The Path Forward

Our posts in May were written with such optimism.  Some might say with the naïveté of someone who has never built a home before, especially a “green” home, and especially in Indiana.

The appraisal process that typically takes two weeks for a standard subdivision home took nearly two months for us.  When we finally did meet with our team at Tower Bank, the news wasn’t good.  The two appraisals both came back significantly lower than we were hoping, low enough that we couldn’t break ground this summer.

Our initial reactions were tears and despair for the possibility that all our dreams and all our planning may have been for naught.  Our second reactions were anger and frustration at the short sighted and narrow-minded way our project had been appraised.  Our third reactions were determination and resolve - to save our pennies and proceed with our dream on our own terms.

When we received the news that we could not break ground this summer, it caused us to step back and question the fundamental reasons why we wanted to build Green Oak Farm in the first place.  We are both currently 53 years old.  We are settled here with stable employment and significant ties to the community. However, if we are going to live here for the remainder of our working lives and beyond, we feel strongly about being in a home where we can live a life consistent with our values.  We had already devoted so much time, energy and money into this project that the prospect of walking away was very troubling.  We debated the pros and cons of moving to a more environmentally conscious community or significantly cutting back the size & scope of the project.  Starting over at age 53 is not something to be considered lightly and if we made Green Oak Farm smaller, would it really suit our needs? Would the appraisal come back even lower?  There were no easy answers.

Regarding the appraisals, we knew from the start that this would be a challenge.  We have been working with our team at Tower Bank for two years and had warned them that the design of our house was going to be “outside the box”.  The house does not look weird, but its fundamental design and many of its features make it very unique.  Tower Bank told us that they asked two of the area’s most experienced appraisers to evaluate our project, but neither had any experience in assessing the value of “green” homes.   The comparable homes that they chose were huge, fancy, standard construction homes with lots of fireplaces and bathrooms and no attempt at sustainability.  In all fairness, there are NO other comparable LEED certified homes in our area, which is exactly the reason we want to build one.  The appraisers concluded that since there are NO “green” homes in our area, therefore the “green” features of our project have NO value in this market.   We were astonished that on the appraisal form on a line item listed as “Energy Efficient Items”, our project was listed as “standard” and the mansions they used for comps listed swimming pools and tennis courts under that line item. 

Needless to say we plan to appeal the appraisal.  At the end of the day, it may not change the bottom line of the construction loan very much, but at least we can educate and inform some folks along the way that ICF construction, solar panels, geothermal heating/cooling, really good windows, etc. DO ADD VALUE to a home in Indiana.

So once we stopped being angry, we started crunching numbers….lots of them….all directed at figuring out how long it would take us to save enough money that we could afford to break ground…..and would the delay in the project mess up our savings for retirement.   Our financial circumstances have changed a lot over the past year.  We have sold our “subdivision” home, and moved into a rental townhouse, with many of our things in storage.   Our children have in all practicality moved away so our living expenses are largely those of “empty nesters”.  After a couple of weeks of compiling spreadsheets and trying to look at them from all the angles, we have concluded that we should be able to break ground late summer of 2013 or as a last resort, in the early spring of 2014.

It’s not the path we had hoped for, but it in the long run, it may actually work out for the best.  The smaller the construction loan now, the smaller the mortgage in the future, a sustainable concept looking toward retirement.  The wait now is difficult, but the anticipation of living on Green Oak Farm is sweet.