Tuesday, February 8, 2011
Bad news. Our buyer couldn’t get her mortgage. Two days before closing. Not because of her credit. Not because of her income. Not because of the appraisal. All of that was fine. It was because of something totally ridiculous. We’re zoned agricultural. And I guess FHA doesn’t give out loans for property in rural areas.
My buyer can’t get a conventional loan—she’d need a 20% down payment and she doesn’t have it. FHA requires less money down. She’s not selling her house to buy this one, which is what most people to do to come up with that kind of money, in this case, about $52,000. Her house is a doublewide that needs some work and she was going to sell it later, at her leisure. This enabled her to give us thirty days to vacate the premises, a big plus when you’re moving a whole farm to another state and to a fixer-upper. Everyone was happy.
In the beginning of this process, what I was worried about was the house appraising for the proper price. It’s a tricky property because it’s a horse farm and comps are hard to find. I called the buyer’s banker, Bill Reynolds from Fairway Independent Mortgage Corporation, to make sure he was aware of this. I asked him to send an appraiser who was familiar with horse properties and who would understand the value of a real horse property and not compare it to a house with ten acres and a shed out back. I stressed this was a turnkey working horse farm. So he was aware of the nature of the property from the beginning.
But he let it go all the way to closing. And now everybody’s lives are in upheaval. I can’t tell you how this has screwed up so many people in time and money. One example is how Bill made us put in electric heaters upstairs, even though it is warmer up there than it is downstairs. That cost us five hundred dollars. It was totally unnecessary but we figured if that’s what they wanted, we would do it. How about how we had to stop work because we’re supposed to be leaving and now we don’t have jobs? What about the seller up in Jersey who is in financial hardship and is counting on us to close on Tuesday? I could give you dozens of examples how this has hurt us and other people. It’s just too long and upsetting to write.
My buyer was so upset she asked me if we could change the zoning. I said I didn’t think so but I would call the zoning department just in case. The zoning officer couldn’t believe it either. She said most of the county is zoned A1—agricultural, and single house dwellings are permitted. In fact, most of the state is zoned agricultural. Agriculture is our number one industry! FHA only gives out loans to people in cities? If that is true, Bill doesn’t know the products he is selling because he knew this was a horse property from the beginning.
And now I may lose the winery house because of all this. I have some other people interested in the farm, and I know that I’ll sell it sooner or later, in fact, I had a drive-by yesterday, and I have somebody coming over on Friday, but to go through this whole process all over again… it just might take too long and the winery house will be gone.
Of course I should have known the bank would screw it up. Just like they screwed up the whole country.