Posted on | May 14, 2009 | No Comments
You can view our listing with Wayne Cochrane, our Exit Optimum realtor, right here.
It’s with a heavy heart that I post this, but we’ve decided to put our lot up for sale. This isn’t what we wanted to do. But, the options weren’t really working in our favour and it seems like the best choice at this time. Part of me wants to hang on to it, and if we’d put more into the payments, I think that would likely be what I would do. But, we were really just making interest payments against the line of credit plus a little bit of principle, so it’s not really building any equity for us right now.
If it doesn’t sell, then we’ll likely hang on to it. Land is never a bad investment, but I hate having debt hanging over my head, and as a small business owner, I’d rather have less debt and more flexibility in case something goes wrong. Thankfully, business is flat out great, so that doesn’t appear to be an issue, but I’m fiscally conservative.
We have no intention of selling for a penny less than we paid. I’d love to have made back some of our other costs as well, but I don’t think that will happen, we’ll have to write it off as sunk cost.
So, in the end what did this little experiment cost?
- $1,800 on the land for 12 months of payments
- $1,300 for the plans our architect drew (basically the kill fee, it would have been much more had we gone all the way)
- $1,500 for a topographical survey
- $170 for an engineer to review the lot for services
- $1,100 for the first year of betterment fees
- $580 for property tax
- $35 to Three Brooks homeowners association dues
So, we’ve paid $6485 for this little experiment. Ouch. I guess this is still far cheaper than if everything went pear shaped after starting to build.
We already have a couple interested in the lot who are coming back from vacation soon. Here’s hoping they’re interested.
Posted on | April 5, 2009 | 12 Comments
We bought our land at 60 Three Brooks Drive almost a year ago now. In that time, we’ve been through everything from designing a ‘dream’ house, to downsizing this ideal, to pricing this out, to looking at kit houses. At long last, we found a house that we felt we might be able to afford from Lindal Cedar Homes. It had the feeling we were looking for, with passive solar features and the space we need for a family of five.
We spoke with the bank last week, and got a call back on Friday. It’s not pretty.
Some background: currently, we pay about $1,400 a month for a mortgage (including property taxes) on our current house. Our oil budget for heating costs us $250-300/month. We were hoping to basically break even between the new mortgage and the savings on heating costs. We’re also stuck in a relationship with Scotiabank, the mafia of Canadian banks. We can break our current mortgage and get another with them, but we can’t go elsewhere without paying a substantial penalty.
So, here’s our two options:
- $1,952/month + property taxes plus supplementary heating costs. Before-heating costs would likely be close to $2,200 or more. This is based on us getting approval for the mortgage now, moving ahead with the new house and putting ours up for sale as we get closer to the completion date of the new house. We’d then have the ‘privilege’ of putting the proceeds of sale of our old house down on the mortgage. This would lower the principal by whatever we had available, but would not affect our monthly costs.
- Sell our house now, arrange the new mortgage using the proceeds of sale as a (substantial) down payment, book the build of the new house, find an apartment for our family for the 4-6 months the build would take, and then move in. We figured that if we had $60,000 to put down, this would give us a pre-tax total of $1,679/month. The total with taxes would be about $1,930.
Obviously neither of these options is really going to work for us. Add to this that with option 2 we’d also be paying rent for at least four months, and have to put most of our stuff in storage. Given that we have a large dog and three small kids and my business to run, this would not be the easiest of options.
We knew that the house itself was going to cost more than where we currently are. However, we were not prepared to pay $500+ more per month for it. Although we truly believe in passive solar as a heating framework, we know that we’ll need something to back it up. Friend of ours who just built a house with a heatpump are currently being surprised by their $600-800 electric bills (bi-monthly, I think). This was our first choice as a secondary heat source. I can only imagine if we went with the $2,200 option and then had winter heat costs of $400/month.
We’ve talked this over exhaustively and I’m pretty sure we’re at the end of the line. I know that if we really wanted to do this, we could pursue option 2. However, the whole wheat Mini Wheat side of me says that this is a foolish idea.
I think we’re going to stay here. Much has changed since we decided to buy the lot. We have new neighbours who are both awesome and our age. We’ve made some changes to our current house that make it much more livable. All of our landscaping is done. High oil heating costs (at least for the moment) have subsided.
We can make some more changes that will reduce our environmental footprint here and make our house more enjoyable to live in. We could make radical changes to the interior of our house if we really wanted to, and still come out ahead on costs.
Watch for an upcoming post on the sale of our lot and what we’ve learned/spent throughout this process.
Posted on | March 24, 2009 | 3 Comments
I met with Cam from A Cut Above today. They’re the local Lindal Cedar Homes dealer, based out of the old Ron’s Army Navy building in Burnside.
Cam and his business partner met me out at our lot last week. He agrees that it’s the perfect lot for a modern, environmentally designed house.
And today, he delivered. A quote that is well within what we think we can afford. Obviously, we haven’t met with our bank yet, so this may still be a pipe dream, but it seems like it should be possible. Cam worked with Joel Turkel of Turkel Designs and Lindal to look for areas to cut cost to bring the house in line with where we want to be. They changed things like siding (not a huge concern), windows from cedar to colour-keyed vinyl windows (still good quality), got rid of the cedar ceiling liner (I wanted to do that anyway) and a doable, if tight budget for heating, bathroom appliances and cabinetry. We’re bargainers so I think we can make this work.
All told, A Cut Above beat our price by $6,000.
Now, I just need to meet with the bank and see if this is even possible. The house is just what we wanted:
- energy efficient, passive solar design
- built on an engineered slab
- funky and different
- architecturally designed
- tons of windows (41!) and light
- open concept living space with kitchen
- still has a fireplace, but we’d go propane just for atmosphere. We love our current propane fireplace.
Posted on | March 22, 2009 | 7 Comments
So, here we are. We’ve exhausted the custom architect-designed route. Still waiting for that second quote, but I’ll give you the range of the first one:
$500-600,000. Yeah, it blew my mind too. Especially since we had given our max budget as $300,000. The quote was under $500k with HST, plus the $50k for our lot. Then, if you added additional expenses for cabinets and blasting, not to mention cost overruns and the mechanical requirements of a solar house (which weren’t included because they weren’t quite sure what to do) and you have a very expensive, pretty small house. Not only that, but it’s so customized to our needs, if ever did need to resell it, we’d never make those kinds of costs back.
So. Where does that leave us? In my last post I talked about how we were now looking into Lindal and Interhabs kit homes. We spent the other night meeting with Richard Tolson at Interhabs, reviewing costs and looking at the Eurohab 3 and 4. Now, we really like the Interhabs houses. But, we don’t love them. They seem like they might be dark inside as there aren’t a lot of windows. We were assured they weren’t dark inside, but we can’t shake the feeling that they might be darker than our current house without expensive modifications. That, plus the cost issue. For the size of house we need with some decent storage, we’re still blowing our budget. Even if we traded some web design work, it still wouldn’t get to the point where we would feel comfortable taking on a high mortgage right now.
I’m not a fan of debt. It makes me very uneasy. And today’s economy certainly isn’t helping to make it better. Right now, we have a good mortgage rate with Scotiabank (it’s not as good as some, but it’s still acceptable). We can afford where we are quite comfortably. We have great neighbours our own age with lots of kids in the area. Next year Amelia starts school, and she’ll get to go to the school my wife teaches at. To my wife, this is a HUGE deal. I’m not sure why, but it is.
So, have we given up on our dream of building on this lot? Not yet. On Tuesday, I’m meeting with Cam from A Cut Above, a local Lindal Cedar home dealer. Last weekend we sat through a webinar with Joel Turkel, who has designed some amazing passive solar houses that are available as kit homes. We’ve given him our budget and he is trying to work out something for us to get us into a TD1 2400. I’m not confident that they can lower the cost enough to make it work.
So, where are we with this now? Well, I see a few options:
- Stay in our current house and hold onto the land for the future. I don’t love this idea as we’re not making huge payments on the lot right now as we were planning to build on it pretty quickly. Paying interest on something I don’t own is not a smart strategy in my opinion. I’d love to sell it for a small profit.
- Sell the lot and stay in our house. Utilize some of the tax credits that are available to renovate the house. Add solar hotwater. Plant some trees to get shade in the backyard. Finish the basement and modify the main floor to open it up somewhat. Obviously, these all cost money, but we can pick away at them one at a time so it doesn’t need to be huge.
- See what Lindal can do, and approach our bank just to confirm what it would cost. I think we may do this if they can manage to keep the cost under $300,000. We’ll see though.