Spec home deal is dead

[Candace Ellison]

I have been working with a GC to build a spec home for me and was able to secure a construction loan with my bank. An appraisal was done and title work completed only to find out the house that was suppose to appraise for 140-145k only appraised at 122k. The builder has completed this same house in a less desirable area (the hood) and that appraisal was 139k. According to my comps we were on point with everything. The bank is all set to close and I have to back out since the margins are super tight. I would only net me 8k at 122k sales price. No way I could do that deal.  I am out of $525 for appraisal. First costly mistake :(

How can I avoid this from happening again? I want to be sure I have plans that will be sure to have the value I need for the area.

Also, my husband is in the process of getting a limited residential license. He has a cousin who has been a GC in Georgia for years who plans to show him the ropes. I would like to use a GC for the first two before we jump in ourselves.