January 27, 2007

Kitchen / Interior Supply Selection Appointments Made

My wife made appointments with the Kitchen and Interior supply companies today for final selections. The Interior fitout selection is due for 2:00pm on August 17 and the kitchen fitout selection is due for 2:00pm on August 18.

I know my wife has some pretty strong ideas about the interior of the house so she's pretty much in charge of this side of things. She's leaning toward a color scheme including browns, but not going for a full brown/brown fitout, just some touches here and there. This will hopefully make the interior look relatively modern but it shouldn't age too badly when the brown color scheme thing goes out of fashion.

Posted by mnemtsas at 11:47 AM

October 26, 2006

'Bank Pack' Received

Huzzah! We received the 'bank pack', contract, and final drawings. It took 83 days and $1500 from signing the contract to get to this point. We can now take the documents to our bank and get final loan approval. We can also take the drawings to various contractors to get quotes to submit to the bank along with the documents from the builder.

Here's a couple of pictures of the house plans for those of you interested (click on them for bigger images).

The to-do-list for this week is:

1. Make appointment with kitchen sub contractor for kitchen fit out selection
2. Make appointment with interior supply company for selection of interior fitout of bathrooms/laundry/appliances etc.
3. Send out floorplan to carpet/tile suppliers for preliminary quote on carpeting and tiling
4. Send out site layout to landscape companies for quote on paving the rear and front driveway installation
5. Send out site layout to earthmoving companies for quote on installation of retaining walls and storm water.

Posted by mnemtsas at 11:08 AM

October 9, 2006

Landscaping / Retaining Wall Quotes Received

We got a couple of retaining wall quotes back today and one for the paving/stormwater.

Firstly, the good news, the paving/stormwater will be around $10,200. I was expecting $10,000 for the paving alone. So this is a good thing.

Now for the bad news. I spent 30 minutes on the phone to one of the retaining wall contractors and he detailed out the problems with retaining walls in the area we are building. Most of these problems seemed to involve rock and the trouble with shifting it. If they do hit rock when putting in the walls the cost of a drilling rig to get through it is $190/hr. Ouch. Anyway the two quotes we received were:

$17,500 + allow up to $10,000 for rock drilling
$27,800 (with no allowance for rock drilling so I guess these guys are expecting it).

These quotes are $10,000 more than I was expecting when we started this whole process. Unfortunately there's absolutely nothing to be done about it as the level of the house (and thus the height and nature of the retaining walls) is determined by the local council. Of course Murphy's law prevailed and they picked the worst height for the site they could have. Oh well.

Posted by mnemtsas at 12:06 PM

October 7, 2006

Footings Variation Received

I haven't posted for a while, simply because nothing has happened. It's been 9 weeks since we signed the building contract and today we received the engineers soil report and footings design.

The quality of the documentation and exactly what we were to do with it left a lot to be desired. I'm a professional engineer and I've got to say the drawings and report were thoroughly confusing to me, I'd hate to think how someone with no technical background would interpret them. The financial impact is an additional $1000 for footings (we had allowed $10,000) and another $500 for a site survey because there are no marker pegs on the site.

On the variations schedule there were 9 points and I had to ring up and get clarification on each one. The two that concern me the most are the level the council has chosen for the house. It means that retaining walls are now required around the whole block. Bummer. The other thing that bothers me is a cryptic mention of 'rock encountered' in one of the 5 bores taken on the site during the soil test. The contract variation just says 'owner to take note that rock encountered during soil test'. On asking this means that we *could* end up being charged more for the site to be cleared.

Our responsibilities duing the whole process are quite vague as are the order in which things are to be done. If I hadn't phoned the builder I would have had no idea that it is our responsibility to remove all soil from the site after they have levelled it out. I also am very unclear as to when we can have the retaining walls installed. To me it makes sense to have them done after the block is levelled and before the foundation is layed to allow access to front end loaders and so on. However, the person I spoke to on the phone at the builder suggested we don't put down the retaining walls until after the house is built.

This doesn't sound right to me.

Posted by mnemtsas at 4:08 PM

October 6, 2006

An Interesting Phone Call Part 2

So I jumped on the phone and called the builder about having the retaining walls installed before the house is built. They put me through to someone who was a 'project manager'. He basically listened to my spiel, agreed with me, and then said it was up to me to negotiate this with my 'site supervisor' when we were assigned one. Blah.

Posted by mnemtsas at 1:58 PM

October 5, 2006

An Interesting Phone Call Part 1

One of the retaining wall contractors rang me just a short time (kudos to him) after receiving the request for quote. He was strongly emphasizing the need to have the retaining walls installed before the house was built or costs will be considerably higher. This goes completely against what I was told by our builder here. The retaining wall contractor said 'under the act' that we were to be given reasonable time to install retaining walls between levelling the land and preparing the land for laying the foundations.

I need to call our builder immediately and get this sorted out.

Posted by mnemtsas at 12:13 PM

Floor Coverings Quote Received

We've decided to go with hard floor coverings (tiles or floorboards) in the living areas of the home and carpets only in the bedrooms. This will wear better if we decide to rent the property.

We got a quote back today for this:

$1600 for carpets
$4400 for tiling/floorboards

Total Cost: $6000

When we get closer to the house being actually built we'll decide on the actual floor covering we want.

Posted by mnemtsas at 12:02 PM

Building Contract Signed

Went and saw the salesman in his office today to sign the building contract. First piece of good news was that the house plan was given the preliminary go ahead from the local council despite the problems I discussed yesterday. Of course there is a chance that they may change their mind and we may end up having to alter the plan to comply with some bureaucratic requirement. This could potentially mean more costs.

The building contract we signed was the standard contract offered by the Housing Industry Association here in Australia. Using the standard contract, written in plain English makes the whole process a lot easier to understand. The salesman was great and took us through every section of the contract and explained its purpose and potential effects on us. Key things that came out of it are:

  • The contract includes a 48 hour cooling off period.

  • The payment schedule was laid out. It's in 5 equal installments with the first payment due after the concrete foundations are paid. Interestingly the contract includes a provision to allow the last payment to be held over until the client is happy with the home. 'Happy' (according to the contract) means that the standard of the new home is at least that of the display homes presented by the builder.

  • Fairmont Homes seems to offer a fixed price contract, and discards the section of the contract that allows for changes in contract price and the builders costs change. The allowable change was something like 2% per month of the contract.

  • The Housing Industry Association outlines the mediation process between the builder and client clearly in the contract. The HIA actually mediates this process themselves and provides both parties with advice if a fee is paid (presumably to stop trivial complaints).

  • The contract does include some time lines but there doesn't appear to be any way of enforcing them and no mention is made of time taken to get the concrete foundations down, just time to build after this happens. 130 working days after foundations going down is the expected time period.

  • The builder warrants the home for a period of six months. The salesman tried to tell us this was not transferrable to a new owner but this sounds like it would contravene Australian consumer laws so I'll need to look into this.
  • The whole process took a bit over an hour and included some preliminary selections for the house such as the shape of internal archways. It would have taken longer but the salesman's printer ran out of ink and some of the paperwork was not signed. This will be mailed to us in the next week.

    In spite of not signing some paperwork with the main contract signed and the deposit paid the actual process of building can start. This will include drawing up a site plan, conducting soil tests and writing engineering reports, and submitting the plans to council for development and building approval. We've been told 3-4 months from today we can expect the foundations to go down. Here's hoping it's only that long!

    Posted by mnemtsas at 10:53 AM | Comments (3)

    October 4, 2006

    Getting Quotes

    OK we're back from holidays today. I spent a couple of hours marking up copies of the house/land layout for faxing out to suppliers for quotation purposes. I had four marked up plans showing:

    1. Retaining wall positions and height plus including the design table for the walls as supplied by the engineering report.

    2. Areas of the house to be carpeted and areas to be tiles.

    3. A site layout showing likely stormwater drainage and including a total length of stormwater likely to be required.

    4. A site layout showing the total area to be paved and the area of the driveway to be paved.

    Once I'd prepared these drawings I faxed each one to several suppliers asking for quotations within 7 days. These quotations will help with our own budget but will also be supplied to the bank for finalizing the loan process.

    Posted by mnemtsas at 11:54 AM

    September 25, 2006

    Spec Home Design - First Looks

    Much walking around of display homes today. Before I get into the houses we've looked at I'll just quickly discuss the market that we see our home targetting and the requirements we believe these segments have.

    1. Two mid level income couples with no children or 1-2 very young children.
    2. Couples looking to downsize with no children at home

    With these two segments in mind we see the primary requirements of the house as being:

    1. High street appeal, a front elevation that is fashionable and attractive. But nothing too 'leading edge' that may look dated too quickly.
    2. Internal fixtures that give an impression of quality without going too over the top. The suburb where we are building will not support a house that is fitted out with the best of everything, but certainly some improvements will be looked for by younger couples looking for some 'wow' factor. These improvments will largely be confined to the kitchen and bathrooms, as these allow for the greatest amount of individualization.
    3. An internal layout supporting either a young family, or a couple with diverse interests. To us this translates to a 3 bedroom or 2 bedroom + study configuration. It also means that a separate master bedroom bathroom (en-suite) and living area are vital.
    4. 2700mm (9ft) ceilings for a feeling of extra space.
    5. Covered outdoor entertaining area.
    6. Low maintenance modern garden.

    Based on these requirements, and the size of the land we found ourselves looking at the villa homes (suitable for a 8.5-10m (28' to 33') frontage) and courtyard (suitable for 38' to 43'frontages) homes. The width of our land (11m, 33') means we are restricted to single garage versions of the courtyard homes which are almost universally double garage designs. We are happy to settle on an existing design of a contract builder as we believe this will lead to the house being completed faster and will lower the overall cost of building.

    The two designs we saw today were the:

    Heathcote 180 - AV Jennings

    This is a nice design, a courtyard home and with a single garage pretty well suited to the size of the block. I particularly like the way the bedrooms/bathroom are separated from the living area. The only real downside to design of the house is the width, the courtyard down the side of the house would be quite small. The other major downside is the price, the base price is $105,000, which is a lot more than what we wanted to spend. It does, however, include a lot of things as standard that other builders charge extra for.

    Hamilton - Fairmont

    This design is the real minimum of what we wanted to build. It meets all of our requirements but the front lounge feels small and we did not like the bedroom doors coming off the main hallway. However, the price is right, just $89,000 for the base price.

    No need to make a decision yet. We're still waiting for a lot of design brochures to arrive from different builders, I'm sure we'l find what we want.

    Posted by mnemtsas at 9:50 AM

    September 22, 2006

    Land Contract Settles

    The contract on the land settled today. As of 12:00pm we are the proud owners of another 330 sqm (about 3700 sq ft) of vacant land. It all happened today without any interaction on my behalf, other than receiving a phone call from the real estate agent, the home loan broker, and the conveyancer all telling us the contract had settled.

    Posted by mnemtsas at 9:46 AM

    September 21, 2006

    Checks Paid

    Dropped the payout check for the land into the conveyancer. Other than having a car accident on the way it all went smoothly.

    Posted by mnemtsas at 9:46 AM

    September 20, 2006

    Final Payout Figure Received

    We received the final payout figure on the land, $64,034. My wife went to the bank and drew a bank check for the amount. Man I could buy a nice car with that money ;-).

    Posted by mnemtsas at 9:47 AM

    September 19, 2006

    Loan Documents Received

    BankWest couriered the loan documents for the land to us today. We duly signed them and couriered them back to their lawyers here in town. So that part of the loan is closed out.

    I was notified by phone that the refinance for our existing home went through with no problems and we should see the $65,000 less fees in our account by close of business today.

    Posted by mnemtsas at 9:48 AM

    September 8, 2006

    Weighing up the Designs

    My wife and I sat down and did a decision matrix on the three designs we're considering. It became pretty clear that the Heathcote (AV Jennings) and the Portland Mk2 (Fairmont) were the two we would be choosing from. The other design just feels too small, and the bedrooms coming off the main hallway is a real negative to us. The outcome of the session was that price would likely be the final deciding factor. I should say that the price is not just the building price, but also the likely time to build and the associated interest costs. My wife will call both builders during the week and get some ball park prices on the upgrades we will need.

    Posted by mnemtsas at 9:52 AM

    September 4, 2006

    A Spanner In the Works?

    Made a phone call to the salesman today to make an appointment to sign the building contract. He returned the call and said that there were some potential problems with getting the house approved for the land we'd bought.

    Firstly, the council has a 40% coverage rule, meaning the total under main roof area of the house must be less than 40% of the land area. Secondly, they have a minimum of 60 sq m of private open living area as a requirement (this means the back yard must be at least 60 sqm). Thirdly they are not allowing any construction that requires retaining walls of more than 500mm high.

    Our chosen design includes an 'alfresco', which is basically 16 sqm of outdoors area covered by the main roof. If the council is silly they will include this in the total area of the house. If they're not silly they'll recognise that this is exactly the same as a verandah or pergola added later and they won't include it. Exactly the same argument can apply to the minimum open private living area requirement. In both cases we comply comfortably if the alfresco area is not considered to be part of the main house structure.

    I'll address the 500mm retaining wall requirement separately because of the sheer ridiculousness of it. Firstly, none of the vacant land in our development would be able to comply with this rule, hence according to the council, all this land must remain vacant. Secondly, 90% of the existing homes in our development are therefore, illegal. How dumb is this!

    The outcome of all this is that the salesman has put our site plan through to council for a preliminary approval just to see if we are completely wasting out time putting the final plans in. We'll find out more tomorrow.

    Posted by mnemtsas at 10:18 AM

    September 2, 2006

    Another Look at Spec Home Designs

    Another trip to a housing display village. A worthwhile one too! We went through a house today that pretty much met all of our requirements without being too expensive. As a bonus it also had what the builder called an 'alfresco'. This was simply the main roof of the house extending over a courtyard on the back corner. The courtyard was a decent size, perhaps 3 x 4m (10x13.5ft). This would save the trouble of putting up a pergola/verandah on the house when it's built. A saving of perhaps $3,000. Anyway here's the design:

    Portland Mk2 - Fairmont

    As you can see it meets all of our requirements. Again I liked the main bathroom/bedrooms being partitioned away from the living areas. The wall in the main living area has an interesting bulkhead built into the wall, it certainly is a feature and grabs the attention of someone first entering the room.

    Posted by mnemtsas at 9:51 AM

    August 28, 2006

    Getting the Final Building Quote

    We went to see the Fairmont Homes salesman today. He gave us a final quote based on our selections and talked us through the whole process.

    Firstly, we put the list of house requirements to him which he dutifully entered into his computer to produce a quote. He must have used an existing quote and modified it because there were a few things included that we didn't really want. The final price came out to $118,156. This was around $2000 less than we were expecting and still included roof insulation ($1200) and a full range hood for the oven ($350). So really the quote was around $3500 less than we were expecting. The main reason for this is that he ended up giving us the spa in the main bathroom for free ($1500 value) and then gave us another $1500 off because he said we were low effort customers. I think we're going to end up keeping the roof insulation but we're definitely going to drop the range hood, this gives a final price of $117,806. This doesn't include any upgrades to tapware or tiling in the bathrooms that we want, so I'd expect this figure to move up a little still.

    One other inclusion I should mention is that they are throwing in a 6 outlet evaporative airconditioning system. Pretty good deal really, I figure this has around a $3200-$3400 value and saves us time getting three quotes and so on after the house is built. This means the only jobs we are likely to have inside the house now are:

  • Installing a gas space heater (~$1500)

  • Carpeting the bedrooms (~$1000)

  • Floor covering to the living areas (~$4000)
  • The salesman threw a spanner into the works with regard to the floor covering to the living area. We had been planning to install floating laminate timber floors in the house with me doing the installation, saving about $1500. However this was on the proviso we could install the boards with the edges under the skirting boards. The usual method is to use 'quad', a quarter round wooden section to line the edges of the flooring. This looks ugly and we were hoping the builder would allow us to lay the flooring and them to attach the skirting afterward. Unfortunately it doesnt look like this will be possible.

    A brief discussion of time lines was had. It looks like the concrete foundations will go down 2-3 months after signing the building contract. The majority of this time is taken up by local government development approval (which takes 4-8 weeks) and local governement building approval (which takes around 2 weeks). With a building time of 6-7 months it looks like 11 months is the shortest time to completion we can hope for. I'm expecting 13-14 months. The only positive to come out of this long delay before building is that the first installment of the building loan will not be required for at least four months. This leaves us paying interest only on the additional $140,000 we borrowed to pay for the land during these four months. Quite manageable.

    One interesting point that came up was that the salesman had actually looked at the block of land we bought a few months before, interested in buying it himself. Apparently the vendor had wanted $170,000 for it, we paid $136,000. Clearly the vendor had toned down his expectations a little!

    The only outcome of the meeting was to set a time for next week to go and sign the building contract and pay the initial (unrefundable) $1560 deposit.

    Posted by mnemtsas at 9:44 AM

    August 24, 2006

    Applying for the Loan

    Spent a couple of hours filling out home loan application forms. There are some complexities that tripped me up here. I was counting on using some of our business income to get the loans but because we've been in operation only about a year the banks won't accept it. This means the loan will all be done on my wage, which means the title of the new house/land will have to be in mine and my wifes name. Originally we had intended that the titles would be in her name alone as she earns less money and there would be tax benefits. The upshot of this is that we may end up paying an extra 5-10% tax on any profit we make, as half the profit will be taxed at my marginal rate, which is 50.7%. Ouch.

    Posted by mnemtsas at 4:13 PM

    August 23, 2006

    Contract Cooled Off

    The contract on the land cooled off today. We're committed to the whole venture now. The contact was subject to finance but we only need to borrow about $70,000 so there shouldn't be a problem with this.

    Finance is likely to be a little complicated and the arrangement I've decided on is not the most tax effective, but is much more likely to be approved by the banks. Basically we're going to refinance our existing house to access some of the equity in that, and go to another bank for a combination land/building loan. The reason for this is that our existing lender charges a higher rate for building loans. The likely loan structure is:

    Existing Lender: Refinance existing house for an extra $65,000.
    New Lender: Take out land loan for balance of land cost (likely to be around $76,000). Get pre-approval for the construction loan from the same lender. We cannot get final approval for the building loan until we've signed a building contract.

    To handle the work for the loan I've chosen to use the same person that handled the loan when we moved into this house, and also helped with the loan on our last house. I've got an established relationship with him and I can count on him to allow for my little foibles!

    Posted by mnemtsas at 4:12 PM

    August 21, 2006

    Land Contract Signed

    Around 6:00pm the agent came round with the sale contract which be both signed. Our 2 yr old son thought the agent was hugely hilarious! Anyway, we have a 48 hr cooling off period. Still plenty of time for us to chicken out.

    Posted by mnemtsas at 4:12 PM

    August 18, 2006

    Suitable Land Advertised

    The vacant land I mentioned last entry is still up for sale. Asking price in the advertisement is $135,000 to $145,000. Going back through some old newspapers we've found adverts for the same land for sale for $150,000-$160,000. Clearly the market is slowing down a little or the person selling the land has expectations that are unrealistic. After some discussion we've decided to put an offer in on the land. Rather than put in at $135,000 we've decided to go slightly higher at $136,000. We figure an offer at the absolute bottom of the asking range is less likely to get accepted. It also means we will knock out any offers at the absolute bottom of the range. If we get the land at this price it means we will come in well under our budget of $280,000 for house/land total.

    Posted by mnemtsas at 4:09 PM

    August 20, 2000

    Offer Made and Accepted

    Rang the real estate agent at around 9:00am this morning and told him he I wanted to put in an offer on the block of land. He duly faxed me the standard offer form. An offer for $136,000 was faxed back. Within 10 minutes he called me and said even though the offer was on the low end of the asking range he would put it to the vendor. He rang again 10 minutes later explaining how the vendor was very dissappointed and really wanted more. I explained to him that the land was for investment purposes and would rather look elsewhere for land than pay more. He accepted this and spoke some more to the vendor. Two similar phone calls took place and about an hour later the vendor accepted our offer! Woohoo!

    The agent made arrangements to come see us at our house tomorrow night to sign the sale contract.

    Posted by mnemtsas at 4:11 PM