As I am about to move into our newly built dream home, someone asked me if I would do it again. My first reaction was “never!” but then I thought about how much I had learnt and how much easier it would be the second time round, having learnt some valuable lessons.
Understand the details of your building bond
Money is everything when you are building; without money everything grinds to a halt. Dealing with the bank was the most stressful part of the build because building bonds are not like ordinary mortgage bonds – they have a whole set of criteria which are not always logical. Building bonds are really geared for full turn-key building projects by a single large building company and do not cater for a builder with sub-contractors. If you want to work with a smaller builder this is what you need to know:
You only get paid once the bricks are in the ground: The bank pays out usually in six stages and only for completed works. This means that you or your builder will have to carry the costs of each stage of the build and be reimbursed by the bank. Builders will do this but add around 10% to 15% to the costs of building to fund this cash-flow. You also need ready cash when it comes to buying windows, tiles and bathroom fittings as the suppliers want to be paid on delivery while the bank will only pay once it is installed. My suggestion is that you have a large slush fund that you use to pay upfront for certain items – especially if they give a cash discount. For example, I walked into a bathroom shop and saw exactly the bath I wanted; it turned out to be the last one in stock and selling at a 30% discount. You want to have ready money to take advantages of those specials.
Your bank pays the builder: In our case the bank refunded us but that is fairly unusual and in most cases the bank wants to pay the builder directly. This makes it difficult if you have forked out for certain finishings and you, not the builder, need to be reimbursed.
You put your money in first: If the cost of the build is R3 million and the bank is only prepared to lend you R2.5 million, you cannot spread this out over the period of the build – you will have to put in the first R500 000. That means that the bank will only start to pay out once you have spent R500 000 on the building.
Find a project manager with good interpersonal skills
It took us six months to find the right project manager. The one we chose in the end impressed us with his references and the amount of detail in his quote (four pages of an excel spreadsheet in a 9 font). After working with him for nine months I realise that his strong interpersonal skills have been as important as his attention to detail. You are going through what will be one of the most stressful experiences of your life and the person who is holding your dreams in his/her hands has to exude a sense of control and calm. You will encounter problems and there will be unforeseen expenses so you need a project manager who can take these in his or her stride while reassuring you. Our project manager’s ability to bring a sense of calm also turned out to be a very valuable skill when dealing with difficult neighbours, as emotions run high during a build.
Work with an engineer from the beginning
Our biggest mistake was not having an engineer as part of the project from day one – especially as we built on an extreme slope. Our architect delivered a magnificent plan – our living space still takes my breath away – but that plan cost us far more than expected in engineering. We knew engineering and waterproofing costs where always going to be a big factor due to the location, but engineers like to cover their backs so they have a tendency to double up on all specifications. While it is reassuring that we should survive a 10 Richter scale earthquake, we have sunk a lot of money into the ground and have not much to show for it – well, apart from a breathtaking view.
Inevitably, the project went over budget – there are many finishes that will have to be done in phase three, four or five, and some ideas I had to give up on altogether. But as I stand in my home and imagine living here with my family, I am filled with an overwhelming sense of joy. This will truly be our home. Every detail has been designed to meet our needs. It is a home which works around our family – and that is priceless.