The appraisal process - Unless you are sitting on a sum of disposable cash (and most of us unfortunately are not), getting a bank loan will be one of the starting points to getting your timber frame house kit. Banks rely on the services of licensed appraisers to determine whether the amount of money you are asking for is commensurate with what the house will end up being worth. With the mortgage crisis nationwide, banks are now especially careful before lending out money.
Your first step will be to have your timber frame house plans, along with a detailed estimate of funds needed to provide to the bank. After that, the appraiser will come out to your site with your plans and take some pictures of your land. They then have to scour the tax records to find “comps”, or comparison sales, of houses in your area that fit the general size and workmanship of your proposed house. Here is the difficult part: there are not that many timber frame homes and they are not sold very often as the owners tend to stay in them for a long time. This leaves the appraiser with not very many comps that are “true” comparisons. As a result, many appraisers will have to look at regular “stick frame” homes that may or may not have all of the craftsmanship that goes into a timber frame home. Be ready for the appraisal process to take a little longer than it might with conventional homes in suburban areas.
Also, many people who are of the mindset to want a timber frame in their home are also in the mindset to want energy saving building techniques, such as tankless hot water heaters, SIPs (structural insulated panels), solar panels, etc… Even though these “extras” will help lessen the utility bills for the homeowner in the future (thus increasing the value of the home), they are not found in many homes, thus again making the process of getting true comps more difficult. If you are interested in utilizing more progressive, energy saving appliances or building techniques, be prepared to possibly spend cash on some of those if the bank is not able to get an appraisal high enough for your needs.
After the appraiser has found his comps, he/she has to submit the report to a board to make sure that it is accurate. This extra step is also due to the mortgage crisis. What this means for you as a new homeowner is that the appraisal process may very well take several weeks. My recommendation is to try to be patient and think about how impressive that timber frame is going to look in your new house.
We built a 2400 sq ft timber frame in 2006 in central Kansas. It has SIPS panels, hot water radiant heat supplied by a tankless hot water system to the main floor as well as the finished basement. It has a 100+% basement (we used pre-stressed concrete to also build under the oversized 3 car garage). We sit on the 13th fairway of a beautiful golf course. Total cost of building the house was about 650,000.00
My husband died almost 4 years ago and I am ready to sell and downsize (I am 67).
I put the house on the marked about 2 years ago and there was an appraisal done for a prospective buyer’s lender. We are the only timber frame in the county. The appraiser said that the timber frame, SIPS panels, radiant heat and other features were not relevant to the appraisal. We have 5 bedrooms, 4 in the lower level, and 41/2 baths but she said that only rooms on the main level were counted.and stated we were a 1 bedroom, 1 1/2 bath home and appraised it at 350,000.00.
Are there any appraisers who do appraisals on timber frames and understand what they are looking at? I have just relisted the house and am feeling trapped by those who do not appreciate what we have. I have listed at 595,000 and the only offer we have had was for 400,00.00 so far.
Audrae,
I certainly know what you are going through. When my personal house was appraised they did not give us hardly anything for the timber frame. In my neck of the woods the upstate of South Carolina some of the appraisers give a little but not much for the timber frame and energy efficiency aspect of a home. While this is frustrating they do have the problem of finding homes like yours to use as comps.
It is my understanding that you and the bank cannot really choose the appraiser, this changed in 2008 after the housing downturn, and makes it so everything is legal and no favoritism is shown. There used to be some appraisers out there that worked with log homes, which helped a little but they all now must just base it on the comps.
If I where you I would try and educated the realtor and prospect buyers about the advantages of the building system you have as much as possible. Perhaps make a display board showing the benefits and what sets your house apart from other ones in you neighborhood. I have seen local timber frames sell for more once they found the right buyer that knew what they where getting is above and beyond.
Good Luck!
Brice