Finalizing the House Plans

Wayne checking in:
Met with Rob & Dewey (builders) and liked the plan option 2. Increased 60 SF and they indicated this at 1/2 price or $ 85 per SF. They sure are doing a lot of work on plans and site on lot. The differences in the addendum are so small it does not matter whether we pass that along or not. We will sign off the plans and addendum (with you) before we leave town.

Rob indicated that there is a lot of dirt piled on our lot from the dig next door. They will be hauling dirt from the site today and tomorrow and Rob wants to walk the site with us before we leave. Let me know what might work for you on getting together. Maybe later this afternoon or tomorrow although not sure how you are about working on Sunday, or Monday but that might be a little tight with us meeting with Rob.

Sunday morning might work well as I just heard this from Sue. We do have a nice room here with couch, chair and of course all the usual stuff, so rather than a restaurant if you would not mind we could meet here or your office. Your office also good and you do have all the stuff there. Your call. Let me know.
-Wayne

Clarifying Options & Upgrades

During the various discussions with the builders and their agent, Wayne & Susan were very detailed in what they wanted included in the new house... many items of which would definitely be upgrades from a typical house. They intended for the builder to incorporate these upgrades in their bid.

When the builder gave us the bid of $170 per square foot, Wayne & Susan made some assumptions about what was included and what might be upgrades. Being the totally organized ones they are, they sent me an itemized list of what they believed would be included (within the bid price). We forwarded this on to the builder's agent, who met with them to make verification. Here is the list (with builder notes):

Extra dedicated circuit 20 AMP for CPU in Office room (Upgrade)
Ceiling Fan Outlets in Entry, Great Room, Office & all bedrooms (Included)
Bath Fans & Utility Fan 80 cfm .4 sone panasonic (partial upgrade)
Appliance allowance of $2,500 (o.k.)
R49 Ceiling Insulation (Partial upgrade)
Attic & Crawl lights and outlets (2 included)
Comfort height toilets-Kohler 2-piece systems (Partial upgrade)
Pre-wire for surround sound (o.k. $2000 maximum allowance)
Sink in utility room (o.k.)
master bath tile counters, tile shower to top nclosure and soak tub surround (o.k.)
Clear guard on glass shower doors (upgrade)
Lighting allowance of $1500 (o.k.)
Sinks-kitchen cast iron -porcelain, other sink above counter assumed good plus quality (o.k.)
Open or uncovered pation approx 200sf (1 covered patio included... other extra)
5/8 inch OSP on roof (upgrade)

This is a good example for NOT making ANY assumptions. Everything must be clearly outlined, so there are no unpleasant surprises.

Although their initial reaction was disappointment in the extra costs, the Geralds' feel they are still happy with how the process is moving along. Wayne's comment was: "The differences in the addendum are so small it does not matter whether we pass that along or not. They are doing so much on planning, house on site location, and etc. We feel we are getting a great builder and service as we enter the building process. ".

More Planning

I received the following e-mail from Wayne on Sunday. I was out of town for a few days, so Wayne & Susan met with the builders to go over some planning and design items:

"Met with the Cannon's and got a lot done in my opinion. Window sizes, and a few layout items. We also met with John at Swim World that was recommended by Dewey. Appears they will coordinate the pool towards end of construction and most likely pour the concrete patios and pool apron at same time. That way all can match with same perimeter stamping and etc. Pool is a fiberglass 14 x 28 located behind master bedroom and a portion to the north.

The plans are now ready to go to the cat drawer. Rob said he might dig the site hole next week as they are doing the one adjacent. I doubt very much if we will have any challenges or questions about the final drawing. Looks like most if not all have been carefully covered and appear very acceptable".

- Wayne

Opening Escrow

We have a fully executed PSA now, and I opened escrow this morning. To "open escrow" I took the PSA and the Earnest Money Deposit to the Title company of choice. In this case we chose Transnation Title, officially known as Land America Transnation Title Company.

Generally, the buyer chooses the title company but Wayne & Susan are from out-of-town and did not have a preference for a local title company. In the past, if a buyer asked me for a recommendation, I have had a preference toward First American Title (formerly known as Land Title). Unfortunately, they are currently on my naughty list and I am not making them my title company of choice at this time. They did some "downsizing" and laid off my favorite escrow officer... so they could keep on some of the less tenured Spanish speaking employees.

I want to make it perfectly clear... I am absolutely NOT racist in any way, but I do have a problem when totally competent, dedicated employees are replaced just because they don't speak Spanish. It's not right, in my opinion.

Anyway... since we did not have a title company of choice, we agreed to use Transnation Title which Lisa suggested because that is where this particular builder close a lot of their transactions. This should help things keep running smoothly. The monies from the E.M. deposit will be put into a trust account. This will be held, in this case, until after the final design approval by the buyers.

Once the buyers approve of the design and the builders are given the go ahead to proceed with the construction process, the E.M. will be realeased to the builders to apply for permits, excavate the lot and purchase building materials for the project.

This release of the E.M. is not typical of most transactions. In a typical re-sale transaction the E.M. is held in trust at the title company until closing and applied toward to purchase price. But, since this is a custom construction, the Earnest Money will be released to the builders as security for their expense in the project.

Now, we wait for the drawings to be done so they can be reviewed and approved by the buyer. This may take a couple of weeks so there probably won't be much activity on the blog until then.

Carol@TopPropertiesWenatchee.com

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Distributing Documents

Since my last entry one week ago today, we've been passing paperwork around for review and approval by ALL parties. Because of the Independence Day holiday week-end, Lisa was not able to review the details of the offer with the builders until Wednesday. After reviewing with both Rob & Dewey and getting signatures, the signed documents (with a few minor changes and clarifications) were e-mailed back to me on Thursday evening. Since the Geralds live out of town, I forward the documents (via e-mail) to them for review. There were no changes of particular consequence and Wayne & Susan should be sending the documents back to me with their initials next to the changes.

After I have their initials on the changes, which will constitute a "fully executed Purchase & Sale Agreement", escrow will be opened. I'll write about that next time.

That's enough for now. Will let you know when documents are signed and we go to escrow.

Have a great week-end!
Carol

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A Meeting of the Minds

We're making serious progress with our nego- tiations for building a custom home for Wayne & Susan Gerald. We had another meeting with the prospective builders and their agent this morning.

Shown here are: Wayne Gerald, Dewey Cannon (builder) Susan Gerald, Lisa Day with her cat Izzy (Cannon's real estate agent), and Rob Cannon (builder). Rob is Dewey's son and did a great job of researching and presenting information on the specific items Wayne discussed at the last meeting. As a professional home inspector, Wayne is very knowledgeable and has some very specific ideas about some (non-standard) things he wants in their new home. The builders have been very receptive to these changes... as long as the buyers are willing to pay for the additional cost of materials and labor, of course!

Two of Wayne & Susan's primary issues are to make the home extremely energy efficient... and to keep good quality air circulating through the house at all times (even when the windows are closed). We tend to get complacent about our power useage in the Wenatchee area because our power rates are so much lower than the rest of the country. Although electric power is relatively inexpensive in this area (now), the Geralds feel an obligation to build an energy efficient home. It's socially responsible and (eventually) economically beneficial.

Anyway, we had an excellent meeting, going over the details with the ultimate goal to put together an agreement everyone will be happy with. After the meeting, Wayne & Susan came back to my office and wrote up a Purchase & Sale Agreement. We have submitted it to the Cannon's real estate agent, Lisa, and hope to have all signatures within a few days. The holiday week-end may delay things a bit.

As a result of the meeting, we agreed the purchase price would be based on $170 per square foot. This includes the lot and an excellent quality home package. There will certainly be some changes and upgrades but $170 is the base price. At this time, it appears the square footage will be about 2,250 so we are starting with an estimated price of $382,500.

The Geralds submitted a non-refundable $1500 deposit for the builders to have the architectural draft prepared for their final approval. This will probably take two to three weeks.

Although the builders did not request it until the drawings are approved, the Geralds have put up another $60,000 (slightly over 15% of the base price) to put in trust with the escrow company (Transnation Title). They did this to show the builder how serious they are about proceeding with this project. Once the architectural design is reviewed and approved by the buyers we can proceed with the project. At that time the Earnest Money deposit will become non-refundable. Upgrades and changes will be paid at time of ordering the materials.

Stay tuned for the next installment...

Carol

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