This week was full of speed bumps and potential road blocks.
Tuesday: We learned that the mortgage requires the renovation to start within 30 days of closing, which is a problem because Corey, our contractor, isn’t available to start until the end of August.
We also learned that the bank needs to approve of the contractor we’ve chosen and they need plans drawn with measurements in order to order the appraisal. If I didn’t mention it a few weeks ago, the bank had informed us that the appraisal needed to be ordered 40 days before closing, of course this was after we offered to close within 45 days, as advised by the bank. Anyway, obviously the appraisal still hadn’t been ordered despite the fact that our due diligence period was supposed to be over on Wednesday at 5pm.
So we had Corey fill out a bunch of forms for the bank and got them submitted.
Wednesday: Of course by 4:45pm, we still hadn’t gotten a response from the seller about our requested price drop. We knew that with the current price of the property and the cost of renovations, the whole project just wasn’t going to be feasible. So we sent the seller notice that we were terminating the contract. Goodbye downtown luxury slum.
Shortly after 5pm, we got notice that the seller had signed an amended contract with our requested price reduction and an extension in the due diligence period in exchange for an extra $1000 of due diligence fees. We also pushed back the closing date to August 25th. This was a result of a stroke of genius from our realtor, Louise. The seller had bought the house in August of 2016 and it occurred to Louise that if he kept it for just a month longer, he would pay 10% less in capital gains tax as a result of owning the house for a full year.
I spend the next hot, hot, humid hour at the downtown luxury slum getting eaten by mosquitoes and taking measurements so I could draw plans for the bank.
Thursday: The bank informed us that our contractor could not be validated. Awesome. Glad we just gave the seller another $1000.
The bank also informed us that since the property is historic, we would need Raleigh Historic Development Commission approval before finalizing the loan. At this point I’m really starting to wonder why they don’t have a checklist of documents needed, rather than coming up with a list as they go, and letting us know the requirements the day after they are needed.
But we’ve come this far so I’m going to work on drawing a floor plan on fancy graph paper. Just in case. We also reached out to a couple more contractors and a couple other banks. At this point I’m super irritated with the bank and love our contractor so if he can get approved with another bank, that would be better than having to start over with another contractor and continue to get blindsided by the bank.
Friday: We had two more contractors come over to the house and asked them to put an estimate together.
And I finally heard back from the North Carolina State Historic Preservation Office about the tax credits. Basically if we want any tax credits, we need to only make changes to “promote the long-term preservation of the property’s significance through the preservation of historic materials and features on the exterior and interior.” Meaning no open kitchen, no knocking down walls, keeping the plywood floors, and turning the enclosed porch back into a porch, thus decreasing our square footage. Thanks, but no thanks. While we absolutely love the exterior of the house, the crumbling 19th century interior just doesn’t make sense in the 21st century.