Financing Your New Home
I have asked our mortgage and construction loan officer, Blakley Huntley, to provide a letter of explanation about financing a new home for our customers and I am proud to introduce you to her here.
If you are considering having a new home designed and built by the team at Chandler Design-Build you will want to know what to expect from the process. Every designer and builder does it a little differently. Here's the process we have evolved over the past 19 years.The Design Process|The Construction Process
The design process we use at Chandler Design-Build starts with phone and E-mail communication. We generally assign prospective clients a fair amount of homework before the first meeting. Our goal is to be efficient but un-hurried during the design process. We generally ask that you bring a good survey of your property, a map showing the driving directions to the site, a few digital photos of the site and of key furnishings and art work you will need to have fit in your new home. We also ask that you and your partner go through your collection of images from magazines and design books with different colored post-it notes representing the different personalities that will live in the home so we can understand your taste and try to fit the home to your family. We will ask you to develop lists of the types of spaces and activities you will want the home to accommodate. (Encourage your children to pick a post-it note color and express their thoughts and feelings about the design process if appropriate, best to get them on board and enthusiastic from the start)
We don't have the capability or desire to draw or build for everyone who calls us. So the first interview is mutual, we want to see if the kind of house you want is one we will be particularly good at designing and building. We also want to be sure that we all communicate well with each other and that we will be able to meet your desires and expectations. We are part of a community of builders and designers and if we feel that your project is better suited to one of our colleagues we will be very up front in telling you and will even give you their phone number.
We bill for our designs on a strange hybrid hourly / fixed price basis. The arraignment is unusual, in fact I don't know of anyone else who does it this way, but we've been using this system for many years and it works for us. During the preliminary design process we keep track of our time at $80/hour and try to work as efficiently as possible to arrive at a preliminary design that expresses in a simple fashion the essence of what our design for you will look like with a preliminary estimate that gives you an accurate idea of how much it will cost. We want you to have an escape hatch, to be able to say "no I don't like the direction this is going" or "gee I didn't realize how expensive my house would be" and pay for the work done to date and walk away from the relationship if your are in any way uncomfortable with it. Our goal is to earn your trust and confidence and convert you from an hourly "consulting client" to a fixed price "working drawings client" and eventually to an "enthusiastically satisfied customer."
Once we have a design you love that works with your budget we will present you with a fixed price contract, based on 4% of the construction budget. This contract is inclusive of all the time previously spent developing the preliminary drawings and budget as well as of the time preparing the specifications and preliminary selection worksheet and any structural or mechanical engineering required to solicit construction bids and building permits. Once you sign this contract and initial the preliminary drawings and budget you will pay a 50% down payment and we will immediately begin to draw up the working drawings. The balance is due when the completed documents are delivered. Generally working drawings and selections take about one or two months to prepare. Preliminary drawings can take anywhere from two weeks to six months.
Our process is designed to minimize stress by keeping you from feeling out of control. These are momentous decisions you will be wrestling with. For most people this is the biggest investment you will make in your life. The process can be very stressful on your relationship as well. We want you to feel that you can stop the process at specific points and step back if you need to. While we believe in the design-build process, we want you to know that it is okay for you to take our plans to another builder to "check our price" if that will make you feel more comfortable going forward. In general we feel that transparent and clean communication should be everybody's goal. All of us at Chandler Design-Build want you to walk away from every interaction with us feeling glad that you chose us to be your designer and builder.
When we submit a construction estimate we will break it down into approximately 25 line items that help you to understand what the costs are of the parts of your house. Some of these line items will have upgrade options or cost savings suggestions to help you manage your budget priorities. We recently did four estimates side by side for the same floor plan with four different energy and finish option packages that ranged from $140 to $175 per square foot. This is for the exact same floor plan. When we submit your contract documents we will also submit a preliminary construction schedule. This schedule will help you to know what to expect to be happening on a week to week basis and will also let you know what decisions you will be expected to make on a month by month basis. Generally we will try to alert you to decision deadlines as they occur but if the deadline on the written schedule for an item that is specified in the contract passes without you alerting us to a change we will order and install that item as specified in the contract. We say the selection worksheet is preliminary because we want you to feel free to take your time making changes to the selections. But once construction starts we feel a commitment to keep your project on time and on budget. We will not encourage you to make changes to the plans. Some contractors thrive on profitable change orders; we thrive on staying on schedule and on budget.
Once the construction starts rolling we are running through money at a considerable clip. Our comfortable pace of construction is to build three, $350,000 homes, per year, this means that on any given month we are burning through approximately $87,500 in cash flow. If you are the person responsible for writing the checks it is understandable that you might get a little stressed out. We encourage you to allow the bank inspector to review our draw requests and deposit the money directly into our account, but even if you aren't faced with the monthly problem of how to write out that large number onto the little space on your check you still will feel more comfortable if you feel that you have a clear accounting for what the check is paying for. Our construction process draw documentation is second to none for transparency and clarity. The first page of your monthly draw request will show you all 25 line items from your original contract with the amount of value installed to date and the balance left until completion on every line item. The second page will show you a history of all change orders made to date and all payments made to date and a summary of the allowance variations over the course of the job to date with a projected final cost. Pages three and four give details on the allowance items such as well and light fixtures which are charged at cost plus 15%. These breakdowns show costs incurred to date, projected cost to completion, and overages or savings for each allowance category as well as cumulative allowance variance over the course of the job.
We take a small deposit on signing the construction contract which is credited to the final payment which is due before you move into the house, we invoice monthly based on percentage of completion at the time of the invoice. We come back for a 30 day punch-list and touch-up and also for a 12 month service call. While our warrantee is the standard 12 months we often return to fix minor problems long after the warrantee period is over and will absolutely want you to allow us to repair any water leaks or plumbing leaks that may occur. Our reputation is based on our enthusiastically satisfied customers. The way we see it, taking the time to keep our past customers happy is far better advertising than any ad in the Saturday paper.