Building a Home without a Budget

[marko]

Keep it in perspective: She could've said she wanted a baby!!

[Culture]

Quote:

Originally Posted by Meadbh I note that you refused to sign the contract. That suggests that you and DW have not been on the same page from the beginning. If DW signed the contract, is she paying the bills with her own money? Is she going to defer her retirement or go back to work to address these cost overruns?

Actually, I agree to work an extra year to pay for it. I retired about a month ago. That is part of the problem, as the extra year was not enough because the cost keeps going up, up and up. I feel like I quit about six month before I should have.

[Culture]

Quote:

Originally Posted by marko Keep it in perspective: She could've said she wanted a baby!!

That would be better, as I would like to have the second coming of Jesus Chris as a child! That is the only way it would happen on either side :-).

[foxfirev5]

Too late now to complain. Many contracts run over budget. However, there is nothing to replace planning. Each of our last couple homes where planned and redone before we broke ground. On the bright side our family business has made the bulk of our profits on change orders and on the fly adjustments.

Going back in time my mother and father built their first house for under $3k in 1950. My DM had to furnish a detailed list of materials to the bank which included everthing down to the individual nails. When the bank was still reluctant, her employer, a local stock broker stepped in and advised the bank to grant the loan. It was the last loan they ever had. How times have changed.

I might add that that my Grandfather built virtually all that house and one for his other daughter after he turned 65. Something I will aspire to at ER early next year.

[Meadbh]

Quote:

Originally Posted by Culture Actually, I agree to work an extra year to pay for it. I retired about a month ago. That is part of the problem, as the extra year was not enough because the cost keeps going up, up and up. I feel like I quit about six month before I should have.

Probably not the best move, in retrospect. Could you unretire until the McMansion is complete and paid for?

[REWahoo]

Quote:

Originally Posted by Culture Actually, I refused to sign the contract due to the budget deficiencies. The contract is between my wife and the builder :-).

So that gave her the legal right to approve whatever changes/upgrades the builder talked her into. I think I see the source of your problem...

[Sarah in SC]

Wingfoot, while I acted as GC on my job, I had a custom builder who was also our landlord while we were building actually act as GC for a 10% fee. He helped me get subs and when they didn't perform, he chased them for me. I spent many a quality hour going over lumber bills in his office, asking about every board. I think I got my money's worth in the end. We did a lot of the finish work ourselves: flooring, hanging doors, inside trim, and all the cabinetry. We also had to do the finish plumbing and call for inspections because the plumbers were thieving bastards.
Oh and we did all of the electrical, under a permit pulled by a friend. Shhh.....
I did like the percentage deal, as I wasn't comfortable setting it up for him to build it.

[Free To Canoe]

What an education reading this thread. I've often thought of having a home built out here in the country instead of living in the wonky one that we bought. Now I have an idea that having a home built would be a big time stressor.

[Midpack]

Quote:

Originally Posted by Free To Canoe What an education reading this thread. I've often thought of having a home built out here in the country instead of living in the wonky one that we bought. Now I have an idea that having a home built would be a big time stressor.

It can be a stressful process, depends on the builder. But it's essentially the only way to get exactly what you want and most people nail down the budget unlike the OP. We had our stressful moments over 7 months and did not get along with our builder unfortunately, but the one house we had built was still far and away our favorite house of the four we've owned. Unfortunately I was promoted/transferred in less than 3 years...

[Bamaman]

Quote:

Originally Posted by ERD50 All things considered, being within 143% to 200% of original cost isn't bad at all! Celebrate that it wasn't worse! Kind of reminds me of my bathroom remodels, cost wasn't the issue, but the amount of my own labor and trials and tribulations and a lot of messy, plain terrible work. Half way through, you just want to torch the place. But a few luxurious showers later, it's all forgotten(*), and you just enjoy the new bathroom. Time heals, (or at least softens the pain of) most wounds. (*) Not forgotten enough to ever, ever talk myself into another bathroom remodel though! -ERD50

We built a lake house on a cost plus 10% basis. We were paying cash, and handled all material orders, bill paying, etc.

We had 3 carpenters on the job, and we were paying them top pay. The only outside workers were drywall, plumbers and a roofer.

Our days were spent picking up building supplies, organizing the job site and cleaning up after they left for the day. By doing all the running around, we saved substantially over a carpenter having to do it.

You wouldn't believe how little we spent on the house. I recently bought my sister's half share in the property--for 5 times what the house cost to build. Of course, lake front property is deadly expensive now.

If you're considering building a very substantial house, my best suggestion is to buy an existing property. You can find a perfectly acceptable house that suits your needs--without all the hard feelings, hassles and potential lawsuits.

And if you have to build it, start by having a contract with the builder written by a good real estate attorney. Contractors should be paid in stages with time frame rewards built into the contract.

When we downsized, we bought a new low maintenance single story house with a daylight basement. We have everything we need on one floor, and an apartment downstairs in case we ever need live in help.

[Mulligan]

I feel your pain, Culture and I had no wife. And don't feel bad about not having a set price for building it either. I had one and it was kept. But there was still a few corners cut though to get there. And why the hell didn't they tell me a 2 car garage couldn't fit 2 cars in it? My "two car garage" can't fit 2 Escorts in it. I did finally blow a gasket when the cheap bastard thought a new house with a garage shouldn't have an automatic garage door opener. I told him this wasn't the 1950s, so he did cave in on that before closing.


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[papadad111]

Similar thing happened to my bro in law and sis in law.

They remodeled their home, set a budget but did not program manage the build. Left it to contractor /builder who wound up "spending" about 40 percent more than their initial budget.

They had to use a 401k loan to finance the overrun too. And worse, they didn't get all their dream features fulfilled. No good records of what materials cost, what the contractor markup was etc etc. Big lesson learned for them.

Don't let a fox guard the hen house.

Hope in the end she gets what she wants and lives long to enjoy it. That's all u can do now. No amount of complaining will fix the situation so best to move on and not get your blood pressure up. That's what we told BIL and SIL !

With the 401k loan now paid back they ONLY have to worry that the appraisal came back 100k below what they spent all-in for the house !!! Lucky they had the base house mostly paid off before remodeling began otherwise they would be hard pressed to find a lender that would loan to them given the appraisals. They did get a 15 year mortgage. In their mid 40s that does make sense.

[rayinpenn]

You're not going to live forever... Do you really want to spend precious time fretting over new house construction overruns?did you really not consider contingencies?and upgrades...

Get over it move in and just relax... 'Times is a wasting'

I would love to start building today...but I guess can't leave my September HS junior son can I? Can I? Come on please?


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[travelover]

Bummer. This sounds like a relationship problem. You really can't address the cost problem because you do not have your wife as an ally. If this makes her happy, then it's cheaper to keep her.

[Culture]

Quote:

Originally Posted by Midpack It can be a stressful process, depends on the builder. But it's essentially the only way to get exactly what you want and most people nail down the budget unlike the OP.

We had the budget nailed down (so I thought), and we have received everything explicitly included in the contract. The problem was in the details. No contract defines everything, and at some point you have to assume that the parties are going to behave "reasonably." I think where my contractor was unreasonable was in not telling us up front about cost he knew would be incurred later in order to get us to build the house. I suspect this is the norm in the industry.

The upgrades are solely on my wife.

[NW-Bound]

Quote:

Originally Posted by Culture ... Yes I am bitching, and I should be happy that I can afford a very nice, very beautiful new house in a very nice neighborhood. However, at this point I such negative associations with the new house I do not want to move into it. My wife and I are unable to even talk about the new house anymore as it starts an unpleasant argument every time. If I could get my money out of it, I would sell it... Marriage involves many compromises, some more painful than others. This one is as painful as all of the previous ones combined together.

Aye, aye, aye... Yes, building a home is very stressful, even when the couple does not have such major disagreements.

But the house is built, and whatever happened happened. I think you need to take a trip elsewhere together, and come back calmer. You still have the existing home to sell, right?

PS. The 43% additional cost did make the home nicer, right? So, if the contractor gouged you, it was not 43% but something less. Let's look at that as a consolation.

PPS. We have been married 35 years, and have had some rocky times like most couples. Then, afterwards think about it and realize it was not all that important.

[haha]

Quote:

Originally Posted by Culture Actually, I refused to sign the contract due to the budget deficiencies. The contract is between my wife and the builder :-). However, it is fair to say I consented.

It is also fair to say (ie. accurate) that you are on the hook for whatever she decides, whether you signed the contract or not. A married couple is an economic unit, her debts are your debts. You could always hock that ermine coat.

Lordy, Lordy, so much to learn!

Ha

[haha]

Quote:

Originally Posted by NW-Bound PPS. We have been married 35 years, and have had some rocky times like most couples. Then, afterwards think about it and realize it was not all that important.

And even if this rationalization fails, there is still the knowledge that someone in this situation has no remedies that will not damage him big time. Sunk costs and hard to measure contingencies play a big part in these decisions.

It can be compared to having a foot caught in a bear trap, late afternoon, on a cold, snowy day. Any attractive, low cost solutions come to mind?

Ha

[Midpack]

Quote:

Originally Posted by Culture We had the budget nailed down (so I thought), and we have received everything explicitly included in the contract. The problem was in the details. No contract defines everything, and at some point you have to assume that the parties are going to behave "reasonably." I think where my contractor was unreasonable was in not telling us up front about cost he knew would be incurred later in order to get us to build the house. I suspect this is the norm in the industry. The upgrades are solely on my wife.

I guess I just got extraordinarily lucky getting exactly the house we spec'd for exactly what we agreed to pay, not a penny more. It took a month or two longer than expected, and we didn't see eye to eye with our builder by any means as they tried to cut corners a few times, but evidently our simple contract defined everything sufficiently...

[Culture]

Quote:

Originally Posted by haha It can be compared to having a foot caught in a bear trap, late afternoon, on a cold, snowy day. Any attractive, low cost solutions come to mind?

Carefully step down on the spring and release the jaws, then drive to the hospital in my heated car or call 911 on my cell phone? Isn't that one of the advantages of opposable thumbs and intelligence ?

Wait, you said low cost and hospitals are anything but !