Collectors Issue 2007
Trying to pin down the appraised—and spiritual—value of a former monastery
by Paul Wilcott
“We don’t have a kitchen.” I repeated it back to him not as a question but in the same way he had, as a statement. I had the vague hope this might make it easier to understand. I would’ve said it backwards if I’d thought that would help.
What does one call a room furnished with stove, refrigerator, sinks, cabinets and dishes, where food is cooked? Most people would say “a kitchen.” We had one of those.
But to an appraiser, if such a room is “below grade,” i.e., in a basement, it’s not a kitchen. Nope. For a room to be a kitchen, it must be above grade, presumably on the ground ﬂoor. (I lacked sufﬁcient courage to inquire whether a kitchen could exist on a higher ﬂoor.) So, the room where my wife, Ann, and I had cooked for the previous year was not a kitchen.
This was deep. Not the sort of thing one expects to encounter in real estate transactions.
I should not have been surprised. I have a law degree, I’ve been a real estate broker, I’ve been in the mortgage business, I’ve taught a variety of real estate courses. I know a lot about appraisals. Never mind all that. I was surprised anyway.
When purchasing and owning an interesting old house, appraisal can be bizarre, frustrating and irrational. Our appraisal misadventures began in 1998 when we saw an advertisement in Adirondack Life for a monastery for sale in Saranac Lake. We hurried right up from Brooklyn to have a look. Anybody would.
Located on Franklin Avenue with a view of Lake Flower, the building turned out not to be as institutional-looking as we expected. It was a Queen Anne–style pile with mullioned windows. Its peeling paint was the color of ballpark mustard.
The nuns who lived there had been cloistered until the Second Vatican Council of the 1960s. A few feet inside the front door was a wall. There was a door in the wall, though, and when the abbess opened it we were treated to a view of the front staircase. It was dramatic and beautiful with dozens of balusters and, as we later learned, it was made of quarter-sawn oak.
The house has a basement that contains 10 rooms (none of which is a kitchen—see above), plus three stories, an attic, a widow’s walk, an icehouse, 14 to 16 bedrooms (many with cure porches attached), a bakery, a melange of bathrooms (some working, some not), porches across the back and front, and two staircases in addition to the grand one that had caught our eyes.
The house was built in the 1890s, purportedly as a small hotel. Cure porches were added at some point, and for many years it operated as Hudson Cottage. In 1953 the fresh-air treatment of tuberculosis having been replaced by drug regimens, the house was given to the church, and the nuns moved in.
When we ﬁrst saw the place, deferred maintenance had brought it to a horror-movie state. Plumbing and wiring and heating were creaky and dangerous. It needed painting and a roof. And we decided immediately that we had to have it.
Given sufﬁcient space, I could explain that seemingly lunatic act, but in brief it had a lot to do with the front staircase. It was irresistible. There. I’m sure that makes us seem less crazy.
In those giddy moments of “We’ll take it, where do we sign?” we didn’t anticipate the appraisal adventure we were about to face.
Ironically, the characteristics that made us want to buy the old house and that continue to please visitors make it very difﬁcult to appraise. That’s because appraising real estate is based on an assumption that houses are mostly alike. Our problem-child parcel is dear to us because it is unique. In the American way of doing real estate, uniqueness is mostly a liability. That’s something one should take into account before writing a contract to buy a monastery née sanatorium née small hotel.
The value of residential property is established primarily by comparing properties of similar size and condition that have sold recently in the same or almost the same neighborhood. Clearly that was going to be a problem for this charming, falling-down old barn. There was and is no comparable house anywhere. That’s why we wanted it. This dilemma is usually solved by ﬁnding three comparables that are similar enough to pass the smirk test, if only barely. Failing that, a lender will sometimes make a loan to a very credit-worthy borrower and keep the loan in its own portfolio rather than sell it into the secondary market.
Another approach is to consider how much income the property could produce. For us that was a nonstarter, since a bed-and-breakfast or inn would produce far too little income to justify a loan of the amount we were seeking. We didn’t have the proper zoning or sufﬁcient parking to generate signiﬁcant revenue.
We were a couple of weeks away from the closing date when it became undeniable to all concerned that there was a problem with the appraisal. I had asked about it along the way and was told that the appraiser was having trouble with comparables. “This is a hard one,” he was reported to have said. Too hard, apparently. He ﬁnally decided that the house was unworthy of a loan of any amount. Ann and I found that a little distressing.
All was not lost, though. It was conveniently determined that the man’s “diabetes was acting up,” so a new appraiser would be assigned. (It’s not considered good form to ignore a completed appraisal and ask for one that is more to the buyer’s liking. To get a second opinion, there has to be a good reason, something like diabetes acting up.) Subsequently, we saw nothing of the ﬁrst appraisal. We did hear that the diabetic had gone into another line of work. The monastery appraisal was his last.
Appraiser No. 2 was to give an oral estimate of value within two days and the ﬁnal written product a couple more after that. Ha. Closing was approaching, our rate lock was expiring. We were losing hope and patience. We began thinking about how we could adjust to life without that staircase.
The real estate agent had a solution. She set the nuns to praying for completion of the transaction. In my view, God has more things to worry about than a small-town real estate deal, but I wasn’t the one being asked to pray. And we did get to closing. So there.
In the years since, we have continued to encounter nutty difﬁculties in assessing the value of our former monastery/cure cottage/hotel. Some of the problems seemed to have little to do with predictable appraisal matters.
Appraising is governed by a set of rules, similar to the way accounting is governed by Generally Accepted Accounting Principles, so one would think appraisers would pretty much agree on the value of any given property. (Only an appraiser with a sudden health problem would come up with an anomalous ﬁgure.) Lenders rely on them to do just that. It wouldn’t do to loan 80 percent of X dollars for the purchase of a house if other appraisals might come in at half X or twice X. It’s therefore believed that appraising is more science than art. Ann and I are not so sure.
In the ﬁrst year we owned the house, we put on a new roof, painted it and tarted it up in all sorts of ways. So when we attempted to reﬁnance and liberate some equity, we were a little surprised that appraisal science deemed it to be worth $5,000 less than we’d paid for it.
When the appraiser had come over to do his inspection tour, we had been charming in the way that only two southerners talking to a Yankee-they-want-something-from can be. Just before the man arrived, Ann put cookies in the oven down in the basement, in the room that isn’t a kitchen, and the aroma was wafting up the gorgeous front stairway of quarter-sawn oak when he came through the door. Try as we would, though, we couldn’t get an enthusiastic response from the guy. I’ve shown the house to hundreds of people, and so far he’s the only one who has been indifferent to its charms.
In retrospect, we were able to develop some dark suspicions. At one point he told us that as a boy he attended Mass in the very room where we were standing. Usually that is an indication that things are breaking our way. More than once, for example, I’ve had former altar boys not give me trafﬁc tickets when they learned that I owned the monastery. This time was different. The appraiser went on to say that when his mother and father had divorced, his mother had been prohibited from receiving communion at the monastery. He believed that this was at the behest of the nuns, rather than the practice of the entire Roman Catholic church.
No one can know with certainty how much his bad experience with the house affected the ﬁnal evaluation, but the lender thought it explained everything. We were assigned a new appraiser, and we completed our transaction.
We’d done the dance twice and been through four appraisers, so we fancied ourselves pretty savvy when a couple of years ago we again wanted to reﬁnance.
We didn’t ﬁll out a single form until we found out who the appraiser would be. The one on offer this time was not on our ever-lengthening blacklist, so we applied. Once again the value came in substantially lower than expected. I read it with interest and a good deal of battleﬁeld expertise.
By this time we had installed a kitchen on the ground ﬂoor, so that couldn’t be the problem. I was a bit miffed, though, that we didn’t get extra credit for having a spare one in the basement. Two kitchens are invaluable when both spouses enjoy cooking.
It took a while, but ﬁnally I found the problem. The guy seemed to have missed the whole third ﬂoor. That would not be an easy omission to make. It consists of a sitting room with attached cure porch, two full baths, a mini-kitchen (there’s that word again), four bedrooms with cure porches, two bedrooms without cure porches, and a 300-to-400 square-foot stair landing/hallway. Leaving out all that would, indeed, reduce noticeably the ﬁnal assessment.
With just enough forcefulness to make my point, I suggested to the loan ofﬁcer that her institution should hire better people and that no one should ever have to pay for such slipshod work, and so on. I think I might also have inquired quietly about his drinking habits. She would get back to me.
She did. It turns out those rooms on the third ﬂoor where people sleep, eat, bathe, sit, keep watch on the dead people in the cemetery out back—those rooms are like the one in the basement where meals had been prepared for decades. They’re not rooms at all. No sir. It’s in the appraiser’s rule book. If a room has a ceiling that is slanted the way rooms on upper ﬂoors of old houses often are, it can’t be counted as part of the house. And here I thought we got extra points because such rooms were—to Ann and me—just charming as all hell.
That’s not all either. Those purposely unheated cure porches don’t count, because—well for pity’s sake—because they’re unheated. And here for years we had been removing the radiators that the nuns had added.
In the basement, it wasn’t just the kitchen that couldn’t be included in the total. The entire thing was a problem—all 10, large, much-used rooms. It wasn’t just that the basement was below grade (as basements tend to be), but it contained yet another deeply offensive feature—a door to the outside.
These misadventures point out some of the irrational unwieldiness of appraising any unusual house. But this particular house presents another kind of problem, one that will forever remain unsolved. Its core asset, the characteristic most valued—by us and most of our friends, family, even casual guests—simply cannot be thought of in ﬁnancial terms.
The house is enchanted.
Something happens to my wife when she crosses the threshold on a Friday evening after we ﬁght our way out of New York City and make the 300-mile drive. Her type A self is replaced by a woman mostly at peace, living in the moment, baking, gardening, being quiet.
Often sleepover guests spend a lot more time sleeping than they expected to. They seem to have a script they follow upon waking: “I rarely sleep so soundly as I do here. There is something about this place.” In midsummer we have 20 or 30 people come for a week of porch sitting, eating, boating, hiking and conversation. When it’s time to go, there is enough tearful driveway embracing to raise the level of Lake Flower.
For an appraisal of this house to be true and complete, the form would have to include a blank for Enchantment Factor. It would have to give credit for the resident angels deeded by the nuns. It should include something about the way many people in Saranac Lake feel a special affection for the place. And, of course, credit would have to be given for the magical allure of the front staircase.