Tag Archives: Building a House

Lessons Learned: What to do while in escrow

Even though we had a grip-load of help and worked with such great people throughout the whole process, I really wish I had known just exactly what I was in for.  We made some mistakes and were mislead by a few things and I thought it would be nice to jot it all down for anyone looking for a bit of guidance for building a house and for my own future reference if we do this all over again someday.

Lets start with escrow! Sweet sweet escrow where you have about 30 days to make about 40 thousand phone calls.  When you buy a house, unless you pay 100% cash, it is a requirement (at least in California) that all of the basic necessities are there.  It has to have water, power, a method of disposing of sewage, it has to have somewhat of a clean title in order qualify for a loan, usually a pest inspection is required, etc…you know somewhat of what you are getting yourself into.  However, when you buy a lot, your on your own.  No one is looking over your shoulder or making sure everything checks out because there isn’t a bank involved.

Some of this advice/information may not apply to every lot and I might be missing some things that we didn’t encounter.  Although to me it seems unlikely that there was an issue we didn’t encounter…

So you fall in love with a lot, you put an offer in on it and it is accepted!  Holy cow, your in escrow! This was the weirdest feeling.  Sean and I put in a pretty low offer on our lot and really expected them to come back at us with something much closer to the asking price.  We put the offer in late afternoon one day and early the next morning our realtor called and said it was accepted!   Immediate thought: Should we have offered lower? My advice there is NO.  You shoudln’t.  You should offer what you are willing to pay and what you would be comfortable with and hope that the other party is equally reasonable.  Anyhow, provided you have an accepted offer and you get put into escrow, here is what you should do (BEFORE you get your heart set and plan your whole life in your imaginary future house):

1) Do your research! Hardcore googling is involved here.  Go on the city website and search for documents relating to your lot.  Look for any related recorded documents involving your lot, redevelopment plans, or the original development.  Look for any agenda items that relate to your tract or to your lot in particular.  In our case, our lot was at one point part of a redevelopment plan which includes a market and several future single family residences.

2) Determine the use (ie Single Family, multi family, Mixed Use, etc) and make sure it ties in with what your intentions were for the lot.  Our lot was actually a mixed use lot and originally they told us we would have to have a commercial aspect to our house.  We got the city to agree to us using the lot for only residential purposes and then also had them put that in writing.  The purpose of getting them to put it in writing, is that someday, if the house were to burn down, the city could require the house to be re-built to the original zoning restrictions and a strictly residential dwelling would be non-conforming.  Since an insurance company will only pay for you to re-build like for like, you’d end up in a pickle.  I cannot stress enough how important it is for you to get anything that someone agrees (that isn’t documented) elsewhere to in writing.

3) Utilities: Make sure you completely understand what utilities are available to you and get it in writing.  In escrow, we went down to fact find at the city and the city reviewed their records and determined we did have a sewer lateral for our house.  In actuality though, after a camera test was done to look at the lines, the lateral was running underneath our neighbor’s house and couldn’t be used.  If we had asked the city for confirmation of the lateral in escrow, they probably would have done the camera test then, and we would have at least known what we were getting ourselves into…which turns out to be ripping up a whole street to install new sewer lines at our expense.

4) Make sure you very carefully review your preliminary title report (provided to you in escrow) and don’t take anything for granted.  Our lot, for a lot that was tracted off over 100 years ago, had a SUPER clean title.  However, we did discover on the preliminary report that the previous owner had put an easement on it for access to utilities in the future (he still owns surrounding land).  We were not comfortable with leaving the easement as is and asked him to remove it, which he did.  The take away here is to ask for what you want.  People may say no, but then at least you tried.  The purpose of receiving a preliminary report is to work out any kinks your not comfortable with.

5) Permit Fees…the take home here is to make sure you know what the current permit fee rates are in the city where you are building.  These can change dramatically from year to year.  We made the mistake of assuming based on past rates and got burned.  They almost doubled! Us: “Why did the permit fees go up so much?” The City: “Because no one is building and we need to re-coup for the lack of permits being pulled.” OY!

6) Make sure you fully understand the setbacks & height requirements and that you take into consider the average natural grade when calculating your height if the city where you are building calculates the height of your house that way.  Basically you take the grade at the front of the house and the grade at the back of the house and average them and add that to the height of your actual structure.

7) Have your realtor pull comps for what your completed house on your lot will be worth once its built so that you can have the satisfaction and peace of mind that you are making a sound investment.

8) Find a designer or architect and have them put together the initial drawings while you are still in escrow.  I know this sounds crazy, but the soils engineer will need them, the loan will require them, and so will basically everyone else.  If you are serious about moving forward quickly and you don’t see any reason why you wouldn’t close, go ahead and get started on the plans.

9) If you are really serious about the lot and all of the previous items have checked out and you are still comfortable moving forward, do not bother having a “preliminary” soils report done…just go for the full soils report.   You will save yourself $1000+ by doing so.  You are going to have to have the full soils report done anyways and its really only about 2x the cost of a preliminary soils report.  When you do seek out soils engineering services, ask them to provide you with a quote for what you will need to take the project all the way through to completion.

Next Up: Close of Escrow though Plan Check

Disclaimer: I am by no means a professional and I highly recommend consulting with a professional and asking a lot of questions of each potential vendor or person you come into contact with and if something doesn’t make sense, ask for more clarification.  And trust your gut.

Timing is everything.

lunapic_136605601142475_1

If i have learned one thing from my 20s, and the 20s associated rat race, it is that timing is EVERYTHING.  That and that God is great, beer (and wine) is good, and people are crazy!  This makes it seem as though everything you need to learn in your 20s can be learned by listening to country music…

Anyhow, back to timing… Timing has saved our butts so so many times.  Protected us from ourselves. Kept us from making huge mistakes.  Caused us to make some mistakes that turned out to not be mistakes at all.  If we had gotten everything that we thought we wanted when we wanted it, I don’t even know where we’d be right now.  We probably would have lost a house or worse.  My husband would probably still be trapped in a sales job he hated. I might’ve not gotten the experience I needed in a bigger city and would have had a really hard time getting my first break in my small town.  I had this revelation yesterday that this opportunity to build a house is way more than I ever even hoped for.  Six months ago I wanted to so desperately to buy a 2 bedroom house built in 1889 that was basically falling down for 75k more than they were asking for it!  Thank God timing had my  back on that one.

The take home here is that I am so thankful that things worked out the way they did and that the timing all came together for us to build this house.  My mom and Brian and Sean and I were just talking about how the market has already changed so much in just 6 months that we didn’t think we’d have been able to do this if we were starting to look for lots today. Weird right?

Did I mention my mom & step-dad (to be referred to as Brian from  here on out) started building?!?  They did.  I am going to post about their lot and progress ASAP.

Falling in love all over again.

Were getting so close guys!  So close.  I am hopeful that by the end of the month there will have been some work done on the lot.  At the very least, hopefully the forest of weeds will be gone.  We close on our loan in a couple days & the city is working on our final plan check revisions. Eeeeeeeee!!!!

Now that the end of the beginning or the beginning of the end is near, I am getting excited all over again about the things that made us fall in love with our little lot in the first place:

The opportunity to have a nice back deck with a little view of the downtown area where we can entertain and watch the sun go down with a glass of wine in the evenings!

outdoor entertaining

The proximity to the farmers market one block away and the cute market basket possibilities that go along with said proximity:)

bike basketHaving a safe place for our kitties to roam a little outside and bask in the sunlight of the big windows we have planned inside.  I could spend an hour just daydreaming about our kitties sitting on the ledge of the dutch doors staring outside….its gonna be so presh!

catPretty darn excited to have a couple cozy rooms to offer to our friends and family who come to visit in place of the couch and/or motorhome accommodations we currently have to offer.  Pretty sure said friends/family are with me on this one!

guest bedroom

The biggest and best thing about the lot is how close it is to my family.  We are basically down the street from my mom and stepdad (who are also building a house!!!) and even closer to my dad’s house.  My best friend is about a mile away…walk to met in the middle for coffee distance perfection.  For those of you who aren’t friends and family and are reading this, two years ago my husband and I moved from a couple hours away back to my hometown.  We love it here and we’ve always known we wanted to end up in this little pocket of the world.  It’s so magical, I cant even explain it. Sadly, we are now a couple hours away from the other half of the people that we love.  This grates on my heart but this is also where the guestrooms come in.

The Ones That Got Away – Part 1

Remember when I said that there was a whole bunch of crazy involved in our house search?  Well, this house stands out above all the rest.  It was basically uninhabitable and we were going to have to gut the whole thing but it had some funny features worth sharing:

photo 1Feature A: Collage Carpet

photo 2Feature B: Wallpaper in the Shower!  How does that even work?

photo 3Feature C: Carpet in the Kitchen. Mmmm, yummy.

photo 4Feature D: Bathroom sink in the bedroom

I love looking through all my old house hunting pictures.  It totally validates all of the stress & waiting of building.

Elevations: Something Tangible!

Elevations JPEG - Name taken off

I was so stoked when I got to see what I was dreaming about and explaining to everyone in some tangible form.  Sure, they are black and white line drawings, but they are the closest thing to the real deal right now and they give me hope and something a bit more concrete to picture in my mind when I am at work dreaming about what our Christmas lights will look like on the front of the house or what it will feel like to stand on the back deck and bbq.

Click on the image for a bigger version:)