Once we moved our money around and handled the title and tap issues, we were ready to close. In the information era, we didn’t even need to be anywhere in person. The only semi-stressful part was making sure all of our wire transfers hit the title company’s escrow account by the closing date and didn’t end up in some Russian hacker’s account. Once that was sorted, we electronically signed the closing documents, and then lo and behold, we owned a piece of land!
Closing on property alone in cash made things much more straightforward than they would have been in the event we had a mortgage on the property. Most of the documents signed at most property closings are from the bank, and they pertain to the terms of the mortgage, rather than to actually transferring title of the land. Since we were only exchanging title for cash, there wasn’t much to it.
The Design Contract
Once that was done we quickly started working with Shaun to firm up a design contract. His hope was to both design and build the house, but the plan was to split the work up into two contracts so that we weren’t beholden to him, and we retained the option to shop around his design work to different builders if we wanted to go that route.
The design contract took a pretty standard form. Once we started looking at building generally, and then especially once we started looking at this particular piece of property, we started a big fat design document. It included a mix of things that were absolutely necessary (3+ bedrooms, a design that took advantage of the views) as well as nice-to-haves (bunkroom, laundry room). It also included information about our design aesthetics (me: glass box with views of mountains; she: English country cottage). It was combined with a pinterest board that is now on its third or fourth iteration, where we collected images of things we liked without paying a lot of attention to harmonizing things or giving anything an overall structure. Instead, the only threshold an image or idea needed to cross for inclusion onto the pinterest board was “this is nice.”
Our design contract was also pretty upfront, in the sense that Shaun’s fixed profit and overhead were baked into the contract itself. We also massaged the payment terms so that we paid an upfront, cash downpayment, but then our first big chunk of money wasn’t due until we could make the first draw off of our construction loan. That meant that a good chunk of the work would already be done, since we needed the design to submit to the banks to get a construction loan. Back-loading the design contract was pretty helpful to us, since it meant we needed less cash on hand to get the ball rolling.
We set a total design and build budget of $600,000, which included all of the “soft” costs, like architectural fees, utility connection fees, structural engineering, etc. On top of our purchase price, that gave us a total project budget of $835,000.
After a couple of rounds of edits, we had our design contract and we cut a check for 10% of it to get things rolling. Then we were off to the proverbial drawing board.