The devil is in the details

So, we got our first bid from a builder over the weekend.  It was a turnkey estimate, but it came in way above what we were hoping for.  And I mean, WAY above.  So far above that I don't think the house will be worth that once it's done.  Needless to say, that was very discouraging.

If there is one thing I can recommend to a prospective owner-builder, it's determination.  Especially when  you think you have an idea of what is required or if you have some help/consultation from people who haven't built a house in a while, new regulations and requirements can really catch you off guard.  Plus, the costs of building may have gone up significantly if your "help" built their house more than 10 years ago. 

Some hidden costs are things like permits.  I'm pretty sure that, if you dig a hole to take a crap in you need a permit for it.  You need the building permit, yes, but that doesn't cover everything.  You need separate permits for plumbing, electrical(which will usually require you to submit a wiring print showing switches, circuits, etc), and so on.  Also, you have to calculate cost of labor vs your time to complete.  If you are paid by the hour this is a huge consideration because if you are taking time off of work, unpaid, to work on your house, you may be paying more than just paying a professional to do it.

Another thing to watch out for, some banks will not give you equity on the parts of the house you build yourself.  Check with your bank for details on that, but an owner-builder that we know had this happen to them.  The upside is that their taxes were lower because the house was assessed for a lower value, but who wants their house to be devalued just because they did work themselves.

The lesson from all of this is to ask before you plan.  Had I asked some of these questions previous to starting the project my expectations would have been a lot better and I would have been prepared.  Don't get me wrong, I'm not advocating a turnkey solution if for no other reason than there seems to be some collusion between the state, the banks, and the builders on construction.  I find it difficult to believe that a builder has a greater interest in a well built finished product than a homeowner.  I realize that banks have been burned on these projects in the past, but in business you win some and you lose some.  The Vegas-style idea of "house never loses", or in this case, "bank never loses" is garbage.

You learn something new every day

Today the state Department of Health came out to inspect the site and prepare the permits.  We learned that, as of 2007, the state of Michigan no longer permits drywells for new construction if there is room on the property for a drain field.  If you need a drywell because you don't have room for a drain field, you have to get a variance for it.  So, if you are reading this blog and you are looking to build a new house in Michigan, keep that in mind if you were thinking of putting in a drywell.  If you have the space you don't get an option.

Silly me. I thought the idea of living in the country was so you had more freedom to do what you want.  It appears the kind of restrictions you get in the city are migrating to the country as well.  I wish the government would stop trying to protect me from myself and concentrate on protecting me from other people.

Where are we now?

As I mentioned, the idea for this blog came to me after we started the project.  Had we started this whole thing in earnest sooner, we would be a lot further down the road than we are.  I thought I knew exactly what I wanted for a house... well, I did know but then I realized the money wasn't there to do what I really wanted, so I had to change my plans.

If I could give anyone advice, it would be to start showing your plan to people who know about how houses are structurally put together.  Maybe you already know that, but feedback from people is important, because they think of things you didn't think of.  Also, the sooner you show it to people, the sooner you get feedback.  You may think you don't want or need feedback, but as long as you are able to filter through the good and bad feedback, you'll end up with information you might not have had before.  For instance, some advice I got was to put the master bedroom and the kitchen on the same side of the house as the garage.  The thinking was, if you come in from the garage, those are the two rooms you are most likely going to drop things off in.  While strong advice, it was coming from someone who doesn't have kids.  That changed our thinking, so while the kitchen is near where we come in from the garage, the kids rooms are there rather than the master.

In any case, once we discovered that our plan wasn't going to be affordable to build, we went into a complete state of discombobulation.  I spent hours on end looking at different layouts and trying to manipulate them into something that would work with our setup.  I am lucky enough to have a resource who knows about how houses are built.  While it was frustrating to be shut down on a lot of my ideas, we just came to a point where all the ideas fit with what we can realistically do with the budget we have.

Another thing that was unexpected is the inability to do things concurrently.  There are some things that can be done.  For instance, looking for a loan, builder, subcontractors, etc, we can do concurrently.  However, there is an order in which some things need to be done, which can make things last longer if you don't follow that order.

So, while we had hoped to break ground this week, we're just at the point of deciding on a floor plan.  This week we are taking the floor plan to a few local suppliers(Menards, Home Depot, and Lowes) to have it estimated for materials.  Also, this week the health department is coming out to inspect the soil and placement of the septic and well.  Don't underestimate the cost of fees, inspections, and so on.  They need to be done in order to get your permits and while their individual cost is relatively small, in aggregate it will cost probably around $2000 just for inspections, permits, and so on.

Also, this week we are going to be selecting a bank for our loan.  This has been another unexpected difficulty.  In order for a bank to give you a loan, you must have a licensed builder of some kind to guarantee that the work will be done to code and that the project will be completed.  This seriously limits the amount of work you can do yourself, so if you don't need the bank, you are in a much better situation.  The regulations vary by bank.  For instance, the bank where we have the rest of our accounts(albeit not for long because of their failure to work with us) is Fifth-Third bank and they would not allow us to do any of the work.  I was astonished when they told me that and they are going to lose us as customers because of it.  Long story short, I spent about 4 hours on the phone with banks this last week and every single national or large bank I went to wanted a builder to do the majority of the work.  That was simply not acceptable to us.  In this process I have found that it's the local banks that do things the same way they did years ago, so it is more than likely going to be a local bank that we get our loan from.

Up to this point it has been a long, frustrating process.  I hope that as we go forward things will get smoother or this is going to be one hectic summer.

What a ride

I have wanted to build my own house my whole life.  Many ladies dream of their weddings from the time they are little girls.  I dreamed of building my own house for as long as I can remember.

I'm not like a lot of you out there.  I don't desire to live in the city, or the suburbs, or really around very many people at all.  Don't get me wrong, it's not that I'm anti-social... I just want my backyard to be private.

Also, I'm the kind of guy who likes to build instead of buy.  There's something innate to me that seems to keep me from liking the things that are just a tiny bit off of where I want them.  I understand the business reasons for buying... I understand why people do it.  I just have a problem overlooking something that is not just right.  I realize that it will still happen if I build my own, but if something is going to be wrong, I want it to be my fault instead of someone elses.

As the tag line says, I'm just an average guy.  While I grew up with a little knowledge on how to do plumbing, electrical, and so on, I am by no means a professional or even all that good at it.  One of the things amateurs need to learn when trying to do the work of tradesmen is, their work is not easy.  It will take you some time to figure out what to do in a lot of situations, which means you will sit on the floor with a huge mess around you at some point in your project and wonder why on earth you thought you could do that.

The idea to put this in blog form is, I am learning a TON as I go along.  Even though I have lots of help from people who have built their own houses before, they did so more than 20 years ago and, well, it's a different world since then.  From the length of time it takes to pull a building permit to what you need for a bank and the order you need it in, lets just say there are a lot of surprises and setbacks that, if you aren't prepared for, will stretch the time you need.

Basically what I'm trying to say is, building your own home isn't going to save you much overall.  You will save money, that's for sure as long as you don't have to redo things many times, but you will trade your time for that money.  If your job is hourly and you work a lot, I suggest paying professionals to get it done as fast as possible.  The longer you wait the more money you spend on a property you aren't living in.

I am in the fortunate situation of living in a home that is paid for.  It allows me to be a bit more deliberate in making decisions and it gives me a little more time to do things.

That said, neither I, nor my family want to live here anymore so the pressure is still on.  Hopefully the pressure of work and the house doesn't prevent me from posting here regularly in the hopes it may help someone else have a smoother ride.

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