Still stuck at the financing stage for our LEED house in Houston, and it's getting hotter
Not much has changed since May 4, when I last blogged and when we were stuck at the financing stage - except the temperatures and frustration levels have gone up. It hit 88oF/31oC in our front room this evening, with the A/C running continuously. I anticipate a $500+ electricity bill for this month, which is bad enough, but considering it buys us no comfort, it is money badly spent.
We struck out about 6 weeks ago with the latest bank - this time a smaller regional one, which we had tried with the hope that they might give us some personal attention. Quite the opposite - the communication was so poor, that it turned out that we were working under incompatible assumptions. Personal banking just doesn't exist anymore - it is just marketing.
As I have stated before, the problem is driven by the valuation - this is what determines the loan you can get. The valuation is driven by what the market understands - which is large, poorly built McMansions. They look at similar houses that have sold in the neighborhood of similar size. That's just about it. We did work with an appraiser who understands green, and the significance of LEED, and added a premium. The bank balked and challenged that additional figure. At present in Houston, a modest (3,200 sq ft) well built house with a good roof, great windows, insulation etc etc cannot be built, unless you have a few spare $100,000s lying around.
We have the following choices:
1) go back to the architects and add a 1,000 sq ft so that we get a valuation high enough to get us to the right numbers - then we'd get a house that is too big, too expensive and not what we want
2) go to the builder and take about $40,000 more out of the housing budget, running the risk of gutting the house of all the things that make it special (i.e. really nice windows, storm shutters, metal roof, insulated attic) and reducing our LEED status no doubt
3) save our money for a year, pinching every penny, and hoping that the market doesn't keep declining faster than we can save (because, remember, the market drives the valuation, and so it might be that in a year you'd get a smaller valuation and so smaller loan and need more cash...)
4) think different - maybe try and sell, see what we can get for this house, and what we can buy in the neighborhood
