Comps? Apprasial Difficulties?

Question

It has been awhile since I took out a mortgage. We have just been buy and hold investors using BRRR (before this term was invented:) but finally have decided to buy a house for our selves. We found an amazing lake house and negotiated a price but the bank would not finance due to insufficient comps for the house. The appraiser tried everything, but was not able to support the price of the house, even though he agreed the value was there. (Its lake front with acreage so fairly unusual). The seller will mostly have to lower price to be inline with other houses there that do not have acreage. The loan officer told me though that even if the price is in line with other houses there, there would still have to be comps. I can not wrap my brain around the fact that the house would be basically the same price as others but would still be difficult because it was not "exactly" like the others. It also is a little larger than the other cabins there. In my mind if it was the price as the others, who cares about the land its just an added bonus. Have others run into such difficulties with unique properties? The house is a conventional build with log siding. Thanks fellow investors for any insights or advice!!!

Hilary Tuttle · Answer

Thanks for your thoughts and reply> Yes we feel that only cash buyers so far could purchase this house. This makes me appreciate why so many people just live in cookie cutter houses. We are motivated enough to purchase house at whatever the bank would finance it for. At this point we would not be willing to bring cash to the table just because it seems like such a bad move when we are not trying to low ball them but just purchase house at what a bank would loan on it. Ugh its been about 15 years since we got a mortgage on something and I just did not realize how stressful it is. Thanks for letting me vent:)

Hilary Tuttle · Answer

I have spoken to them and have gotten very similar responses. Hopefully we will get a new contract on the house at a lower price and try again. Loan was for 480k and other houses are only around 300k-350k at this lake. But this house was larger by about 800-1000 sqft than most, and had 14 acreage, so I thought it would comp out. Lenders are telling me that the adjustments have to be very very close. Its very frustrating as a buyer but I can imagine what the seller must be feeling. The listing agent had no comps that could establish this price. Original asking price was 550!

Alexander Felice · Answer

Have you tried other lenders?

Hilary Tuttle · Answer

Thanks for your reply:) The appraisal came in at price but the adjustments on the comps where to high. So no financing, the mortgage officer was basically like it would not matter what the price was, the comps would have to be "exactly" like the house. The other lake houses there have no land just small lots. I was using a large well known lender too. I keep thinking that if the price was low enough it would have to comp out, but the lenders are skeptical. Its a small lake in a rural area, so not a lot of sales. I just didn't know that this was going to be such an issue for obtaining financing. Other houses in the area that have acreage are super cheap because they are not on the lake.

Comps? Apprasial Difficulties?

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