"Carl,
First thank you for responding right away and I'm sorry for not sounding coherent.
1) $250,000 is our savings, which would have been enough for the remodel.
2)3)In our city, replacing, adding, building etc. up to 50% of our current size is considered remodeling. We were adding 600 sq.ft to our 1200 sq.ft house. The old foundation had to be redone to match the codes for the new portion. The fourth wall was long and measured 50% of the exterior walls.
4)5) Without the 50% exterior walls standing, city does not allow remolding. They said, we have to get a new permit and start over as a new house. Our current foundation meets the remodel footprints but, the city says we have to have different set backs for the new house. I asked for variance, but they said no. We have recently submitted our new drawings to the planning department.
6) First, I asked for equity at two major banks in town. Then, I asked for construction loans from another two major, national banks. They said, they don't give loans once the walls are gone. They give loans at the planning stage, when the physical house is still standing.
7) The upsetting news was when the city stopped all construction, nullified our $8,000 permit, sent us back to the planning department, we now paid another $7,000 to start over, and more to the architect. New house construction will involve other expenses remodel wouldn't, such as PGE construction which requires power lines to be underground, more apartment rent, and when all is finished...the tax on a new house will be very high. Also, realizing we might not be able to afford to live in our new house, we drew the new house bigger. Out here, bigger homes sell better and for more. The new house will be 2800 sq.ft including the garage vs. remodel...600 new sq.ft, replace and fix everything broken from the old and don't touch the garage, 1200+600=1800 sq.ft.
8) The widow does not have any money.
9)After the contractor died, we pulled the remodel permit in our name. We are also pulling the new house permit in our name.
Building a new house will command a lot more money than our original plans.
I read your e-book yesterday. It was very well organized and informative. I wish I knew before all this started.
Thank you so much for your help.
Sincerely,
Susan"Boy, what a mess. I too wish you had read my book before you started. I wish even more that whomever designed your addition, whomever approved your "remodel/addition" building permit, as well as your General Contractor, your foundation contractor, and anyone else involved in this colossal "screw up" had read my book, or any book on the process of homebuilding.
In my opinion, what you need to do now is STOP!, take a deep breath, "count to 10", and start all over, this time at the beginning.
I obviously don't have all the facts but, WWCD? (What Would Carl Do)?
1. I would see if the city of Saratoga will allow you to "put your old house back together" by putting up the wall that "brought down the wall", the long wall. I doubt if they will, but it doesn't hurt to try. If they do allow this, go back and start your project over the right way, now that you know "the worst" that can happen.
2. If I have to build an entire new house for these bureaucrats, then i would treat this project as a teardown/rebuild, with the teardown portion almost complete, and the rebuild portion in the preliminary design stage ( a little backwards, but hey!).
Note: You may have to demolish the rest of the house too. (I can't tell from your info).
If you do, be sure they (the bureaucrats) issue a demolition permit. Investigate this phase thoroughly as the "rules" vary from not only from state to state, but from town to town.
3. I would take my time time designing the new house, and realizing that Santa Clara county has almost
15,000 listed foreclosures, in all price ranges, I would design the least expensive house "in the neighborhood" as the easiest house to sell in a neighborhood is the least expensive one. (this tip too, is in my
eBook).
Besides, if I realized "we might not be able to afford to live in our new house", so too would a bank, ergo, NO LOAN!
4. I would arrange my financing FIRST. (By the way, what is the value of your lot (just the land)? Since it appears you have destroyed the value of the original structure, the value of the land should have a bearing on getting qualified for a construction loan as land equity can be used for part of, or even all of, a down payment for the construction loan to build a new structure as well as any of the $250,000 you have left.
If you have an existing mortgage, that will have to be paid off from the first construction loan advance or draw)
It might be wise to hire a general contractor, even if just as a supervisor, that has a good relationship with a construction lender.
This problem is complex, but, like all problems, it is solvable, maybe not with a solution that you like, but solvable.
Carl
Labels: Ultimate Nightmare - Part 2
