It’s Closing Time…

Alright, cue the Semisonic anthem because we close today on our construction loan!

After providing some last minute documentation to the bank at the beginning of last week, we got the news that everything was approved to move forward mid week, but because of the need for time to prepare all the documents as well as federal regulations requiring that we acknowledge the final paperwork 3 business days before the actual closing, we couldn’t close until this week.

Of course, most of the time a real estate closing happens and then the new owners get the keys and take possession of the property.  In this case, we are basically just getting possession of a line of credit.  No keys for us yet.

So, today will actually be a bit anticlimactic but it’s one of the last hurdles before we can finally see something happen on our lot other than weeds growing.  We are expecting groundbreaking to occur in the next 2 weeks and then I’ll try to share frequent pictures.

Almost there! (to starting anyway)

We are finally getting very close to starting!

Yes, this blog has seemed dormant for a while and there has been no physical progress on the house, just lots of behind the scenes work.

After months and months of design and all the decisions about layout and exterior, the last 6 weeks or so has been dependent on paperwork and decisions that are out of our hands.

First, we had to get HOA approval for our design.  Our neighborhood has pretty strong design requirements to maintain the feel and property values.  Not just dictating that you can’t paint the house bright pink, but down to the point of defining how much stone is needed on each exterior wall, square footage requirements, the pitch of the roof and the list goes on.  It sounds pretty constrictive, but in reality, we probably would have wanted nearly all the things they dictated even if they weren’t required.  So, we had no trouble meeting those requirements with the exception of the roof over our screened porch which had to be more shallow than “required” so that it wouldn’t end up blocking upstairs windows.  In the end, we obtained our approval with no concerns from the review committee.

Concurrently with HOA review, our builder started the permitting process.   There are apparently multiple different types of permits– zoning, building, septic– and each has their own process and requirements.  I’m just glad they are handling all that for us.  The last we have heard is that the zoning and building permits have been issued and there is just some additional work to approve our septic plan.  Septic is a completely new beast for me that deserves its own post some day.

The biggest question mark recently has been the financing.  We had received preliminary approval for the amount we wanted to borrow for the project months ago, but now we had to do the formal application process where the bank’s fine tooth combs were put to good use.  Seriously, I think I could have delivered my entire filing cabinet and forwarded them every financial email I’ve ever received and they still would have found something else they wanted.

As soon as we knew that the design didn’t need to be altered in any way, we entered a contract with our builder that lays out as many details as we already know with allowances for all the things we don’t know yet.  I actually went through and increased our allowances in nearly every category knowing that we will want nicer things at many steps and because we’d rather plan higher and get pleasantly surprised rather than the other way around.  (Even with that, I’ve already realized that we will definitely go over our cabinet allowance, possibly by $5-10K!).  With the increased allowances as well as the general scope of the project, we ended up with a contract price that is about 25% higher than the budget we had thrown out to the builder in our initial meetings.  I was pretty sure that type of thing would happen… I just hope there aren’t a lot of additional increases coming.

So, with a contract in hand as well as final plans, we finalized our loan application and have been waiting for that for the past 3 weeks.  We were pretty sure our finances would be okay, but the concern was the appraisal.  A bank doesn’t really care how much you spent to build a house, just what it ends up being worth.  Well, actually they’ll loan based on the lower of the appraisal or the cost, but in our case the cost had potential to be significantly higher than the appraisal.  If that happened, then not only would we be responsible for our 20% down payment toward the project, but everything above and beyond the appraisal.  That’s why you have to be careful to not overbuild for the neighborhood.  Like any real estate transaction, the value of a new build is based on surrounding similar houses.  So, if every house in the neighborhood is about the size of the one you are planning to build and sell around $400K, but you decide to put travertine floors everywhere, a Tesla solar roof and all the bathroom fixtures are made of gold, it doesn’t matter that you spent $1 million to build that house, the bank is gonna say it’s only worth $400K, maybe a bit more, and you’re gonna be left with a ton of out of pocket cost.

That’s why the appraisal is so important.  Luckily, our appraisal which came in yesterday was very good.  Not great, but very good.  Once we account for landscaping and the purchase of the land itself, the overall project cost is still significantly above what the appraisal says, but it does give us the option of financing more so that we can save some of the out of pocket costs for other things like window treatments, furniture, and pool.  Of course, that does mean the mortgage payment will end up noticeably higher.  Also, we hope the township assessor comes up with a significantly lower opinion of value when determining our property taxes.

Well, that’s it for now.  I’m hoping we’ll be able to announce a groundbreaking date very soon and I will try to share some of our design journey with you.

I Spoke Too Soon

I hadn’t even finalized yesterday’s post— about how we had amazingly managed to not pick the most expensive cabinet designs– when we had another shopping trip that had a more expected outcome.

We decided to brave the frigid temperatures to check out Chelsea Plank Flooring.  The production facility and factory store are only about 10 minutes away from us and our builder highly recommended we consider that product.

So we made our way into their showroom– probably about 40 feet by 40 feet– and talked to one of the nice salesmen.  I wanted to hear more about prefinished floors versus site-finished floors among other inquiries and we both wanted to see the different style/color options.  And they have a pretty good selection.  The floor of the showroom was finished with at least a dozen, maybe more like 20, different options and then another 3 dozen or so samples were “installed” in about 2×4 foot sections on the walls all around.

We couldn’t have been there more than 5 minutes– just talking at the desk– when Stephanie pointed to one of the samples on the back wall to say she liked it.  To which the salesman replied, “you have excellent taste…that’s the most expensive product we sell.”

No joke.

I don’t think we had even gotten our bearings in there.  I know I hadn’t even seen 50% of the options, but my beautiful wife was able to find the most expensive one– distressed walnut– just like that.

To her credit, I like it too.  It does look very nice and even after trying to find something else that we both like as much or more, we were unsuccessful.  Here is a pic of the sample they had in the showroom.

There’s a lot more to investigate before we would be making a final decision.  Apparently walnut is a relatively soft wood so it would be more prone to damage.  The runner-up option we found was hickory and would be much tougher so more research is necessary.  Plus, I’m still not completely sold on the prefinished flooring.

More to come.

We Have Cheap Taste

Okay, that title’s a bit misleading.

What I should have said is that we don’t always have the most expensive taste… just most of the time.

A few years back, I was out car shopping and Stephanie was thinking about what her next car might be.  She casually pointed to an SUV parked at the dealership saying that she liked the look.  It was a Porsche Cayenne!  I’m pretty sure she didn’t even know that Porsche made an SUV, but that’s just how it goes.

I’m not any different, though.  When I was in high school, my family went to pick out a new dog. The breeder had quite a few puppies at the time (cocker spaniels).  It didn’t take long playing with them for me to fall in love with this little brown puppy with quite a lot of personality.  Decision was made.  As we were getting ready to check out– for lack of a better term– she mentioned that some of the puppies had chocolate coloring in their lineage that would come out if they were bred and the chocolate coloring carried a premium.  Sure enough, I looked down at Nugget and she had a chocolate nose, not black.  We had no intention of breeding, but that nose cost me an extra $100.

Anyway, back to the house.  We went out to look at kitchen design yesterday and tried to educate ourselves a bit about the different options.

And there are a lot of options, some of which I may tackle in future posts.  But, for now, I’ll focus on the topic at hand: how we actually didn’t have the most expensive taste possible when it comes to cabinets.

First off, I think we’ll just try to keep ourselves from even considering custom cabinets because I’m sure we would want them if we really investigated it.  Plus, from looking at the semi-custom cabinets that are available and knowing that we don’t have an irregularly shaped kitchen, we will definitely be able to get some really nice stuff without going custom.

The other conclusion that we came to was that we don’t want inset cabinets.  This was something I didn’t even know existed until the designer showed it to us.  In my mind, all cabinets are the like ones I’ve grown up with, with the door mounted on the front of the cabinet frame.  But it is also possible to have doors that are inset so that they are completely flush with the cabinet frame.  I can see how it would be appealing, but at least in the display we looked at, it wasn’t our thing.  And they would have been an added expense that we don’t have to worry about now… hallelujah!

(Sorry, I totally neglected my duty as a blogger to take a picture to show what we are talking about, and when I looked online, none of the pictures I can find are allowed to be reused, so just google “inset cabinets” to see some examples.)  #Fail

Again, inset cabinets probably can look really awesome.  Our impression might have been swayed by the fact that the display also happened to have lots of added details in the edges and moldings that we definitely don’t want, but we’re happy concluding that we don’t need or want inset cabinets.

We Started Appliance Shopping

Our builder is hoping to work on a first estimate during the month of January, so they have asked us to start working on selections, which is very exciting, but equally stressful.

We need to pick– or let someone else pick– everything about our house.  That’s the double-edged sword of building a custom home.  We have ultimate freedom to create whatever we want– within constraints of the budget, of course– but have hundreds of decisions to make.

I’m sure I’ll spend some time here discussing many of the bigger decisions for us that will keep me up late at night researching, but the prospect of all the little decisions– like trim shape or cabinet pulls– has me stressed enough.

All of these decisions will not only determine the look, feel, comfort and durability of our home, but they will significantly impact the bottom line.

We are getting good guidance from our builder and they have narrowed some of the massive options out there so we aren’t, for example, trying to research every single hardwood floor provider in the area.  As a result we’ve been pointed in the direction of trusted, local resources for specific things.

One of those recommendations is Big Georges Home Appliance Mart here in Ann Arbor.  It happens to be right down the street from my daughter’s swimming lessons, so we decided to stop by today after her class.

Appliances are definitely one of those items that could majorly swing a budget.  Big George’s has ranges listed on their website over $18,000 and I know there are ranges out there that easily exceed that price.  (No, we aren’t going to be spending that type of money.)  A nice kitchen appliance package could easily be $6000 and as soon as you start talking about a cooktop with separate wall ovens, vent hoods, built-in microwaves and a refrigerator and dishwasher with some of the latest bells and whistles, the price starts to soar.

I was hoping today’s visit would allow 3 main things:

  • Determine a general style/feel.  I know that Stephanie doesn’t care for pieces that have too much of an industrial appearance.  I do actually kind of like the look, but won’t be sad that we don’t select a pricey Wolf cooktop that really exemplifies that style.  I think we saw things that we both like that are industrial enough, but don’t look like Wolfgang Puck should be using them.
  • Figure out which pieces we want and sizes.  One of the other big things we need to figure out to make the estimate as helpful and accurate as possible is the kitchen cabinets and counters.  So, we need to meet with a kitchen designer to figure out what cabinets we need and how much counter space will be present  Knowing, for example, that we probably will go with a 36 inch cooktop with separate wall oven(s) vs an integrated range will affect those plans.
  • Try to start narrowing brands.  If we knew we needed/wanted to have a  specific brand, that could certainly have budget implications, but we really didn’t have enough time to get to that level of decision making today.  Lunch time snuck up on us quickly and our daughter got fussy.  That was probably just as well, though, because we won’t be actually purchasing the appliances for 8 or 9 months probably, so who knows what new features or designs could come out by then

What I wasn’t hoping for was to create new questions that need answering.

And that’s when the salesman mentioned induction heating.  I had always assumed that we would have gas burners since that’s what I’ve used for nearly my entire life (our rental house has electric burners, but otherwise, it’s always been gas).  But hearing about how induction heating is more efficient than gas, easier to clean up since it is just one smooth surface, faster to boil water (we love our pasta!), but still very responsive like gas has me very intrigued.

As one might expect, an induction cooktop is more expensive than the other options.  In fact, it appears to be double the price of a gas cooktop if not more in some cases.  Beyond that, I am concerned about durability.  I don’t want to always worry that I’m gonna put a pot down too hard or slide it across the surface and leave a scratch.

So, now I’ve got something else to research.  I’ll let you know what we decide.

Please share any thoughts you have that could help us out regarding induction vs gas or anything else about appliance selection.