There are a few different issues here. The first is that you and the builder have arrived at different bottom lines. You need to sit down with him and find out where the discrepancy lies...I have a feeling it is probably the sq. ft. discounting as you mentioned that it is "about 5000." You need to agree on what the actual price of the house is...ask to see receipts/change orders/documentation. At this moment, who owns the house? Is it you or your builder? If it is you, he may be willing to negotiate (even if his numbers are correct)just to be finished with the job and to be able to move on. The second issue is the low appraisal. I'm sure that this happens regularly; however, I have never seen it in my area with new construction. We had, on paper, an appraisal that was $50K more than our contract price...the bank congratulated us on a good negotiation with our builder. I have the same question as the above poster...does your contract address this issue about appraisal? What are comps for new construction in your neighborhood? Price per sq ft? Try to determine if your home falls within these parameters. If it seems out of line, ask for a second appraisal. But, if it doesn't appraise then you're on the hook for the difference. Isn't your husband an attorney? (mine is too...I empathized with your stories about his billable hours. Mine billed 2400 last year...brutal!)Maybe he can do some high level negotiating with the builder? I'm blown away by the price of your home. The pictures that you've shared are so pretty...it looks very nice. There is nothing new being built in my area for anything near that price. I don't think I can remember seeing anything (in a neighborhood where you don't have to worry about being shot)in a new subdivision for less than $350K + in the past year!

I don't think you need to do anything right now. If the house sells at a satisfactory price, then both the first mortgage and the equity loan balance will be paid off at the closing, and the balance (minus agent's commission, if your using one) will go to you. You definitely should NOT pay off the loan with your savings. That cash provides you with financial flexbility that you will lose if you pay off the loan. A recent widow should hang on to her cash reserves until life settles down and her financial situation becomes more certain. If the equity loan is a HELOC with a floating interest rate and the house doesn't sell by the end of the summer season, you probably should do a refinance and combine both loans into one so that you don't have to worry about the possibility of rising interest rates inflating the size of the HELOC payments.

It depends upon what type of renovations are being made. On a recent appraisal for one of my clients the flooring had not been installed in the living room and dining room. (relatively small thing). The appraiser indicated this would not affect marketability of the property, but he did appraise it "as is." Best option is to ask the bank who they use for appraisals and talk to that person to get some better answers.

These explanations have been very helpful as this is a very confusing time. Other than the house, there are NO other assets. At this time, we believe the mortgage exceeds the value of the house (we talked to a local realtor). There is no will, no POA, no executor -- all we have is this quit-claim deed (unregistered, and probably always will be). As a courtesy, my DH has called all the credit card companies to inform them of the death. Most have said to just fax a death cert. We haven't yet called the mortgage company. The mortgage is currently paid up to date. As I said, we are not responsible for any of the debt -- DH is calling as a courtesy because past due notices and phone calls are occurring. I am still not sure who actually petitions the court to start a probate case. I don't see us doing it because it does not look like we have anything to gain. Can anyone answer the above question?