Open Houses & Permit Ready

This week has been pretty busy for us…

We put our house up for sale on Wednesday evening, and had two open houses this weekend.  It was pretty insane the number of people that toured the home – about 80 GROUPS of people came through.  And we had additional showings before and after the open houses on both Saturday and Sunday.  I guess timing is everything – thanks David Hogan (our agent) for pushing us to get it listed sooner rather than later.  Let’s hope all that traffic actually produces some families that actually want to buy our home!  We’re scheduled to review any offers on Wednesday.

Redfin 'dubbed' us a "Hot Home" - hopefully it will sell within the next 9 days!

Redfin has dubbed ours a “Hot Home” – hopefully they’re right and it will sell within the next 9 days!

Besides listing the home this week, we also heard back from the County that our permit was officially approved and ready to be picked up whenever we want to grab it!  Finally…all of the reviews were done and we can cross that off our list.

Permit Approval - Final

But we’re not quite ready yet – on Sunday we finished negotiating our contract with Matt from Ruttan Construction – our General Contractor.  It took a couple weeks, but the terms are mutually accepted now and we can sign them today.  Tomorrow we should be submitting all of the paperwork to the bank to be able to start the process of appraisal and getting the construction loan.

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Choosing Our Builder

We were still in awe about how much we learned about both Builder B and Builder D in our reference check process…definitely worth the time invested. And of course, based on that little exercise, we were now definitely leaning towards Builder B. One of the reasons that we weren’t initially “sold” on Builder B was because he really didn’t sell himself. You could tell that both he and his dad were genuine, and that they would build you a quality house, but they weren’t very outspoken about themselves and their work. So, although they didn’t brag about their work – their references did and that really filled in the missing piece of the puzzle for us.

After the references, we really sat down and discussed making the decision to use Builder B. We had an overwhelming reaction – of course we should use him…let’s do this. So we called Builder B and asked a few more questions (geez we have a lot). We hung up, discussed our thoughts on Builder B’s responses to our questions and called him back to ask one more question…if he wanted to be our builder! And he said “uh, yeah”! We were so happy that Builder B – Matt Ruttan from Ruttan Construction said yes and that he’ll be building our house! We really feel like he’s going to be a great builder for us, exactly the type of person that we want building our dream home.

Calling All References

 

We have now narrowed our search to two builders: Builder B and Builder D. We liked both of these companies because they’re small family-run father/son businesses in our area. Both of them have been established for 30+ years in our area, built beautiful homes, were in our price range, and we ‘clicked’ with them at our prior interviews. We met for the third time with Builder B yesterday and Builder D has been out of town for the past couple of weeks so we haven’t been able to set up another appointment with him yet. We figured that we’d take the next few days to call all of the references that the builders had given us. I ended up staying home from work today because our littlest one is home sick with a pretty rough cold. His independent play + nap time gave me the perfect amount of time to focus on calling references.

Builder B

I started out by calling Builder B’s references. He gave me a list of seven different people that their company recently built custom homes for (I called four of them), one real estate agent whom they do a lot of business with, and two subcontractors that work closely with the company. Here’s my quick notes on what the references said about Builder B.

Reference 1 (Mr. R): Mr. R met Builder B at one of the homes that Builder B previously had built that was currently up for sale in a neighboring city. Builder B and Mr. R got into a discussion about the house and how it was built – and he instantly knew that he wanted Builder B to build him and his wife their dream home. Builder B helped them find the right property, walked them through the permitting process and build their house. Mr. R said that they did an outstanding job at estimating and making sure that job was organized. He said that overall the budget was definitely estimated correctly – he had allowances for most of his items, the actual selected product pricing came in higher on some items and lower on others – but that the budget stayed balanced. He said that there were never any surprises; he was kept up to speed with what was happening with the project with weekly tours/inspections. Mr. R said that they were accommodating and very kind. It’s been a year since his house has been built and Mr. R was thrilled that they still knew who he was and that Builder B could easily answer questions about his house. Mr. R mentioned that the quality of the subconsultants hired was great – and that they kept a clean jobsite and that Builder B was onsite about 70% of the time.

Reference 2 (Ms. A): Builder B did an extensive remodel on Ms. A’s house, and she started off the conversation by saying that she couldn’t recommend anyone higher. She herself grew up in the construction industry with her dad being a contractor so she knew just what to look for when interviewing builders for her project. She said that Builder B was very responsive and it was clear that he cared immensely about the relationships that he built with his clients. Ms. A said that she instantly knew what her costs were – Builder B is completely transparent with the billing/invoicing and always gave options to choose less expensive finishes to save her money. She said that there were no surprises, that Builder B is delightful, nearly flawless and that they would chat frequently by phone if not in person. She said that he always took care of things and had a tight control/close supervision of his subs. She said that he builds things the right way, even if it took more time or was more expensive to do so. She also said that he was extremely realistic with the schedule (even though it meant not being able to have her house done by the time of her son’s graduation party). When discussing subconsultants, Ms. A mentioned that she was completely insulated from the subs – Builder B took care of all of them and not one came to her with issues about the project or working for Builder B. She said that he was firm but fair with the subs, was a very good communicator with them, and was extremely selective with who he’ll have be a subconsultant on his projects. Ms. A worked from home and loved the guys that came into work – said that she’d welcome them (and Builder B) back any time.

Reference 3 (Mr. D): Mr. D said that he would absolutely recommend Builder B to anyone looking to build a custom home. He said that he was genuine, has a good personality, was on-time, and excellent quality. Other words he used to describe Builder B was thorough, flexible, honest, a real pleasure, and a quality individual. He said that Builder B really made it feel like he’s working for you. When I asked about the subonsultants, Mr. D said that he used great subs – and wished that he had use all of the subs that Builder B normally uses. To save money, Mr. D ended up using an acquaintance to do the tiling work in his house. He said that the quality was so poor and that the tiling job really looks bad compared to the quality work that Builder B did. He said that you get what you pay for though, and that it really was a mistake to not use all of Builder B’s recommended subs. He also said that he would think that the subs Builder B uses would say that Builder B is a stickler on the details…good for the homeowner! Mr. D said that Builder B’s pricing was very accurate and that he made his subs stick to the quoted pricing. He also said that he ended up using a pretty bad architect and that Builder B had to fix some of the mistakes that the architect had in the plans. He didn’t go into a lot of detail on this, but I’m assuming that since it was worth brining up it probably meant that Builder B went above and beyond what was expected to make sure that the house was built properly.

Reference 4 (Mr. M): Mr. M is in the commercial contracting business and said that Builder B was recommended to him by a neighbor. After interviewing a few different people to build his home that he went with a gut feeling he had to choose Builder B. His home was recently completed in 2013 and said that both the quality of his house and the quality of Builder B was top notch. I asked him if there was anything that he wished he would have done differently and his answer: nothing. That’s pretty amazing right? He loves absolutely everything about his house?! That means that he had a great architect and a great builder. Mr. M said that everything went smoothly with the build. He said that Builder B was honest and upfront, didn’t nickel and dime him, and that Builder B does things the “right” way. Similar to Mr. D’s scenario, Builder B also beefed up the framing because the architect didn’t design it properly. I really like that – going above and beyond to make sure that the structure of the house is sound. Again like Mr. D, Mr. M used some of his own subs and wishes that he wouldn’t have – it saved him money but he also received a noticeable decrease in the quality of their work as compared to Builder B’s subs.

Reference 5 (Ms. J): Ms. J is the real estate agent that Builder B has been working with for many years now. She recommends a lot of her clients to use Builder B and follows their homes being built from the ground-up through the construction process. She also said that he’s going to be building a 4,000 square foot addition onto her current house in the near term and will be using Builder B for the construction. She said that they do amazing construction and that the homes she sells that were built by them typically sell for multiple offers – two of the homes she’s sold for them were record sales in the area of the homes (the highest cost per square foot when sold). She said that they have a distinct quality and craftsmanship in their houses. A few of the buzz words that I picked up on that Ms. J used to describe Builder B was: honest, trustworthy, goes above and beyond, and worry free. One of my favorites is that she said Builder B is super anal retentive about getting things done correctly and really cares about his projects. She said that he takes pride in what he does and that he has a high attention to detail. My other favorite thing she said was that both the dad and son of Builder B are good ol’ boys – doing things the right way. She said that they treat every home like it’s their own…and that the jobsites are clean! Ms. J said that he is very organized and that the subs LOVE working for him and think that he’s great. She said that he has the best subs in the industry, that they’re always paid on time, and that Builder B has high expectations of their subs. Ms. J also said that Builder B will keep you on budget and lets you know immediately how the budget changes based on your finish selections. One final thing she noted is that they have a good reputation with the County and the County’s permitting office and that the inspectors like them.

Reference 6 (Mr. A): After all of those great reviews from past clients, it was time to move on to do my due diligence and call the couple of subs that they gave me contact information for. Mr. A is actually not only a subconsultant, but also a past client of Builder B’s! He selected Builder B to build his house. He said that Builder B truly has his clients best interest, a high attention to detail, is honest, hard-working, and really values his business. It was apparent that he really enjoys working with Builder B and was extremely happy with the work that Builder B did in building his own house. He said that he is always paid on time (something that you need to watch out for) and most of the time he’s even paid early! Mr. A said that both the son and dad of Builder B are responsible for the decisions that they make and stand behind their word. He also said that they don’t tolerate a messy jobsite, make sure that people clean up, and that they’re extremely organized which makes working for them easy.

Reference 7 (Mr. J): Finally, the last one – Mr. J. Come to find out, Mr. J and Builder B have grown up together and have been family friends for quite a while. Based on that – I knew I wasn’t going to get a bad recommendation from him! This call was pretty quick, but he said that Builder B has great guys, he’s paid on time, their scheduling is always done properly, that he likes their other subs, and that Builder B is pretty anal about getting things done right.

 

All in all, a pretty stellar review from all 7 people interviewed. I’d say that you couldn’t have asked for more raving reviews from past clients, business colleagues, and current subconsultants. A true testament to the work that Builder B does.

 

Builder D

Builder D gave me a list of three past clients to whom I could call for references. Not quite the list that I received from Builder B, but I also didn’t ask for any others…find out why:

Reference 1 (Ms. T): I called Ms. T but she didn’t answer and her mailbox was full – no luck there.

Reference 2 (Mr. B): Builder D both designed and built Mr. B’s house about 8 years ago. He said that he’s known Builder D for a long time – they live near each other and he considers them friends. He said that Builder D was easy to work with, and that he had great ideas for the home – very creative. He said that Builder D tried to keep the project within budget, but it ended up costing Mr. B more…I had to ask more about that statement. Mr. B went on to say that Builder D tried to get them to choose more inexpensive finishes to stay within budget. Mr. B went along with that, but was ultimately unhappy with the cheaper decisions and ultimately paid again for the item that he wanted to get originally. He also said that the subconsultants would say that he’s pretty hard on them – always beating them up on pricing. And that he cycles through subs pretty frequently (isn’t that a red flag?). Mr. B said that he has issues with the sheet rock (cracking) within the first year that he moved in and he’s also had cracking in the concrete walkways around the house (likely due to poorly compacted soils). Builder D still hasn’t been back to fix the problems (although he’s been contacted many times). Mr. B said that in the end, it wasn’t the customer service that he expected from Builder D and that he was pretty disappointed. I always asked each person if they would use that builder again and Mr. B was the first person that actually said, “No”. He said that he would likely choose someone else. He caveated all that by trying to end on a positive note by saying that truly there are more “pluses” than “minuses” when it comes to Builder D, and that he does build a quality house. Um….ok.

Reference 3 (Mr. A): Similar to Mr. B, Builder D designed and built Mr. A’s home 5 years ago. He said that Builder D did a phenomenal job. He really couldn’t recommend Builder D any higher. He built Mr. B an 8,000 square foot craftsman style house and said that there’s a high level of detail in all of the finish work. He said that he’s easy to work with and that schedules are up to date and really lets you know when you need to make all of you selections so that you don’t affect the schedule’s critical path. He too said that Builder D pushes you to choose cheaper options for finishes to stay within budget. He said that Builder D has a high level of integrity, good subs, and detailed bills/invoices. I asked that since it’s been 5 years if there’s anything that’s had to be fixed or didn’t come out as expected and surprisingly he said that yes there was – there was cracking in the sheet rock (just like Mr. B), and that windows were missing caulk so wind would whistle through them, that the front door needed to have the wood work re-finished due to rain damage, and that the entire exterior of the house needed to be repainted this year because the first job was horrible and that the color was already fading from charcoal to heather gray. Mr. A mentioned that he lived right next door to the house while it was being constructed, which prompted me to ask if he saw anything during construction that wasn’t done correctly. He said that one time he had to point out to Builder D that some of the lumber was really bowed and in pretty bad shape – of course Builder D made sure not to use those ones then. He also said that Builder D would repeatedly say, “this doesn’t look right” a lot of the time. Mr. B said that was because Builder D was really picky about style/workmanship. I think it means that Builder D doesn’t have very educated/quality subs working for him so a lot of things need to be redone. Again I asked if Mr. B had to build a house again if he would choose Builder D and he said that he would!

 

I was absolutely shocked when I got off the phone with the two references from Builder D. I was practically begging people to tell me something bad about Builder B – any sort of dirt and they couldn’t. I talked to two references for Builder D and both of them told me what I consider to be bad things about Builder D. I was absolutely stunned to hear about all of the issues that both of them have had since their home was built. And isn’t it weird that none of the homes are ones that were recent – they were from 5 and 8 years ago? I think that must say a lot about the workmanship that he’s currently performing on the houses he’s building now (or has recently built). It was such a surprise to hear negative things from Builder D’s references – we really enjoyed meeting and interviewing him, and truly felt like he would have been a good fit for us. I guess that’s why people say that references are so important – some people are just good salespeople. I guess he still hasn’t learned that actions speak louder than words.

Builder Interviews Round 3 – Builder B

Today was a pretty fun, but quick day. As I mentioned previously, Builder B is a father/son general contracting company. We knew the son from mutual friends, but had never met his dad before. Today we did just that. The son invited us to his parent’s home to view their house, which they recently built three years ago, and to get introduced to not only his dad, but his mom as well. His dad owns the general contracting company, the son works there, and the mom does all of the accounting. Talk about keeping it in the family!

Their home was gorgeous! Definitely high quality and the attention to detail was extremely prevalent. It’s a northwest lodge style home, similar to the son’s house with natural wood finishes, slate tile, stone fireplace, wood flooring, and earth-toned decor. Although it’s not the style of home that we’ll be building, the finishes were beautiful and the craftsmanship really showed. It was easy to see the pride in the type of work that they do.

The entire family was than welcoming and they readily answered all of our questions. One of our main questions was about who was going to be working on our project – the son or the dad? Both had a variety of experiences – the dad started out as a carpenter and has been building one or two homes at a time for the past 30 years; the son has been building homes with his dad or for other builders for the past 10 years and has built a higher quantity of homes. Their response to our question was that they would be interchangeable on the project and that they would both be involved in building our home. It’s apparent that the son would be the main point of contact on our project and be the one managing it. The dad would be there for advice (if needed) and help if the son wasn’t able to be at our house for one reason or another.

We also talked a bit more about their typical contract to make sure that we understood the general idea. They work off of a true “cost plus” contract. Meaning that our invoices will be broken down into whatever was purchased for the home plus an additional markup for their overhead + profit. This is different than the time + materials contracts that we’re used to hearing about. Time is not a calculated into their type of contract.

I mentioned previously that we gave Builder B a set of our preliminary plans for him to review and give us a more accurate cost for our house. He said that based on the size of our house and our initial thoughts on how we’re going to finish the house, the cost increased from $115 (initial thought before seeing our plans) to $130 per square foot. That said, he did mention that the $130 per square foot is really a budget level opinion of cost and that it could be built for less (depending on the finishes we choose). That price is simply for the house costs, so taxes and overhead + profit are also in addition to the price. Another thing not included in the $130 per square foot is the cost for utilities and any major hard/landscaping. So really, when you factor everything in and the divide by the square footage of our house, the cost is truly $180 per square foot.

We had to cut our meeting a little short with a sick little one at home and babysitters calling. It was great to get to meet both of them though, tour their beautiful home and see the family dynamic.

Builder Interviews Round 1 – Builder E

Builder E

When we interviewed Builder C on the property about a month ago, we met one of our new neighbors.  They had a great experience with a builder and recommended us to talk with him.  This builder began his construction business as a carpenter – both a framer and a finish carpenter (he framed our neighbor’s house).  His business is built on framing & carpentry today and is just starting to get into the custom home construction business.  We met Builder E at Starbucks to discuss our house plans.  He was very interested in our project and asked a lot of questions.  He was very honest and told us all about his experience (or lack thereof) in building custom homes.  He’s done a handful of total remodels throughout the Puget Sound area, but our house would be the first that’d do from the ground up.

Contract & Cost

Builder E’s contract would be set up as time + materials. This basically means that we would pay for all of the materials and he would have a set amount that he charges to manage the project each month.  When he used his own crew to do the work, such as the framing and finish carpentry, he would bill them out as any other sub would.

Update

On March 25th, Builder E called and let us know that after reviewing our plans in more detail, he thinks the project would be too much to tackle for his first custom build.  We really appreciate him being honest with us, and we were having the same feeling as well.  He was really up front and professional about it – and even recommended us to another custom builder in the area.

Builder Interviews Round 1 – Builder D

Builder D

Today we met with Builder D.   Builder D was the only General Contractor that we met at The Seattle Home Show that we thought would be a good fit for us.  We met them at their second office in Issaquah, WA.  This builder is based out of Enumclaw and builds in cities throughout King County.  The company was started by the grandfather of the current owner, and now his son has followed in his own footsteps and works for the company as well – four generations of custom home builders!  The current owner “dad” has been working for the family business since 1964.  Before meeting with them in person I did a lot of research on the company and they do a wide variety of work.  From small simple cabins to the highest end luxury custom homes.  Their quality of work in all their projects is evident in the photos that we were shown (and the ones we found online).

The company has about 10 employees, ranging from the owner/manger “dad”, the scheduler/supervisor “son” and a handful of framers and carpenters.  They sub out the other subs, but the framing and finish work they do in house.  One thing that is very important to us is the finish work, both in the woodwork and the tile work.  It’s reassuring to know that Builder D has staff members that can do great finish work (at least for the carpentry).  Speaking of finish work – Builder D was extremely knowledgeable because he has built a lot homes similar in style to ours.  Which we really appreciate and we think that it’s good to have that experience – that way our’s isn’t the first one that they’ve built.

Schedule

Builder D is pretty flexible with schedule and how he manages it.  He can come up with a full blown MS Project Schedule for us – but he typically finds that it’s overkill and clients don’t use it nor understand it.  His style is a bit more simple and low key.  They meet weekly with the client and give us a weekly update on what work was performed in the past week and what the next week look ahead will be.  In addition, they’ll itemize everything that they might be waiting on us for, and anything that is critical path.  That way we’re informed with what’s in front of us and not worry so much about the big picture schedule.  That said, if we want the full schedule we can have it.   After reviewing our plans, we asked him how long he thought it would take to build our house – just off the top of his head.  To our surprise he said 12 to 15 months!  15 months seems like a VERY long time to build the house.  I think with that long of a scheduled build, I’d definitely want to at least get a general idea of what the overall schedule was.

Contract & Cost

Builder D has a different set up than others that we’ve talked with.  Builder D sets up the project originally as a cost + percentage to come up with the overall cost for the job.  Up front, we get to see every one of the bids that comes in the door that we’re going to use.  Everything is an open book.  Then we can negotiate and change items/subcontractors if we need to.  Then we’ll work together with the builder to come up with the total cost for the contract.  Based on that, we’ll then have a fixed bid contract.  That’s the amount that we’ll get from the bank and the builder will need to get the project done for that amount.  That said – if we don’t have all of our finishes figured out, we’ll have allowances for those items.  If we go over the allowance, we’ll need to cover it with cash.  If we end up saving on some allowances, we can allocate that money towards a different item in the house, or have a less expensive house.  Our goal is to have everything picked out prior to bidding so we’ll be able to know what our items/finishes are and get an accurate bid up front.  Hopefully that will limit the allowances we have for the house and we’ll have a really good idea of what our house will cost before even swinging the first hammer.   Just based on what we discussed with Builder D, he said that he would give a really rough estimate of $150 – $200 per square foot to build our house.  Of course, that’s a wide swing in price and if we move further in the interview process with him, we’ll need to get a better estimate.

Deposit

Builder D doesn’t charge a deposit if we wanted to work with him.  He believes that his policy is not to charge anyone for anything until we’ve actually done the work.  I really like that philosophy.  If we need a lot of his help prior to construction starting (for example, permitting) then we’d just pay him an hourly rate.

Builder Interviews Round 2 – Builder B

Today we met with Builder B as a follow-up to our first meeting.  We met Builder B at his home which he recently finished building in the fall.  It’s a very nice home and the floorplan reminded us a little of our layout.  It is a one story with a walkout basement.  The master was on the main with the other bedrooms were downstairs with an extra bonus room downstairs as well.  It was great to get to see the details of his work up close – we really got a true feeling for how he builds homes and how he would build ours.  That said, the style of the house was completely different than what we want ours to be – his was northwest craftsman and we want ours to feel more bright & white.

We spoke more about the pricing of the home to get some more details about what was and wasn’t included in the original price per square foot that he gave us.  He also told us that some of the utilities and major exterior items like a full driveway also wasn’t included in the price per square foot that he initially told us about ($115).  Builder B informed us that the $115 per square foot pricing does includes a 5% supervisory fee.  On top of that, he adds an additional 12% for overhead & profit and then tax on top of that (8.6% where our house will be built).  Tax is added afterwards because he will purchase all of the materials without tax using his reseller’s permit.  That way we’re not paying for tax twice, and that way we can use the lower tax rate of 8.6% instead of the 9.5% tax elsewhere in the Seattle area.  Washington State’s Department of Revenue has broken down all of the tax laws for custom building a house in Washington.  They give some great examples like:

Example of a Contractor's Estimate (including tax)

Example of a Contractor’s Estimate (including tax)

We discussed our house and some of the selections with Builder B at his house and over the next week or so he’s going to spend some time reviewing the plans in more detail and giving us a better idea of the cost to build our house (not just a cost per square foot estimate).  As it stands now, with some really rough numbers for utilities and exterior hardscaping, plus the $115 per square foot + 12% overhead & profit + tax the total cost per square foot is really $165 per square foot.  We’ll see what it is truly when he looks at our plans in more detail.  We’re looking forward to getting a really accurate bid before we sign a contract with any builder.