You have a contract with no provisions for an escrow? That's what it sounds like. If true, that isn't good and you need to establish one, if at all possible. Hopefully, the seller will cooperate. You need a title search. The survey is good, but not enough. You need to make sure you are getting a warranty deed, not a quit claim deed. You need to buy owner's title insurance, which will require that title search and probably the survey. Hopefully, it is current and will meet the title company's standards. You should have checked all those things mentioned by the gargoyle. You should also have checked for deed restrictions. More important than anything else, you need to take everything you have to a local real estate attorney and get it checked over -- today. You don't have a lot of time left to get this stuff done.

dixiedoodle: I got pretty much the same deal from Wachovia, SunTrust and WashMutual. Local banks were way too expensive. I'll recheck all of them when we're ready to apply because of what you said about the Jumbo loan situation. I wasn't planning to finance as much of it earlier and now I want to hover around Jumbo range. cork2win: I really appreciate all your explanation. I really didn't know we'd be able to negotiate that much. Fortunately both of our credit ratings are almost at the top and that may give us more leverage. With that, the fact that we have no other debt and loan the land outright it seems to me that we're the kind of risk they'd like to have in their portfolio these days. Can't remember which one of the biggies retains 90-something percent of the loans they originate, but that should make a difference if they know they'll be retaining our loan rather than selling it off asap. Thanks, guys. I'm feeling better prepared.

nosoccermom and Kirkhall, What you said are the typical process and math to get a mortgage which have been used for a long while. Most of us experienced in the past when market was hot, appraisal value was equivalent to the sold price, so tag on closing assitance was easy. What I am interested in knowing is in the current heavily discount property value environment, what math the sellers/and their agents are using to predict a selling price that would be high enough to get a bank loan and also cover the closing cost assistance. Then, if they found that magic number, would it be possible the sellers believe the net price they would received is too "below market value" and refuse to sell? Experienced folks like ncrealestateguy and brickeyee would have the answer. One more dumb question, I heard that getting "kickback" is illegal in real estate transaction. What is that about? Is closing cost assistance a form of "kickback"?

Would the below be a correct/ accurate estimate? (Example is being slightly conservative?) 2 acre bought for $100K cash, no financing at all. From here on out, would it be correct to say we now have to ignore that we just spent 100k on property as far as any future construction loan is concerned? Based on several comments in this old thread, that seems to be the case, as it appears appraisal for total finished property (house plus land) does not really seem to consider market value paid for land at that time and final appraisal appears to be much lower than combined build cost and property cost. Construction Cost from Builder: $500k Based on several comments above, it sounds like most appraisals are extremely short when considering land value. (seems odd because where we live, zip code 54115, our county web site shows “fair market value” for both property and the “improvements” (house and such). Example: Nice newly built house in area just bought, county site shows land value at $86k (purchase price/ appraisal value), then improvement/ building/ house at $589k. The public tax bill shows the tax is paid as a single payment, but the site does separate out the two. Bank will loan 80% of total appraised value basically ignoring actual construction cost builder will charge. Using our 2 acre lot example and 500k construction cost: o Potential low appraisal value might be $525k. (even though land was 100K fair market, and cost to build is 500K) o So bank will lend 80% of $525k, meaning $420k At construction loan closing, we need to bring ~$80k in cash ($500k build cost minus $420k possible loan/ financed amount). In this example, our $100k already paid for land at market value did not really contribute much if any at all. So total upfront cash/ down-payment we spent on completed property (original land purchase if 100k plus 80k construction down-payment) is $180k or about 34% of final appraised value? Continuing to use the example above, with a total loan of $420k plus our $180K spent in cash for total initial cost is $600k on newly appraised property of $525k at construction loan closing, we would already be ~$75k in negative equity? I understand construction is generally more expensive than buying prebuilt, but with the mantra that is taught “house is an investment”, why would anyone ever want to build new as it will take a very long time to reduce that negative equity. Any ROI appears to be horrendous compared to other investment areas. Please understand I have no real idea other than my wife and I bought some property and I am trying to get a a somewhat accurate gage of how much additional cash we may need for a construction loan hopefully not more than $500k. Based on the comments above, I am now thinking better to just sell and maybe get our $100k back as best able, put into other investment instead and wait until a pre-built hopefully come on market that has what we are looking for. Then use that $100k (or more) on a house where we could already seem some form of equity return. How often does it seem final “market value” is so much less than build cost plus land? Is there a general rule of thumb that can be applied for rough estimates? (maybe take build cost plus land value, then minus a certain percentage?)