Free The Barn House by Ed Zotti Page A

simple, and in outline it was; but it entailed a hundred intricate steps as rigidly prescribed as a Japanese Noh drama. Certain acts had to be accomplished in a certain order. To deviate from the script in the smallest detail was to invite catastrophe. We knew one couple who attempted to obtain a construction loan after interior demolition was under way—a fatal error. They’d failed to confirm their home’s baseline value; their loan application was rejected.
    The house’s value was the key thing, you see. At the outset this figure could be confidently stated—that is, the price you just paid. One then proposed to take the house, a sagging but patently saleable commodity, and demolish large parts of it. To a degree this was true of any home improvement project, but city houses were often in such an advanced state of dilapidation that they had to be gutted, with all or most of the interior finishing removed, the utilities yanked out, and the walls taken down to the studs.
    Gutting a house reduces its value to an appalling degree. The value of the property at its nadir may be the price of the land on which the house sits minus the cost of razing what’s left. The home owner doesn’t see it in such stark terms, of course; he’s destroying the house in order to save it. The lender can afford no such confidence; he must plan for the worst. (I’m trying to put myself in the lender’s shoes here, not without effort.) Except in rare cases the home owner has no prior experience; he may well be a fool, and even if he isn’t, he may be launching a project he lacks the resources to complete.
    One encountered such people from time to time. When I was just out of college I came home about an hour past dawn one morning to overhear an argument under way in an old house across the street from my apartment. The house was occupied by a young couple with a small child. Over a period of several months the husband had disassembled most of his front porch, presumably with the idea of rebuilding it. At the time of the argument the porch consisted of the wooden deck plus the roof above, the latter propped up precariously by two-by-fours at the corners. There were no pillars, railings, or steps—I remember one day the small child and a little friend having a peeing contest off the side. The only access from the sidewalk to the front door was a stepladder propped against the deck where the stairs had been. The fellow had gotten the project to that point perhaps a month or two previously. There’d been no progress since.
    That was the subject of the argument. “You take the whole front porch apart and then you just leave it like that! I can’t get into my own house!” the woman shrieked. “I can’t live like this!” (Many a rehabber has heard these words.) The woman may have thought she had problems, but the party who arguably had worse ones was the holder of her mortgage, the value of whose collateral had just gone down the pipe.
    Thus the Noh ritual. The lender will want, first of all, abundant documentation establishing that the loan applicant is a person of means; he’ll want an appraisal, to confirm the starting value of the house; he’ll want plans indicating in detail the work to be done; he’ll want a contract with a qualified builder to perform the work for a fixed price, plus an oversight process to ensure that the work is done competently and in a timely manner; he’ll want tax returns and plats of survey and credit checks and builder’s references and a building permit and insurance policies and four or five million other things that at the time I imagined had been dreamed up by a bunch of former fraternity rush chairmen cackling: Let’s see if we can get the dumb son of a bitch to do this . However—again, I’m trying to be evenhanded about this—it may well have been the case that they were the product of some bean counter waking