Congrats on another baby! We have five boys ourselves. Your plans for your home are very nice. If the bank has approved you and you feel comfortable with the mortgage amount I would look into other options prior to "starting over" on a great plan. Can you try more with the appraisal/bank/etc??? Is your builder willing/able to allow you to borrow some from him? A few of the custom builders around my area have financed some of the project themselves. My current neighbor, pays her builder "X" amount for 3 years. As another option, we are major DIY, sweat equity people here. We GC'd our build, fourth born @ ground breaking and 6 months preganat @ closing with #5. Yes, we are crazy:) You don't have to GC, to save money, will the builder allow you to do any of the work? I was amazed by some of the bids for painting. You may get very close to your budget by painting yourself, own landscaping, etc. A huge cost can be cut with finish materials and going simple with "trim work." Though we have "wants," so many of them can wait. Built-ins, trim work, granite, custom tile shower, whirl pool bath, expensive fixtures tile, hard wood, etc. are all items that you may consider doing at a later date to get near the $100/sq. foot price. Trust me, I had to have it all and now regret it so much and would save on the upgrades if I get a second chance. The "bones" of the house, layout, square feet are most important. Other things can be changed, sooner often than later. Just some food for thought---from someone who has been "there!"

Thanks for your input! The bank preapproved us, but won't give us the full amt now that it has appraised for less, so we would be about $100K short. We could theoretically come up with that in about 1-2 years if we saved more, sold some stock, cut back on saving for college, etc but with interest rates rising so fast, we are not sure we want to put a build off if we are going to indeed build.

I WISH we could GC our own project. Hubby is a physician, so time-wise it would be a challenge, but he would likely be up to (and relish) the task. He did nearly all of our remodeling himself on our current home (mostly small improvements like tiling, installing laminate flooring, kitchen improvements - except for the stone counters) and we gutted a bathroom down to the studs and redid it ourselves previously (small remodel, but still he did the drywall, skylight, new window, tile, installed fixtures, etc). However, according to our GC/builder, the banks in this area will not allow an owner to GC himself. We have not formally researched this, but another remodeller told us the same thing when we were looking into putting an addition on our current house. We also asked about doing some of the finish work ourselves (painting, tiling, even some drywalling) but he said he had to get it to a certain point for the C of O, and it would not really save us that much money (and the time it would take for DH to do it piecemeal, or the money he would lose by taking time off work would not be worth it). We are putting off all landscaping until we can save more, so that is already out of the equation. I had to laugh when you said it is the bones that are impt...you sound just like hubby...he may have used that exact phrasing! We know we need to put the money into framing, windows, insulation, etc things that can't be easily fixed later. We have talked about using laminate counters and other cheaper options that we could upgrade down the road, but won't that effect the appraisal even more? As far as expensive finishes, we tend to be on the simple side anyway. We do want a tile shower for our bath, but we have already purchased the tile from a very reputable dealer at a huge discount. The other showers will likely be fiberglass one-pieces. We would prefer cherry cabs in the kitchen, but are going with a stock supplier and not using many (if any) upgrades other than a full overlay door. The other cabs ("built-ins elsewhere, baths) will likely be maple and the cheaper door options. When we did our bath in our 1st home, we did the entire remodel for under $2K. While we do want quality things that won't break in a year or two, we also do not feel the need to have the top-of-the-line exotics or the most expensive things either. I would like a soaking tub in our bath as well, but it will not be a multi-thousand dollar one. I don't care about jets or fancy finishes, I just want something deep enough to sink into. I do agree wholeheartedly that we can upgrade most of the finish items down the road, but again, won't that make the house appraise lower to begin with? That seemed to be the things the appraiser fixated on - are you using granite counters in the kitchen, tile in the baths, hardwood throughout, etc. Though I did not see that reflected anywhere in the actual appraisal...

That is a very nice plan and it certainly is not overly large given the size of your family!

I really don't think that redesigning the house to make it $100K cheaper to build will help you. If you cut significant amounts of square footage, that too will give the appraiser reason to come back with an even lower appraisal next time. So, lets say you figure out a way to build a smaller house but something you can live with for $100K less than this house, the appraisal on the new plan could very well come back $80K less then the cost to build that plan! What you need to do, if at all possible, is get the appraisal UP on this plan.

It may be that the bank is using a low-ball appraiser so that it won't have to make the mortgage loan at all. Apparently this is a new tactic banks are using. See the link below. They also suggest ways you can at least try to fight a low-ball appraisal. But, you need to see the actual appraisal done on your home before you will have the info to move forward.

However, one thing that strikes me is that, because you have chosen to build one huge bedroom and big bath over the garage for your girls instead of several smaller individual bedrooms, the appraiser is probably describing your home as a four-bedroom, four-bath home and then comparing it to other 4-bedroom, 4-bath homes. I think the number of bedrooms and baths does count in determining the value so that may be driving the appraisal down...and that would not even be a case of low-ball appraising.

So, for the sake of getting a higher appraisal, you might consider redesigning the girl's area into say three separate bedrooms bedrooms and two small bathrooms (without changing the foundation plan or overall size). You could also redesign the front bathroom into two separate baths. I just think maybe if you design were being compared to six-bedroom, six bath homes, you might get a higher appraisal.

Please understand that I'm not saying you have to scrap your plan for one big bedroom for the girls. Once you have the money in hand and are actually building, my experience is that banks don't look all that closely at whether the original plans are followed exactly. After all, change orders happen all the time in construction.

Other then that tho, it seems to me like your options are:

1) Go back to your banker with plenty of data to prove that the appraisal is a low-ball. Obviously you need to see the basis of the appriasal before you can argue against it. Did they use prices of comparable NEW homes with similar square footage, the same numbers of bedrooms? And if he won't have a new appraisal done by a different appraiser, file a complaint with the regulatory agency in your state that governs banks.

2) Try again with a different banker and hopefully get a higher appraisal.

3) Find another source of funds to make up the majority of the difference (signature line of credit? private loan from a family member or friend) and scale back in minor ways that won't require a new appraisal.

4) Figure out exactly what has to be finished to get your CO and have the builder do exactly that much. Then finish the rest as you can afford it.

How frustrating this must be for you! And how maddening that banks who couldn't give money away fast enough a few years ago (and therefore are largely to blame for our current economic woes) are now stifling the country's economic recovery by seinging the pendulum too far in the oposite direction and refusing to make perfectly good loans to perfectly good credit risks.

Here is a link that might be useful: Banks ar low-balling appraisals

Yes, appraisals are crazy these days. They really do not take the "upgrades" such as granite in to much "play." They sure ask enough about it and take pictures of it all, but they will give you minimal on your appraisal. Most definitly, try another appraiser. We closed on our build almost 3 years ago and we just closed before the banks and everything got "crazy." We had no problem getting financing to GC ourselves, today is a different story. I enjoyed the process greatly, it was quite an undertaking and kept me busy about 4-10 hours on any given day. My husband did so much of the home & his work was very cooperative & flexible for about 6 months while he really did the elbow grease. I can certainly understand your husband not having that luxury with his career. Do research things fully, as I'm sure you are. Check county codes and their occupancy standards yourself. I'm not saying a GC wouldn't be honest, but sometimes better to check for yourself. Most county codes are set for safety and you might be surprised on how barebones the house could be to get you moved in. Yes, you have to have counters, but plywood works. Our granite fabricator was 2 weeks behind, so we just screwed thin plywood over the cabinets for inspection. Let's see our closets were not shelved out at all. The upstairs was ROUGH!! We had a few cheap little bar sinks (from Home Depot) in and installed and later switched them out. We actually didn't even need light fixtures, we had most in, but capped off some, like the foyer (still haven't saved enough to buy that one) I hated moving into a new house so unfinished, but we needed to get out of the rental & stop paying on two places. It was not fun, sleeping in one area, finishing another area, etc. However, I would do it again because we built a 4300 sq foot home, custom everything, another 2500 in the basement, upgrades galore, 10 feet ceiling, etc. for less than 350k. Do not give up, there are ways to make it happen.

Ask to see the appraisal and educate yourself on the items that will help raise your value as the previous poster stated. The county does not care about these changes. It isn't dishonest, it is changing your mind. Extra fireplaces, screened porches, porches in general, basement, extra bathrooms, extra bedrooms as stated above all add value to the appraisal without even changing your total square feet or floor plan. You can add these things to your plans, get the apprisal/the financing & then change your mind that you don't want 4 fireplace, 5 bathrooms and 7 bedrooms. Make sure you don't give your county the plan with all the upgrades or they will charge you for all that too. Just saying, there are lots of ways that people do things, to sort of get around things;)

GC's are not going to want you to do the finish items yourself, they make so much money on that end. My one neighbor paid $50k for their interior painting. Another neighbor GC'd his own and primed everything himself. Can go quick with a sparyer, before trim work is up. You can have primer tinted a neutral color and then repaint room by room in the future. The bank nor I could tell when the home was inspected that the house only had primer.

Just a few ideas on things that have worked for us and others we know. Best wishes to you & your family!!!

I have a question regarding these suggestions to submit plans with additional bedrooms, bathrooms, etc. to the bank in order to get the appraisal you want before building and then not building to those plans. Doesn't the bank do another appraisal after you complete the build? If so, aren't you risking it not appraising high enough when you go to convert the loan and, therefore, you have to bring more money to the table?

fiveunderfive - I wouldn't risk redesigning the plan for the appraisal and then trying to get it past the inspector on the back end. It would make me too nervous!

My husband is a physician too and the bank we ended up going with specializes in physician loans. They will loan up to 100 percent no PMI to a new physician in town and have very very flexible programs for doctors - they corner the market here (they are part of Synovus). Is there a bank where you are that does this? I got the impression today that we might have a harder time going with a standard loan if they get the appraiser to work this time since the market has seriously no comps here - without going miles down the road or into the next county, which Fannie Mae frowns upon. The key is finding someone local who will do an in house loan - that way they can have some flexibility with the terms. Another thing to think about - could you piggyback the loan? This bank would do that too - put one portion on the standard loan and an extra portion on a HELOC. This is harder to find these days but some banks will do it - you just need to find a creative banker who will work with you.

Having trouble sleeping, thinking of the post. Sorry my prior post comes across as being ignorant and dishonest. I have never, nor would I, nor would I suggest doing all the number of things to change plans for an appraisal. I kind of just ran with the thought of well this is what they look at and could be done, etc. I exaggerated things on that end and after rereading it all came across really "bad." Just felt kind of bizarre after rereading and surely thinking some of you thought the same, problem with "communication" over forums at times to get the total message across. I hope you get that dream home for you & your family:)

Your best bet is to work with your builder on downgrades that will decrease your build cost without affecting the appraised value. Suggestions here won't really help you if your builder won't agree. And some, like adding porches/decks to up an appraisal, are contrary to my experience: adds cost with little to no credit in the appraisal. That being said, I think it would be almost impossible to take $80-$100K out of a plan without a significant alteration in build quality that would trigger a new appraisal. If you redesign, decrease the square footage, you will likely still have an appraisal issue with comps. The unfortunate situation we find ourselves in is it is not possible to build the quality/kind of house we want to live in for most/rest of our lives for the cost of similar houses already on the market. I don't remember your situation, but if you are not financially constrained by already owning the lot, there is a lot of stuff on sale at good prices.

Something else to think about: Is this contingent on you selling your current house? You will have to be realistic about that part of the process as well. Good luck.

Do you need to reduce costs or seek an increased appraisal?

If you just need it to appraise higher, I might consider reconfiguring the upstairs so that you have more bedrooms and bathrooms. They are consolidated now which means your unique house may be getting compared to more traditional 4 bed/4 bath houses. You may be able to get a higher appraisail by having more bedrooms and bathrooms. And there should be a way to design it that still meets your needs.

Good luck.