Excavation & Foundation

Last week excavation was finished and the foundation was started.

Yuval took a great composite picture of the completed excavation:


Then surveyors were brought back for a very precise placement of the foundation. The precision is to within a small fraction of an inch; apparently the city can hassle you if the foundation is off by even one inch.

Then the forms for the footings were started. All these forms will be put in, then precisely aligned, and then the footings will be poured. Much of that will take place over the next week.

I captured a few pictures of the lower parts of the form.


And the timelapse:


The position isn't so great for capturing the foundation work, so there's not a lot to see later in the week. However, since the dirt-moving is finished for now, Yuval will move the camera to a better position. It will be at the top or bottom of the site, so it can get a nice view of the foundation as it goes in.

Excavation (Almost) Complete

This past week was all about moving dirt. The majority of our site was excavated, resulting in a big hole in the ground. Some of the dirt was piled at the bottom of the construction zone, some was moved to the lot just up-hill of us, and some of trucked off-site.

Quite a bit of dirt has been removed compared to the ground level:

A bit more action this week on the timelapse (note the back-hoe sinking in to the dirt pile at the end of the day!):

There is maybe one day left on excavation, and then the forms for the foundation will start going in.

Construction Started

After many months of work, we have finally broken ground on our new house! Last week excavation equipment was brought in to start work. The first task was to clear the lot and grade it in preparation for digging space for the foundation.

Up until recently, our lot looked something like this:

But with more cut-down trees and some blackberry and grass growing all around.

When we stopped by last weekend, it looked like this:

All the junk and extra dirt in the main area of the lot has been cleared away. The lines sketched in are roughly were the foundation will be. The first picture in particular shows where the stair tower will jut out at the bottom of the slope.

We also have a timelapse camera set up to record the construction process. Here's the video of the first few days of work.

As you can see, our camera placement was sub-optimal, and it was nearly buried! We moved it south, so it will hopefully stay out of the way, and get better footage.

Now that construction is under way, we'll try to provide more regular posts. Every week or so we'll post a few pictures, a short description of what has happened, and a short timelapse video of the work. We hope you enjoy following along with us.

Trees

A small part of getting the site ready for construction was dealing with any trees that might get in the way of the building. There were only two trees to consider, a pair of tall pine trees near the top of the lot that we were hoping to keep. They would be right near the entrance, and looked quite nice together. Yuval had a botanist come to check them out before making a decision on whether to keep them or not. The results were that one tree was healthy, but the other was only in OK condition. However, the healthy one was about half-way into our planned entry!

These two trees supported each other via their root systems, so either both had to stay or both had to go. We decided it would be safest and easiest to remove both of them now. A couple weeks ago, they were carefully taken down. Yuval snapped a few pictures during the process, and allowed us to share them.

Some of the wood from various trees on site is being saved and cured. We hope to be able to use some of it later for pieces of furniture.

Custom Construction Loan

Last week we closed on a custom construction loan with Washington Federal.

When it comes to construction financing, there are two major options (unless you can self-finance): get a bank loan or get a private bridge loan.

Private bridge loans allow you to move faster, can be easier to get, and provide more freedom. For example, a bank may not approve a loan for a home using non-standard construction methods. However, they are more expensive; interest was 15-20% on the loans we considered. Refinancing a private loan once construction is complete can be more difficult because the bank considers the project more risky than one it has already vetted.

Bank loans require a long process of approving the borrowers, builder, and project, but they are cheaper. Depending on the bank, a construction loan may have a standard mortgage rate plus a fee equal to some percentage of the loan or the loan may have a rate 2-3% higher during the construction period. Banks tend to be more rigorous about inspections, which can be both a benefit and a hindrance.

We chose Washington Federal on Yuval's recommendation. As a builder, he finds them easy to work with, and they have a good reputation (e.g., Erika's grandparents thinks they are the best choice). Another advantage is that their construction loan automatically converts to a standard mortgage; no refinancing needed.

The standard credit application for us was approved easily, and Yuval was already verified as a builder with them. The project approval required a fully-approved permit set, along with a budget breakdown, and some other details. This part of the process took longer than normal, first because we had to wait for the permits, and second because the bank had problems finding an available appraiser who was willing to evaluate a modern, green, construction project in Bellevue.

Once everything was approved, the bank worked on finalizing the paperwork and getting it sent to escrow. I worked on getting a course of construction insurance policy in place, along with some other minor details. Once the escrow agent had the documents, we wired the funds for the fees and down-payment, signed all the documents, and the bank managed to close the loan the same day. And now construction can start! Excavation is scheduled to start October 1st.

Thoughts on Relative Costs

Building a house forces a shift in perspective on money and costs. We are dealing with large amounts of money, but it is still valuable to pay attention to the small savings.

The whole project costs a lot (it is much more than we planned to pay for a house just a few years ago). The land purchase alone was more than we had ever spent in an entire year, let alone all at once. The down-payment for the construction loan is as much as the cost of the land, but those together are less than half the total cost. Dealing with numbers this large makes us a bit inured to how much money we are actually spending.

However, we cannot lose sight of the smaller costs that make up the total price. Carefully considering trade-offs, even when it only saves a few hundred dollars, allows us to allocate the budget where it is most valuable without going over our target. For example, saving a few thousand dollars on appliances and eliminating unnecessary features of the kitchen cabinets will allow us to get nicer hardwood and faucets.

Depending on what we're looking at, we change what we consider the minimum worth worrying about. At the level of the project as a whole, we generally consider the costs in increments of $5,000. When looking at our savings account or cost increases, we round to the nearest $5,000. Changing lenders to reduce our financing costs by $2,000 would barely be worth it we only considered financial savings.

But the many facets of the construction budget merit closer attention. We look carefully at increases of as little as $500. That amount is trivial compared to the entire budget, but with 20-30 categories in the budget, these small changes can add up quickly. We don't worry about everything. For anything less than $100, we consider the impact minimal. Even if we added that to every category, the affect in the overall cost will hardly be noticeable.

Whenever we make a change, especially a change that affects cost, we ask ourselves, "Is this upgrade worth it to us? Can we afford it?" By considering those items, we've been able to keep the costs reasonable and choose the upgrades that will really make a difference to us.

We do hope that once this project is complete, our financial sense of scale will return to normal. For now, we barely blink at putting $4,000 on a credit card or writing a check for $10,000 because that is what we have set ourselves up to expect.

Thoughts on Feature Creep

Perhaps not surprisingly, our design has been affected by that common malady: feature creep. It is too easy to say "Let's get this nicer appliance", or "Let's add a smart electronic control system to the entire house", or "We should add another room for guests". But every addition has an impact, and must be carefully considered.

We started with a good idea of the activities we wanted to support and a rough size target based off of where we live now and sample floor plans from an earlier project. Functionally, we aimed for a master suite and two other bedrooms; a laundry/utility/craft room; an office; a kitchen fit for two cooking together; a large dining and entertaining space; a comfortably-sized entry; space for guests; a library; and a media room. We hoped to overlap functions in shared space and fit it all in 2000 sq. ft.

That was unrealistic (building on a slope didn't help). We managed to accommodate most of these functions, but with stairs and landings and making sure all the rooms were large enough, we ended up at 2700 sq. ft. While it is larger (and therefore more expensive) than we planned, we decided it was the right layout and size for what we wanted. We dropped the guest room (but left room for a future expansion), since we don't need a guest room until the other bedrooms are fully occupied.

Detailed design presented similar trade-offs. We eliminated some kitchen niceties and kept others. We opted for a cheaper (but still nice) oven and chose a nicer gas stove. We chose slightly nicer faucets and sinks and upgraded our wood flooring. However, we simplified our exterior siding, and may decrease the built-in shelving and case-work from what we had planned.

We try to find a good balance between adding and simplifying. We keep the things that are most important to us and eliminate the nice-to-have items. We are happy with our choices so far, and we have yet to feel like we've made a significant compromise just to reduce costs. (One principle we have kept in mind is that some things, like built-in shelving, are easy to add after the house is built; while others, like plumbing, are difficult.)

It has helped that Yuval has been up-front with us about the costs. We can't say we are happy about the rising cost, but we understand how it relates to our choices (such as increasing the size). With most of the quotes in and a final budget set, we are at a slightly lower per-sq.ft. cost than the early estimates. That helps us feel confident that we will strike a nice balance between extra cost and getting what we want.