30 Jun 2017

Our Home Tender Process

Firstly, an update we finally own our land!! It was finally registered and we settled last week. So of course now that it's ready, we want to start building as soon as possible. 

However, we're still going through the tender process. We have progressed a lot in the past few weeks but it has been quite a long process. 

Initially, I thought it's just about making sure walls, doors and windows are where we want it to be. But I've learnt it's also the time we need to be specific about the details we want in our home because firstly, this becomes the contract between us and the builder and any reviews and changes after we sign will be an added cost. Secondly, depending on the change they may not be able to do it because we didn't raise the request earlier and it's too late to make the changes. Thirdly, we provide the signed contract to the bank to reassess how much we actually need from them, so having a quote close to how much everything will cost will minimise surprises and monetary shortfalls. 

So we've already been deciding on things like what kind of floors we want, how our ceiling is going to look, and how we think we'll use our spaces. 

I thought I'd share some of the initial hurdles and surprises we've encountered to date.

Covenants 

What are property covenants? They are rules set to help guide or restrain how homeowners build and alter their property. All homes have it and it's established and policed by your local council. That's why depending on what you want to do to your home you may first need approval from your council to ensure it meets their covenants. The estate we purchased our land from has, in addition to the council's rules, their own covenant that we must abide by. This information was given to us when we received and signed our contract, but admittedly we didn't review and question every item. 

So now we learn first of all our home has to be fully rendered, no exceptions. When we went back to check out our land last February we drove around the estate to see if any homes were able to get out of this clause .... nope. Every home there was rendered. Even after we requested for an exception it was declined. Don't get me wrong rendered homes look great, but it is pricey, and then there's the ongoing maintenance cost to keep it looking great. So already we've had to spend 15K (this doesn't include the facade) on a feature of our home we didn't necessarily want. 

Flooring

I remember seeing a picture of a mutual friend's new home and loving her floors, in particular, the design of it. Actually, you can see her home as it was featured in Adore Magazine. Her timber floors were a herringbone design. I want this for our floors too! Our flooring design was non-negotiable for me and our builder can't do what I want so we're going to get someone else to do our non-wet area floors post hand over. 
(example of a herringbone floor design)

Ceiling

We wanted a shadow-line cornice for our ground floor space.
(example of how a shadow-line cornice/ceiling would look)

Initially, they said they could do it but then our builder's Construction Manager came back and said they refuse to do this type of ceiling due to issues they had with it in the past. I was really disappointed to learn this and expressed that to the builder. Learning this dampened my spirit a bit. I couldn't get over it. We were researching alternatives and although there was one, the supplier stopped manufacturing the product. In the end, we compromised with the builder to place a custom order for a cornice style that they don't offer but is available from their supplier. Still not happy but what can we do? 


Despite all these things, the arguments over priorities and taste, sleepless nights thinking about the details, it's .... fun! I love thinking about every room and specifying the little details we want. I've always said I'm kinda boring when it comes to style. I consider my taste to be plain, but modern and .... boring, but I'm surprised how much of an opinion I actually do have about certain things, or have a preference towards something. I get excited picturing in my head how each rooms is going to look cause we've designed it that way. 

It's exciting!! .... I just got to stop thinking about the ceilings. 

3 Jun 2017

Build Update

I knew building a home would take time. We've been warned and we expected the time it would take to build our home would be longer than what the builder or land developer says it will take. I'm not bothered by it, but I have to admit the time has damped the excitement of relocating. I'm sure once we do start moving the rush will come back. 

So an update post cause I've been reading other blogs and forums of people who have built homes and I enjoy reading and learning from other people's experience. If you are building or thinking of building check out Home One it's the whirlpool of home builders. 

When we put our deposit down for our land back in September they said it should be registered by Christmas. It's June already. However, we did get an email 2 weeks ago from the property developer advising us that they've lodged registration of all the land on our estate with the council and expecting about 2-3 week turn around for titles to be registered!

Woohoo! Finally some real progress.

This email was also a heads up to let us know to start contacting our banks to get our finances in order because soon after the land is registered they will want the rest of their money for the purchase of the land.

The bank application process has also been a roller coaster ride. Although interest rates have been the lowest it's ever been, banks have been tighter on lending. It's really no surprise, however frustrating never the less.

We've faced some challenges leading up to getting approved for a loan. Before we even started we wanted to know how much we could borrow so we weren't wasting our time looking at locations or homes that we could not afford. This is how we learnt how tight banks were being at the moment and even with substantial savings hardly any debt our serviceability was pretty limited. In hindsight, this was probably a factor which gave us, even more, confidence to pursue that "sea change" we've always thought about doing. If you can't afford Sydney you got to buy elsewhere right?

My advice when it comes to the finance side of things, go with someone who is going to work for you. Someone who will take the time to explain things to you over and over again if need be, someone who is honest and experienced. 

We've chosen a builder!! We choose the builder quite quickly. We were drawn to this one home because of how the stairs were designed. We dislike "grand staircases" - this is a personal preference ok. I dislike how a staircase and the void above one can take up so much space in a home. That's functional space you could be using. So the home we gravitated to was one where the staircase is kinda hidden behind the kitchen. I remember walking into this display home knowing it was a two story home, admiring the various rooms and then being surprised by discovering the staircase up to the second floor further down inside the home. We liked that feeling. I'm sure not everyone's style but was our deciding factor when it came down to selecting the home design.


We also realised later on it was a similar design to a home we looked at the first time I was pregnant. It was a one story home but there was a staircase behind one of the walls that took you up into the attic which was converted to a guest room, with its own ensuite and lounge area - it was a huge designer home. We always think about that home and we realised we gravitated to a design that was very similar. 

Although we selected an existing design home we've made changes. If we're going to live in it for the next 15-25 years we want to be comfortable. I don't want to be walking past a particular wall everyday thinking, "we should've moved this" - modifications like that. 

Of course changing the standard design costs money. Choosing high-quality finishes and making changes to rooms costs money, so whatever price you see on the website or catalogue for the home, expect to add another 100K to that price - and that's being conservative in my opinion. Yes, you can cut costs by doing some things yourself, if you know what you're doing. Yes, you can try getting more stuff included or minimise costs down by negotiating with the builder if you know what you're talking about. We've been fortunate to also know some people who are in the industry so we've had them review things for us, gave us the words to question costs, and validate plans. However, we're still at the mercy of the builders and their charges. I've struggled to comprehend certain things and costs especially when I apply my "Cam logic" to the situation. For example moving a room to the opposite side. My thought logic is 'I'm still paying for the room regardless why does it cost extra to relocate it?' Or another example is the kitchen island. When we measured the kitchen island in the display home against our plans, our one is smaller. To get the same size as the display home costs extra, but we're getting the bigger home design than the display home, so we've upgraded everything in the home, therefore, why is this costing extra? I get so defensive when they say things costs extra. 

So that's the update. Next week I expect we'll be asked to settle the land. After we sign off on the prelim design it will go to our property developer to ensure our design meets our covenant agreements. That's been an interesting experience too, I'll save it for a separate post. 

1 Mar 2017

Purchasing Land Off Property Developers

I've never purchased land before. I've never built a home before. We're still at the early stages, and so far it's been a ... manageable effort. I've flipped a few properties already but they've always been existing homes. They were also purchased based on different goals than what we have today. Previously our purchasing decisions was based on buying something that we see as a medium to long term investment and something that was cheap.

Purchasing land we definitely were more selective. Besides being the obvious - location and price. We found ourselves considering factors I never thought I'd care about such as, where the sun rises and sets, elevation to other properties, future infrastructure, public transport, even the shape and size of every side of the land.

We purchased our land from the developer or in other words "off the plan" meaning it's not ready for home construction. If you look at my previous post all you can see is piles of dirt. We were open to this option as we hadn't started looking at homes and wanted more time to save more money. I also think it's our cautious way of approaching this risk. We knew we need to make a big move in regards to property soon as we've been saying we would for the past 3 years. Every year as home prices increased, we would always look back and say to ourselves, 'We should've purchased that place we saw last year." Hence why our "location scope" trip last September resulted in the signing of contracts. When we went looking we had no preassumptions we would buy anything, but at the same time we knew we had to take a risk.

If you've every purchased an off the plan development what usually happens is after the cooling off period, and your conveyancer has thoroughly reviewed the contract and they can confidently say you're not at risk of getting a dud deal, you pay a percentage of the cost of the land. The rest doesn't need to be paid until settlement. In our case settlement will be when the land is registered with the council.

During Christmas when we went back to look at the land the road had been laid and grass was being watered at the time. So we assumed we'd get a call by January. It's March today and we're yet to an update on the land. I'm not too worried cause we're not ready to build and I'm happy to keep our money as long as possible. And from past experience developers usually start communicating really well closer to settlement, as they want the rest of their money real quick after they've done their part.

So that's the straight forward, no drama process of purchasing land off property developers work. However if in the case the land you're thinking of buying is already registered, your settlement will occur in only 4-6 weeks.

Here's an update image and if you follow me on Instagram you would have seen a similar post already.



Things I've learnt or tips I'd give others from our experience so far:
  • Ask all your questions, no question should be too hard or stupid for them. This is a big deal for you, they should understand that and not feel troubled to answer and explain things to you over and over and over again. 
  • Ask other people who have purchased land about their experience or questions you may have. I was emailing friends, calling our parents, finding forums and Facebook groups (they do exist) to get the information and advice I was looking for. I don't claim to know everything and I like to learn from other people's experiences.
  • Do your research. If you're serious about an area or any property purchase you investigate. I assume you would do thorough research into the area you're considering buying before contracts are signed. 
  • Ask for a better price. If you don't ask you won't know. Ask about any rebates, especially if you're a first home owner or maybe the development is giving one. 
  • Don't forget stamp duty. Every property you buy you pay stamp duty and depending on the state that can be up to 5% of the cost of the purchase. So if the property is $850K that's $42,500 just going to the government. Sucks doesn't it! People forget about this so when you see the asking price remember to add 5% to the figure to manage your expectaions. 

Have you built before? Got any more tips for this stage of the development? 

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