Profile picture for Howdoesthiswork1

Sticky mortgage situation in Texas for rural housing

I'll try to make this short and sweet-

Good-excellent credit, about 75k income. House in question is on 11 acres in rural county.

First had USDA funding because of low down payment. The appraisal came back with valuing the land more than the house (about 10k more), so USDA said they can't do the loan and recommended a farm/land loan.

Went to local farm credit service, they took a look at the appraisal and nearly laughed. Said its horrible, the appraiser way over estimated the land, and the land should be 20-30k less. Because of this reason, they are not able to finance.

So here we are, I've been calling around to probably 10 different lenders. We now had 15% down which is good enough to satisfy most, but some still wont do residential because it's over 10 acres. I've given the appraisal to some of these potential lenders and asked them to give me an honest opinion so as not to waste anyone's time. No one seems very confident that they can write the loan. I told them the land will likely come back less. But I'm still worried that I'll get another not-qualified appraiser. And I can't just keep ordering appraisals until I get someone who actually knows what they are doing. Also there aren't tons of comps in the area so I'm guessing that's an issue too.

This has got to be somewhat common in rural areas. Who lends on these types of places? I need help!
  • May 15 2014 - Austin
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Answers (8)

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Profile picture for samnierop
You need to get a Realtor who specializes in Land sales.Your Realtor should be solving this problem, not you. I'd go to his Broker if he isn't one himself. The recommendation by Bruce Lee is brilliant and you need someone who's willing to get creative and solve this problem for you. It's your Realtor's job to do this and to handle the Seller's Agent as well. In other words, he needs to SELL the Sellers Agent. Hope this makes sense and good luck!

P.S.  I hate seeing clients get bad service. I will do whatever it takes to make sure my client is serviced well and they get the house or property they want. Your Realtor should too!  Demand it.
  • August 14 2014
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With Bruce Lynn's suggestion you will need to get a new survey for the property, get new tax certs, update the title work if you are going to split the land.  that takes time and money.  I have done this twice.  its not as easy as it looks.  The appraisal, survey, title and tax certs all have to match up.
  • August 16 2014
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Profile picture for Howdoesthiswork1
Thanks everyone. You are right in that I should have picked a better realtor. I'm sure it is a common mistake for first time home buyers to see a house they want, and just go with the first realtor that offers to help them. And in our case, it was one that didn't have experience with rural properties.

I'm happy to say that after 6 months of stress, we finally own the property. After speaking with about 20 different lenders, I found a local one who was more familiar with properties in the area. The appraisal came back WAY DIFFERENT (and more accurate) and we had no problem with the loan after that. Luckily WE established an amiable relationship with our sellers and they were patient.

I definitely received some terrible service from our realtor. There were a few times where she asked me to contact the seller directly about certain issues because she thought the selling agent was being "too hostile" to deal with. If it wasn't for me and my husbands constant communication with our seller, this deal would've never happened. If I had to do it over again (AND I NEVER WANT TO!!) I would've picked someone more competent.

Thanks for your help.
  • August 16 2014
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This is an older post so I will keep it short. I could have financed this property for this person. As stated below, I wish things would have been handled better. Let me know if you need assistance.
  • August 16 2014
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Common rural problem.
I have seen people try and buy a trailer house on 30 acres and couldn't understand why they couldn't get a mortgage on it.
It is a land loan

What is your realtor saying?
  • May 26 2014
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Profile picture for Howdoesthiswork1
The seller did not want to subdivide. His agent convinced him that's it's too complicated.
  • May 16 2014
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Just an idea...could you split some of the land off....like house with 5 acres and the other 6 acres as a separate transaction.   Do the 1st transaction for more or less your agreed on price.  Do the second transaction for $10....cash.  Make the second transaction dependent on the first.
  • May 16 2014
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Profile picture for USMortgageRanger
Will you do this for me get your agent to get me 3 Comps that the Appraiser did not use and take that to your local community bank or Credit union. I am sure they will do the loan there.  [self promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
  • May 15 2014
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