To build or not to build, that is INDEED the question
I'm in the process of saving up for a home, when an opportunity arises to acquire a block of land in a brand new estate just down the road from where we live now.
We find out that the first two stages have sold out and the third is selling fast. With each stage the land price goes up around $10,000 or more, even with this in mind the land is still pretty expensive (we then learn that a year earlier the land would've cost less than half of what we're paying now - damn).
We grab a brochure and have a look at the blocks available. At this stage the whole area is just dug up dirt so it's not possible to physically view the location for its suitability. A decision must be reached as there are buyers coming out of the woodwork. We are told that the land will have very little fall (slope) which sounds great however as we are to learn a few months later, this fall is lot more steep than we expected.
We pick one of the corner blocks and put down a small holding deposit for it.
I start contacting home lenders to see what funds are available for loan, which of course means endless questions and probing into our financial situation. In the end we find a lender through a family contact who is able to give us enough to make the whole thing feasible.
So after some discussion, we decide to go for it.
"The future has just taken route in the present."
We go to the land place and sign up for our block and pay our official deposit. Suddenly we're bombarded with documents to sign, things to read and forms to fill out. Way too much information to process. We get our contract which needs to be read by a solicitor. We meet up with one and he goes through it so fast that I don't understand a word he says. In the end he says it's OK.
We meet up with the lender, explain to him that we have land to buy but no house chosen as yet. Everything is going OK. Lots of paperwork from the bank, lots of things to digest, way too much to comprehend, so many things to sign. The land has a covenent as big as a phone book: Can't do this, can't do that, I am told that in the end this is a good thing as this improves the quality of the area, but all I'm hearing is negative points. I'm getting multiple copies of documents sent to me, each one seems to imply that I'm responsible for anything that goes wrong. Nothing seems to be supportive of the humble buyer. The pressure is now on as there are payment dates to be met and they can't be missed.
Start the display house visits. They never end! Heaps of designs, heaps of questions, heaps of homes that are too expensive.
Time is moving on and things seem to be proceeding well. The solicitor is organising the paperwork side of things as the settlement date drawers near - bless their hearts. Suddenly I make a botch up somewhere and the settlement expiry date is missed, uh oh penalty payments! Meanwhile I get told by my lender one late afternoon that I now have to pay 20% of the land deposit and not 10% as I first thought - by the following day no less - what a kick in the guts that news is! I go to my credit union the next day and draw up a cheque. It gets passed onto my solicitor who will take care of settlement. Whew, all is good again. Suddenly there is a problem. At the 11th hour it's discovered that my cheque is from a credit union and not a bank and can't be accepted. WHAT!!! It's all coming from the same account so what's the diff!? Still, no go, the issue must be resolved immediately as penalty payments are in place and settlement cannot be completed (I find out later that had the credit union known I needed a settlement cheque they would've told me that I needed to go to a bank. But I didn't mention it and they didn't ask. A painful lesson learnt!)
So I leave work in the day stressed to the max, go to the credit union office in the City where they say "sorry we need the original cheque", but that's with the solicitor in Glen Waverley! So I go to the solicitor and pickup the cheque, then go to the Dandenong credit union office instead and get the cheque cancelled, I then get some other form from them that I need to take to an actual bank down the road, who in turn give me the bank cheque I need, I then return to the solicitor and give the cheque to them with literally 10 minutes to spare before the cut off period.
Next day I get a call from the solicitor saying settlement has gone through. After recovering from the saga of the previous day I couldn't care less.
WHAT THE HELL HAVE I GOT MYSELF INTO?
Houses, houses everywhere and not one to buy. So many places, so many offers, where does one turn!
Eventually find a good one that we like with a large company. We get told that they have a special deal going on - for a few thousand bucks you get heaps of excellent extras - which is due to finish the day we are there! On top of that, the house price is due to go up the following week (typical). So we put down a holding deposit which guarantees us all the bells and whistles at the cheaper price. Spend the next couple of months going over the plans and refining the costs.
Troubles are brewing though as our land is in fact on a slope and we are quoted $11,000 for site costs - we expected some site costs but not THAT MUCH. This results in a shuffling of the plans and the removal of some features in an attempt to bring the price down.
We eventually settle on the house plan and it all looks great. Best of all, we still have a month and half to go before the huge $14,000 government grant is due to finish. Time for the house people to get the contracts ready.
Unbeknownst to us (but to be expected I guess), the house place is inundated with people buying homes at the last minute and there is a delay in getting the contract ready 'cause the contract writers are all "flat chat". Not only that but when the contract turns up it's full of mistakes. To top it all off, the base house price is higher than the one we agreed upon.
We question why the price hike and the reason given is because we used the initial housing deposit for too long (5 months) without making a formal decision to proceed, and now the new prices have been in place for a while. This price jump is an unexpected drain on our finances. Technically it's too expensive for us to afford, however we have the option of signing the contract now, and reviewing it later to make further changes - the house people tell us they are doing this with a lot of people as they can't get the contracts formally completed before the end of the year.
With two days to go before December 31st 2001, we visit our house builder representative at his actual home and sign the contract with him. Fortunately we put in a clause stating that if we can't get the price agreed like we want, we can cancel the contract. Good news is that we're still eligible for the $14,000 grant. Phew made it with two days to spare!
We confirm with the house people shortly after that the new prices are to stay. With that in mind, we take out every single change we made to the design, down the last couple of dollars. Every extra item is removed, including the special deal that was part of the original attraction to the home in the first place. In the end we're still $500 over our limit and the place is a bare bones shape, to the point where our attraction to it is lost.
The writing's on the wall. The place is too expensive, the house people won't go back to the originally agreed price so we advise them that we are not going to proceed - and they just loose the sale. The contract is cancelled, months and months of planning and sorting out details have been for nothing - which is a shame 'cause we've agreed on a top design which is more of Michelle's work than theirs. On top of that, we miss out on the $14,000 grant, which has now been reduced to $10,000 until June 31st 2002. A sad day to be sure.
We're back to square one, however this time we want someone to build the house that Michelle designed, until we realise that it can't be built by anyone except the housing firm we just cancelled with because they now own the copyright to the altered design. This a shock to us especially as Michelle modified their original design so much that it wasn't even recognisable as their home, however since it appeared formally in the contract, it's theirs to keep (another lesson learnt).
So we're back to visiting the housing displays again - below square one if you will. The clock is ticking and we now have 6 months to find a replacement home to take advantage of the $10,000 government grant.
We go to another big housing place who are offering huge discounts on their homes, we pick a nice one out and ask if we can remove two internal walls to make the rooms a little larger, they reply that to do that will put the price back up to the full amount. I can't believe it, these walls don't do anything except divide the space! Either way, they just will not budge on this change. So we just walk out the door empty handed.
We visit a range of smaller housing places and the people there offer excellent service who practically bend over backwards to help us work with their designs so they can fit into our budget, alas in each case the costs are just too high and sadly we have to leave them.
Finally fortune smiles on us as we eventually find a place purely by accident that is exactly what we like and CAN afford - and as a bonus the housing people quote our site costs at $7,000 instead of the original $11,000 as quoted by the other people! It is now early May 2002 and we have just under two months to get a contract together before the $10,000 grant finishes at the end of June.
Despite everyone's best efforts within the short time frame, and with continual changes to the design specifications, as well as the time it takes for the contract to be prepared - including the revisions - the June 31st deadline is missed and as a result the government grant is reduced from $10,000 to $7,000. This is a big blow to our financial planning, but the end result is that we're able to finally signup and buy our home (we celebrate our contract signing by having a cheap pizza in the place next door to the agent's office).
By November 2002 construction commences and there is much rejoicing.
Lessons to be learnt
- Don't use a credit union cheque to pay for settlement!
- If you design your own house and get someone to draw it up, make sure YOU get to keep the copyright. Otherwise they will own the rights to it and you won't be able to build your home that you created with anyone else
- Don't discount the smaller house places off-the-cuff, they can offer a pretty good service and in some cases offer extra features that the big housing places don't give you. On top of that they can be very flexible when it comes to making design changes at the last minute
- Try and visit your building site every couple of days to see if there are any errors, and if there are, be sure to alert the builder immediately. You'll find in some cases that the mistakes are legitimate and understandable
- Keep all of your paperwork together, sooner or later you'll need to refer to it. Be sure to keep a copy of everything you send by fax, email or snail mail
- It helps if you have a good repore with your housing representative during the intial buying phase. If you're comfortable with this person then going through the buying/configuration process will be a lot more enjoyable (as it was in our case).
- When doing budgets, allow for potential site costs, legal fees and other expenses that might not be intially apparent
- Remember that the price of most new homes does not include carpet. Be sure to set aside a few thousand for that.
- Consider buying an established home. Ironically while this whole saga was going on, friends of mine were buying and moving into already established homes without any problems. That's gotta be easier than putting yourself through the house building wringer!
- Building a new place for the first time creates a lot of stress and it isn't for the feint hearted - especially when you really feel like you're digging a deeper and deeper hole for yourself. Not being the most mentally/emotionally strongest person in the world, I admit the pressure kinda took over on a few occasions. Fortunately I had great support from Michelle and her parents during this time and was able to get through it. So if you can get this kind of support from friends/family, it will make the whole thing easier to deal with. As it is we've learnt a lot from this experience for next time... if there ever is one.
I JUST HOPE IT WAS ALL WORTH IT
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