Page 2 - Kiowa County Bank

appraised value of the home to be built, and that number determines how much money a
bank will loan to build.

It sounds like a relatively straightforward process but, in reality, and especially in the reality
of Kiowa County, it’s frequently far from simple. The first challenge is the shortage of
appraisers. “There just aren’t that many appraisers in this part of the state,” says
Lening. “Sometimes we have to go far enough away that the appraisers aren’t familiar with
our county, at all.”

The second challenge is that not all appraisers appraise in the same manner. While the
rules for appraisal are spelled out, no set of rules can cover all the potential situations,
resulting in gray areas where different appraisers appraise differently. For example,
appraisers are instructed to look “nearby” for comparable houses. However, one appraiser
may define “nearby” as within the radius of a certain number of miles while another may
define “nearby” as only those houses located within the same county. Obviously, how an
appraiser defines “nearby” can be the deciding factor in whether or not prospective home
builders get a loan sufficient to build their new house.

In a large, sparsely populated county like Kiowa, houses are rarely put on the market, which
makes finding a comparable house almost impossible. As stated, even if a comparable
house is found, other factors—such as location—will automatically reduce the value of the
house. For example, Kiowa County is considered to be a “depressed” county;
consequently, the value of the house is potentially reduced by up to 20% simply because
it’s located in Kiowa County. “These things just hammer the value of the house someone
wants to build,” Lening states. “In the end,” he adds, “a new house built in Kiowa County
will usually be worth about fifty cents on the dollar, so that’s all we can loan.” The
result? “People have to come up with a 50% down payment. That’s a hundred thousand
dollar down payment on a two hundred thousand dollar house. Most people just don’t have
that kind of money.”

The tendency is to blame the local banker, but, as a wise man once warned, don’t kill the
messenger. “I can’t get a house built for my family, either,” Lening admits with a hint of
frustration. However, he is optimistic that some change might be on the horizon. “Things
are beginning to loosen up—at least, a little,” he says.

Kiowa County National Bank:
Kiowa County

1220 Maine Street Eads 81036 11 12 32539 27,920
Total for Kiowa County 1 Office(s) 27,920

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