Home Mortgage Alliance Corporation (HMAC)

Realtors and lenders offer insight into the purchase of a ‘unique’ home

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Published Date 3/12/2024

That geodesic dome you see along the edge of the freeway or the house shaped like a giant cylinder on the top of the hill. You know the ones — those “white elephant” homes that look interesting but stand out as if they don’t belong.

Realtor.com’s Anne Miller says to Imagine living in a missile silo located in New York’s Adirondack State Park, or at the top pyramid of the Smith Tower, once the tallest building in Seattle. “If you are revamping an abandoned farmhouse or renovating a church, you’ll benefit from the enjoyment of seeing your vision emerge,” says Miller. “You may also reap benefits that a more conventional home couldn’t supply. The acoustics of an old church, the lofted space perfect for a home office in a reclaimed barn, the hand-carved molding of a cottage that’s almost impossible to find—those are hard to build new, much less a home in a cave or the purple princess Victorian of your dreams.”

She goes on to mention how other homes may reflect a cutting-edge futuristic village, such as the tiny house movement — especially those made of shipping containers.

While buying an unusual home can be the adventure of a lifetime, “unique” comes with challenges. “If you’re interested in buying a unique house, what you need to know can be summed up in one word: resale,” says Miller.

The cold hard fact: Most people don’t want to spend their retirements in your houseboat, quarry or renovated submarine—or raise a child in a cave. So finding a potential buyer for your underground abode, dream castle, or domed house may prove tough.

Of course, you can get lucky. Rare homes appeal to rare individuals, such as the missile silo home put up for auction on eBay. After a handful of TV shows worldwide featured the curious abode, a winning bid put $2.1 million in the homeowner’s pocket. But just because your strange house is meaningful to you and your creative spirit, don’t count on it being the hottest property on the market.

Of course, the house speaks for itself. If that missile silo or underground abode has the markings of an in-demand house such as an updated kitchen, an open floor plan or a beautiful primary suite, buyers may flock to it during these low inventory days.

Even then, however, red flags raise their banners — especially to those who need a mortgage to buy a home that is hard to value.

The #1 question in the mind of any lender is: How easy will it be to sell the property in the case of foreclosure? If the borrower defaults on the mortgage, the lender needs to be able to resell the property within a reasonable amount of time. Because of this risk, buying a unique house may be a challenging process. Even the resale value of a house relies on finding similar home sale prices for comparison—but where does the lender go to find that comparable if no other home is quite like yours?

While larger lenders will not want to take a chance on a non-mainstream property, occasionally small local lenders, familiar with an area’s unusual properties, will offer a loan. But at what rate? Or you may be able to get a mortgage with a hard money loan. These types of lenders are usually private investors or companies that fund investment properties, and they don’t have to adhere to the same regulations as traditional loans.

Since the lender is taking a greater risk with a unique property, this type of loan requires a heftier down payment and will have higher monthly payments, but generally close faster.

No one is telling you not to go for the gusto. But look hard and long before you leap. “Perhaps living in a strange house seems inspiring at first, but the reality is eccentric floor plans can make day-to-day living a more frustrating experience than living in a more traditional setting,” says Miller. “Will your grandmother’s antique dining room table fit in a curved great room? Can that small door accommodate a modern sofa? How do you light a soaring vaulted ceiling?”

She goes on to remind us that grocery shopping in the Adirondacks is not the same as in a suburb. Then there are other details to consider. “If dusting the tops of your bookshelves is rough now, imagine having to sweep spider webs from the gables of a Gothic cathedral.”

In the end, it’s about looking at the big picture. Owning a unique home takes sacrifice along with the passion you might have to own it. Calculate how much it will cost to maintain this place over time.

Realtor, TBWS

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