bad news was 1) the owner of the Villa had leased it out for a year starting November 1st and 2) our potential buyer had crappy credit.  #1 we didnt' have any control over.  #2... we accepted a contingent offer of sorts (nothing on paper) as she worked with our mortgage broker to get her credit up to snuff.  So our next steps -- look for another place for us and hope we either get another buyer or this one cleans up her act soon.

Stay tuned for Part II....

In other news, we are still waiting on the appraisal to come back but feel it went really well.  At least the appraiser "knew" farms. 

Spent most of the weekend out there in one fashion or another.  Got a few things accomplished.  Purchased our first farm-related item -- a Cub Cadet 29cc gas-powered weed whacker.  Realized my mistake at purchasing squash seedlings -- ended up with 18 zucchini, 18 acorn and 72 butternut!  Oops.  But we did get them all in the ground, along with another 8 cucumbers and 15 hills of corn and beans.  Took some walks around the property and relaxed on the porch or in the living room here and there (it was HOT out).  Gave a few tours to friends.  Drove the new barn van into town to grab lunch on Saturday (that was INTERESTING).  We also cleaned out the storage unit and moved all that stuff into the back room of the barn -- no more $125 per month rental fees!!  Took a TON of pictures of the farm on Sunday... but don't have them loaded from the camera yet.  Stay tuned for that fun.

Monday was Memorial Day.  We ended up with a few friends out at the farm to see the place and it evolved into an impromptu cookout!  Well, the grill needed to end up at the farm anyway eventually, right?  Had a great time and broke in Kookyduke's (the future bar in the barn) the right way... with some good food, nice drinks and fabulous friends.  Hopefully we'll be all moved in by the 4th of July and can really have a nice holiday party.