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Small Cabin Forum / General Forum / Finally Closing on Cabin - Warning!
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Nobadays
Member
# Posted: 26 Jan 2019 09:49
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It's been a rough ride! Be forewarned on using "mega lenders and mega insurance companies.

Two lenders, two insurance companies, three closing dates and I've lost count of how many contract amendments - mostly because of being off-grid and the address, or lack thereof.

Started in November, offer accepted then went with a "mega-lender," one week before closing date the underwriters realized it was off-grid, not that we had kept that a secret from the beginning. We went over that with the loan officer a dozen times, "no problem" until it was. "Underwriting says you have to hook up to the public grid, or have a solar contractor install a residential solar system." Canned them and went with a local bank... no problems at all. They new the location, have loans on several neighboring cabins. Sweet!

Tried to transfer the home owners insurance from old lender to the new one.... "your insurance is slated for cancellation and locked so we can't transfer it." Why is it locked? "The inspector we sent out couldn't find the cabin so no inspection, no insurance, we're sorry." Now of course the new lender can't lend with the insurance coverage in the old lender's name! Went with a local insurance writer...no problem getting insurance issued - until there was! Their underwriter wants a physical address and it seems the one being used by the seller was never registered with the county...even though it was given to him by the county!! So...on the phone with the county planner, who was extremely helpful, even waved the recording fee, finally have a proper address, recorded for the cabin, insurance and a solid closing date, Wednesday the 30th of January...yay!!

Just our experience but it sure has been easier working with the local lender - who knew right where the cabin was, and the local insurer who insures our neighbors cabin. The only thing was the local insurance was 3 times what the mega insurer was going to charge us...gotta look into that now that we have a proper address. YMMV

Cabin is at 9100' ~25 miles west of Alamosa, CO. Here's some pics:
Front View
Front View
Rear View
Rear View
Livingroom
Livingroom
Kitchen Area
Kitchen Area


beachman
Member
# Posted: 26 Jan 2019 10:20
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I hear you on this. Our camp is off-grid, no road with lake access only. The assessment office tried to say it was worth a fortune but we had it reassessed in our favor. Although the property is worth it for us, if we tried to sell it would be very difficult, at a low price and a self-financed deal. Insurers will not go near us unless we spend 10's of thousands to take away any risks.

PatrickH
Member
# Posted: 26 Jan 2019 11:43
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I got one for you also, My neighbor passed away he owned 2 lots next to me one with a cabin one with a sauna. I contacted the son and the properties were being foreclosed and headed for sheriff sale. The bank had agreed to a short-sale and I put in an offer only to find out the bank was unwilling to separate the lots and they had borrowed this 66 year old man way more than this property would ever be worth, and he had unsecured debt with them also. After lots of back and forth I concluded the bank was trying to recover all the debt through the sale of the property. So we finally came to an agreed offer and we applied for a loan through the bank that held the note,They ended up wanting the cabin to have full plumbing to put a loan on it now ,or we would need 30% down which we did not have.I ended up getting a friend to put in an offer on the cabin lot and I on the sauna lot which is next to my existing house that is paid for but not 100% finished so they wont mortgage that either.After a bunch more back and forth everyone is good to go, my friend and I get financing set up closing date set time of work etc. Get a call 2 hours before closing saying its on hold because the bank wanted another 7500$, so they got the president to waive 5000$ of the unsecured debt and the estate agreed to pay the rest as we were already paying 10K over what the original bank note was for(I really wanted this land). We closed no problems ,next day we get a call the estate refuses to pay now, and the bank says if we don't pay within 48 hours they are going to foreclose on the property.So we bring a check for half and my friend who left the closing and flew to Montana for a week tries to do a money transfer but cant because he has to be at a physical branch. He has his son overnight a check over and we get everything resolved,But what a nightmare.And throughout this whole thing the neighbor and his father in law had been stealing things off this property, so that turned into a whole bunch of more drama I did not need in my life. After going through this I really don't want to ever deal with banks or buy any more property again, That bank really went above and beyond to show how disgusting they really are.And I was also very disappointed in the neighbors actions ,but maybe that's just people.

hattie
Member
# Posted: 26 Jan 2019 12:40
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WOW these are both horror stories. How sad that people have to go through this just to purchase property and a cabin. I'm glad you finally sorted things out but WOW. Talk about unnecessary stress in your lives.

Nobadays
Member
# Posted: 26 Jan 2019 15:27
Reply 


Stress is right! We are in our early 60's but had never had a conventional loan before. Owned plenty of houses/rentals/a commercial building but, always had owner carry or the price was low enough we could buy out right. My sister and her husband trade homes every almost 7 years like clockwork. I don't know how they do it, once was enough for me!

I knew in the back of my mind that I should have gone with a local lender the first time but chose a couple of points less interest and got in return a bucket load of headache!

The local insurer though is flat ripping us off on the home insurance. The big company we have our primary home through quoted us $547/yr..... the local is at $1,800/yr. Now that we have an actual address so the inspector can find the home (hopefully! ) we will switch back over to that company right after we get closed and the dust settles. Our loan officer even suggested we do that, will save us $1,300/yr! Since that is escrowed it will lower our payment over $100/month.

Patrick.... your bank experience sounded rough for you as well. We did have to dig up another 10k because the local bank required 30% down because there is not year-round access to the cabin. Funny thing is we are going up next week... maybe a 1-2 feet of snow so no, we can't drive to the cabin but it's less than a mile off the county road that is plowed so to me we have access. Snowshoes and a pulk sled and we'll be at the front door in 30 minutes.... couldn't convince them that was year-round access.

Are looking forward to summers among the aspens in the mountains, I think it will be worth the trouble!

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