Reply
Contributor
Posts: 114
Registered: ‎04-21-2008
0

FHA new Construction Appraised Value

I signed a contract to build a home in Dec 2007.  They are now 2-3 months from finishing the construction.  At the time they were offering 20K in options if I signed up before the end of the year, which I did.
 
Now I notice that the price of the Model home that I am building has DROPPED 20K from the base cost of what it was in December.  Not sure on what options incentives they are giving now but I'm sure it is not $0.
 
How would FHA Appraisal look at this since someone else can now build the same house next me for 20K less that what I am?
 
Any thoughts from Real Estate Pro's?
Valued Member
Posts: 38
Registered: ‎05-01-2008
0

Re: FHA new Construction Appraised Value

That is happening in the development that I am looking to buy.  The builder did not really lower the cost of the house, they simply made it cheaper.  All of the standard upgrades have been removed and the house now has vinyl floors as opposed to wood, etc.  I am sure that if you were to price a new home with the same upgrades that you have the price would be very similar.  BTW, the home builder in my case is Pulte.
Contributor
Posts: 114
Registered: ‎04-21-2008
0

Re: FHA new Construction Appraised Value

My builder is Shea Homes...BTW, I had previously worked with Pulte and they were great.  I backed out of a house due to a contingency sale on mine and they refunded every penny of earnest $ within 2 days.
 
I am going to have my Brother inlaw go over to Shea office and find out what incentives they are offering.
 
 
Super Contributor
Posts: 8,362
Registered: ‎09-28-2007
0

Re: FHA new Construction Appraised Value

Shea has very nice quality homes from appraisers I've spoken to.
 
If your appraisal has been done already then there shouldn't be any issue with the value of your home - however if the appraisal hasn't been done yet then the new sales prices could impact your appraisal negatively, perhaps even to the point where the home might not appraise for the sales price (very uncommon, but can happen).  If the home doesn't appraise out, or even if it does, I'd ask if there is anything that can be done to adjust your sales price downwards if it's true that the same exact model is being sold for $20k less.  The model will need to be exact though, there are some models that are being discounted locally where the new models have less base features in them than the same model had a few months ago... so if you haven't, get all of the details on the new model vs. the old model before bringing the price reduction idea of.
Highlighted
Established Contributor
Posts: 852
Registered: ‎09-18-2007
0

Re: FHA new Construction Appraised Value

I am sort of the same situation, bought in October, but they didn't start till construction until March.  They lowered the price before I purchase, and have thrown in a ton of upgrades, Granite countertops, Stainless Appliances, tile kitchen floor and Wood bannister on the staircase, yet I am still concerned about my upgrades and appraisal.  They also gave 10,000 incentives, which is just about what I spent, plus 9,000 in plantation shutters...thats my main concern.  I figure if it doesn't appraise enough, then I would have bargining power with them... except for the shutter price. 
 
When the idea of the appraisal not coming in high enough first surfaced, I paniced.  Never had even thought of the possibility.  So, we have included the shutters in the mortgage, but they are not going to be ordered and installed until after the appraisal, so I can back out if necessary.
 
It was just a casual conversation with the Mortgage person when it came up.  He says he has never had it happen (not apprasing enough) with their homes...but that in today's market, they are just trying to cover all the bases.  My builder (and I am using them for mortgage) is John Laing Homes

Starting Score: EQ 679, TU 697
Current Score: EQ 680, TU 672
Goal Score: EQ 720, TU 720


Take the FICO Fitness Challenge

Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
† Credit cards for FICO Score ranges: The score ranges are guidelines based on actual applicant approvals and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.