Our appraisal leaves us $17k short. When asking about the appraisal and what we can do to get it changed, the answer was that the lender had already tried to fight it and it is what it is. So the question remains, why were we not informed and included in the process of this as it was clearly not successful. We were told we could contact the appraiser themselves to get the answers we needed. Our lender is on vacation in Florida and his assistant has dealt with all of this. We know nothing from them until Monday. From Florida our lender has agreed to pay an additional $1500 on our pre-paids on top of the $1000 he was putting in to closing costs. Though that $1500 doesn't help close the gap we face now. That comes later.
Now this is when Susan starts to make excuses for the lackluster plan she's about to present. How costs of building have gone up. How the price of our plan went up 10k in January and we were lucky to get it in December. How everyone is losing in this deal. The lender is pitching in and Inverness is as well. She even blamed us for choosing options that are too fancy for the area.
So here was her plan. We lose our good faith deposit, we were to get back $8000 at closing. We take our Guardian options out, $4000. Inverness pitches in $2000. Then all we have to pay is $3000. She lays it all out as if the $3000 is all we have to pay. Not bad, right? EXCEPT that $8000 is OUR money too. AND we would still have to pay Guardian out of OUR pocket.
When reminding Susan of this she made it sound like giving up any more than $2k would mean they made no profit. Susan is just doing her job and I know some stuffy guy in a suit is calling all the shots. It's just aggravating they aren't trying harder for a sale.
Looking up profit margins on new home construction, most builders make from 7-9% on the sales price. That's after the sales commissions, financing fees, etc... That means Inverness has a net profit of $23-27k. We knew this going into the meeting.
So we issued a very fair ultimatum. We asked that Inverness come up with another $4k and we would cut some options. Like the $1200 contrasting paint option, and all the other things we can do ourselves later. Then we would leave the rest as a down payment.
Here is what I don't understand about all of this. If the cost of our house went up $10k, add in to that the cost of everything that added value. Like the basement and 3rd car garage. Take away the $15k incentive on upgrades. So our model, if purchased right now with no incentives would cost $302,000. Our appraisal is $314,000. That with EVERYTHING standard. The left over $12k will barely cover the level 1 flooring options throughout the house, and forget about granite in the kitchen. It seems to me their base pricing is a tad too high for the area if appraisals are going to come back like this.
We left the meeting and drove around our town looking at other builders and lots. We cruised around looking at houses for sale. We sent a message to Susan asking when we could get our money back if we opt out. If we have to go another direction, we need to do it now. I hope we hear back by the end of day Monday. This needs to get solved. I think we are being more than fair for what we're asking.