Windows and Rough-in

Our younger daughter has been visiting us this week.  She is attending grad school in another state.  This is the first chance we have had to show her the progress on the construction.

We offered her and our older daughter brunch at the Imperial Hotel (including Bloody Marys) to go out to the building site this morning.  My wife was not feeling well so the three of us went.  We arrived at the hotel around 10:30; they were quite pleased with the Bloody Mary “salad bar”, and the brunch was a success.

We walked around town a bit.  It was hot, but otherwise a pleasant Sunday.  We got iced coffees at Play It Again Sam and headed to the lot.

I was pleased to see all of the windows were installed, and surprised that much of the rough-in work had been done for the electrical, plumbing and heating systems.  The windows make the house exterior look closer to being finished.

The showers and tub had been installed as part of the rough-in work.

The south-facing window wall in the great room looks very impressive with the windows installed.

We did note a couple of issues.  The shower in the master bath is supposed to be tiled, but they had installed a one-piece fiberglass unit.  I’ll bring that up with the builder tomorrow.

After spending a while wandering through the house, we went back into town.  I had promised my daughter we could check out the used book store.  We also went into the organic food store to get a snack and drinks.

We ended up spending most of the day, and did not get back until late afternoon.  All in all it was a great day.

Second loan draw

The builder’s office had sent me the second draw request before our meeting on June 21.  After the meeting and inspecting the completed frame and roof, we were ready to sign.  I sent the signed form to the lender on Monday morning.  Tuesday, I got an E-mail from the builder asking when he would get the payment, as he needed to pay the framing crew and order materials.  Before I had a chance to contact the lender, I got an E-mail from them that the payment had been wired to the builder.  Problem solved!

Flashback — The Lender, part 1

We knew from the start we would need a construction loan.  Our cash and investments would get the project started, but we did not have enough equity in our current house to cover the rest.  We also knew we would probably need to pay off the lot loan.

The builders all thought this would not be a problem.  Our concern was that we were still in the aftermath of the real estate crash that started in late 2007.  Credit was still tight, and lenders were still being extremely cautious.  Construction loans are inherently more risky than mortgages on complete houses.

After our decision on the builder in 2010, we were aiming for an April 2011 start date.  We started the loan application process in early February.

We talked to one lender that the builder recommended.  The loan officer was friendly but somewhat pessimistic, and we did not apply to them.  We picked up one important fact; as for a mortgage, the lender requires an appraisal of what the house will be worth, based on the house plans.  This is inherently more speculative than appraising a completed house.  The maximum loan amount would be 80% of the appraised value.

The builder also told us of another lender that would give a construction-to-permanent loan.  This was attractive as it would save us closing costs for the final mortgage.  We started working on the application in February.  The paperwork requirements were daunting:  they included statements from every investment we had (whether or not it would be used for the house), tax returns, income statements, etc.

One item we needed was the signed construction contract.  We got the builder’s contract in late February.  There were a few clauses that I found confusing, so I had it reviewed by our settlement attorney.  He was not familiar with construction contracts, and had more questions.  The builder was OK with us modifying the contract.  It took a couple of weeks, but by mid-March we had the signed contract.  We then delivered what seemed like a small mountain of paper to the lender with the application.

At that point progress slowed down dramatically.  The loan officer wasn’t great about giving us updates unless we called.  There were committee meetings that were scheduled and then rescheduled.  Finally, they came back with what one bank was willing to lend:  significantly less than what we needed.  They had not even ordered the appraisal.

The loan officer said not to worry, they had other banks that might do better.   Then, nothing for a few weeks.  We figured it was time to look at other options.

Framing Complete!

The builder asked to meet us at the lot to review the completed framing and discuss the electrical plan.  We agreed on 1:30 this afternoon. Yesterday, his office E-mailed the request for the second loan draw.

We knew we wanted to rework the electrical plan from what was on the blueprints.  My wife got some large tracing paper, traced and then marked up the plan.  We moved, added and removed lights and outlets.  We also did not like the way the light switches were laid out.  She then transferred the markup to another copy of the plans.

We met the builder as scheduled, on what happened to be one of the hottest days so far this year.  There was a bit of a breeze, but standing out in the sun was pretty much unbearable.  Fortunately the framed-up house looked terrific.  The front and rear porch roofs and the storage shed were completed, and the roof was completely sheathed.

The builder gave us a couple of sets of stucco colors to choose from .  We also picked colors for the window trim, soffit and fascia.  We reviewed the electrical plan, and discussed the choice of light fixtures and ceiling fans.

Flashback — The Builder, part 2

In January 2010, we went to dinner with a group of friends, and met the sister of one friend, who it turned out lives in Kent County.  She highly recommended the builder that had rebuilt her house.  We met with him and were immediately impressed with his overall approach and his knowledge of specific items that we were interested in.  For every point or question that we raised, he had a ready response.  We felt comfortable working with him from the start.

He showed us a house under construction and another that was completed.  One other strong point was that his schedule for completing construction is about four months, compared to about nine for the other builder.  This will save us quite a lot of interest on the construction loan.

He submitted his first bid shortly after our first meeting.  It was still above our budget, but it was nicely structured and detailed, with a basic cost figure plus all of the additional costs for our add-ons and other options he thought we might want to consider.  This made it easy to figure out what we change to get the cost down.  In mid-summer 2010 we made our decision to go with this builder.

He had more ideas for saving us money.  He recommended a supplier for flooring that would help to reduce costs, and we chose our tile and carpets.  He also recommended some good roofing products.  By early 2011 we had converged on a specification and a cost that we could afford.