Appraiser One Is Done

Not a whole lot to report on this.  I had scheduled the first appraiser for yesterday and I had to call the other appraiser and get a date scheduled, which will be Friday.

I showed up after work and Steve the appraiser was just finishing up his outside review.  We went inside and he snapped some pictures of each room and made some notes about the layout of the house.  Oddly, he took a picture of the kitchen faucet running.  He said “They like to know the utilities are working.”  It’s probably just a habit for him, dealing with banks, but it’s kind of out of place for my needs.

As if he realized what he had done, he asked again what the appraisal was for, and we discussed the situation.  He shared his preliminary research which was pretty insightful.  As far as recent comparable sales, my house could be valued at 56% to 105% of its original purchased value or 88% to 164% of its payoff value.  It’s pretty unlikely it will be at the upper range and I have the funding to do a buyout at 100% of original purchase value.

So, appraiser two on Friday, waiting for probably a week to get the reports, set up an appointment with the attorney to draw up the purchase agreement, probably another week waiting for that.  Then 30 days for my co-owner to review the offer.  That gives me a timeline somewhere in the middle of March.  Let’s just try to get that far first.

Buyouts and Partitions On The Anchor

Although this blog was intended to focus on the purchase of a new property without really discussing the current property situation, I’ve come up with some information that may be beneficial to record, so now there’s a new category on this blog.

To be frank, I am in a situation where my current home is co-owned with another party and quite simply, this situation needs to end.  An offer to buy out the co-owner’s share was fruitless.  That is what lead me to pursue a second home of my own.  Recently, I was searching for more information on how I can resolve my situation and I discovered a process called a “Partition Action”.

Here’s the gist of a partition action:  No one can prevent you from selling your interest in a property.  That might sound confusing.  What I am trying to do is force my co-owner to sell to me.  But go forward one step – The partition action forces a sale of the property and the proceeds of the sale are split evenly between the owners.  My co-owner and I then have equal opportunity to purchase the property.  I have the means to purchase it and my co-owner does not.  So, in effect, my co-owner gets half of the sale proceeds, which is exactly the same thing as accepting my purchase offer.

The downside of a partition action is that it is very expensive.  Thousands of dollars expensive ($5000 non-refundable retainer to begin).  And a little detail I learned yesterday is that the legal fees come out of the sale price of the property, which means my co-owner bears half of that expense as well.  This is an excellent means of leverage in negotiating.

Step one in this process is to create a fair and equitable purchase offer based on the appraised value of the house.  I plan to get two appraisals as documentation that the offer is fair.  So, let’s get some appraisals.  This simple task gave me some interesting information.

First lesson learned: appraisers don’t answer their damn phones.  Out of a list of seven candidates, only two answered the phone.  One was answered by a receptionist and the other was a groggy “Hello?”.  Out of seven, these are my winners?  Second lesson: appraisals aren’t cheap.  The number I had in my head was $280, but I ended up with $350 and $400.  $700 in total just to make this fair offer (lawyer fees are more than double that so far).  Third lesson: It’s not a quick service.  Both appraisers had at least a week backlog and would take almost a week to get the report back after the service.

But here’s the interesting thing I learned.  When I spoke to these people, the first question they asked was, “What is this appraisal for?”  I explained it was for a buyout offer and both clarified, “this isn’t going to be used for a mortgage, right?”  And I said no, but that was weird.  The receptionist said they would only do appraisals requested by a bank.  The groggy appraiser explained that they won’t do appraisals for mortgages at a person’s request because people would take appraisals to banks and say, “See?  This is the value.”

I thought I was allowed to choose my appraisal/inspection companies in my last effort, but the post reports that it was the title company I was allowed to choose.  So I guess I can understand that situation.  And since it was just for my use, “market value” was the term used, they didn’t have any problem after that.

Future posts in this category will discuss some of the details of the purchase offer, since it will involve some non-standard elements, like the quitclaim deed and terms of how the co-owner will remove personal property.  Hopefully, there will be a happy resolution, but if not, expect more posts of the details of the partition suit and how it’s going to be used to force the sale of the property to me.