Andi buys land
Below is an excerpt from a new book that David Wright is writing together with Richard Drace.
Andi had always aspired to owning a get away modern home in a rural environment. The dream of owning a mountain retreat surrounded by the simple, pure beauty of nature, and living in a modern minimalist ‘Dwelling’ became her siren call.
She started taking weekend excursions to the countryside looking for the dream location. She had never purchased an unimproved parcel of land and didn’t know the fine points of infrastructure and maintenance of a country home. She did know how to drive a bargain and could tell if a place had the potential for privacy and beauty that she craved.
The search for land became her primary focus but the country property would have to be cheap to satisfy her meager savings. This meant that she might have to look farther out in the country where the prices were lower and amenities less.
‘Sal’, her boyfriend was an art student who shared her passion for modernist architecture. He also had little sense about construction and no concept of the required infrastructure for undeveloped land. He would accompany her on these excursions, making the weekend a date. They had visited several properties in different locales where he would paint lovely portraits of potential architectural visions in her mind; there was never a discussion of the challenges or restraints with the land, their enthusiasm was unencumbered by the realities.
One day Andi came across a listing for a 5 acre parcel in the mountain foothills some 60 miles from the city where she lived. The photographs showed pine trees, red earth hillsides and the property description was enchanting: “rural mountain property, forest views, remote but close to historic mining town, gated access, well in and septic tested, snow in winter, year round accessible, priced to sell because owner is relocating.” She pounced and the adventure towards county living began.
This property was in the forest, private and away from the city traffic and smog. They contacted the listing agent, visited the site and fell in love with the land. They spent the weekend picnicking and enjoying the solitude; the land was covered with cedars, pines and manzanita.
The orange colored hillsides were cliffs of decomposed granite left from the days of hydraulic mining, which formed a natural barrier on two sides. The access road was gravel that forded a small year-round creek next to the land. The 1/2 mile access drive was shared by three other parcels and it ended on the adjacent property just down the creek. They met the neighbor who lived near the gate; he had built an off-grid solar house and recommended that they get a four wheel drive SUV for the winter time. Andi liked the challenge of learning to drive a 4X4 and a solar powered house sounded romantic. The neighbor said that it snowed occasionally, but typically not over 24 inches deep. She was also told that the creek got wider with the spring runoff making crossing it tricky but not impossible. There was power and telephone service about 3/4 mile up the road and the neighbor was thinking about extending it to his property so that he didn’t have to rely on a backup. Sal identified two likely spots on the property where he thought an ultra modern Dwelling would look great. She just had to buy it.
It was near the end of the real estate season in the mountains and a good time to make an offer. The property was listed at $56,000 as is; she made an offer for $45,000 and they countered with $50,000, and a deal was made. The well report, septic test and property boundaries were part of the closing paperwork. The agent could only show them two of the five corner markers because of the steepness of the property. They took the agents word about the boundaries and the neighbor’s about the year round access; she waived the boundary survey which would have cost an extra $2,000 and the well yield test which would have cost another $500. She wanted to save these expenses for the design and building phases.
The sale went smoothly with a 60 day escrow; she made several trips to the site in the next two autumn months and even camped out twice. They made a couple of paths through the manzanita and laid out a couple of potential building sites by placing rocks around the edges. It rained once and the creek rose a few inches making it too deep to ford in her Toyota sedan, but they found a way to cross on a log that had fallen across the stream. It was an adventure to spend time in the woods. Andi checked with her bank to find out how much construction money she could qualify for. With her current job and income they would lend her up to $325,000 for a 30 year mortgage at 6 1/2%. It would involve a construction loan at 8% that would rollover to a long-term take out mortgage at completion of construction with no service fee. That sounded reasonable and she looked forward to getting started with the design and construction soon.
Andi and Sal both knew the value of fine design. They studied magazines that featured modern house articles and learned from various home builder testimonials that hiring an architect was the most important thing when designing your own modern ‘Dwelling’, especially with a challenging site which this was turning out to be. They researched architects in the area and found a website for an experienced solar environmental architect (David Wright) who lived it the same county. His work examples were varied, but he had done some very modernist designs and he was knowledgeable about local infrastructure needs, codes and builders. The idea was to design the house over the winter and start construction in the spring when the weather warmed up and site access was easier.
The architect visited the site and evaluated the possibilities. He surmised that there was only one suitable place on the parcel for building a 2000 s.f. two bedroom house with a guest house and garage. One of the sites that Andi and Sal had identified was in the low part of the parcel near the road in a small meadow. This was the only place suitable for the septic leach field and the sun did not reach it in winter months. The buildable spot was high up on the parcel, below the orange cliffs, on what appeared to be a mine tailings pile of rock debris. This site received fair winter sunlight and would be a dramatic place to build, placing the house high above the creek and entry drive. The driveway would start low near the meadow and climb steeply around the hillock creating a dynamic approach to the modern sculpture of a house. It was agreed that this would be a commanding house site; here a house could be built that could possibly be published in Dwell Magazine.
The architect’s fee was competitive at 10% of the construction cost, especially considering his reputation and the challenge of designing for a difficult and limited site. He said that, in addition to a topographic survey, a structural soils report by a geotechnical engineer would be necessary to verify the stability of the house site hillock. The bearing capacity and seismic classification would also need to be provided by the geotechnical engineer. None of these engineering and surveying costs were part of the architect’s fee and they would roughly run $7,500. Suddenly the cost of the land was not looking like such a great deal.
Andi was beginning to wonder what the cost of designing, engineering and building her dream ‘Dwelling’ might total. Now she was too swept up in her dream not to go through with it, she would have to adjust the scope, scale or time frame of the construction of her dream house to make it all work. She worked closely with the architect, providing a written description of each element of each room of the house that she envisioned and compiling a design binder of the photographs, magazine articles, sketches, appliances, fixtures and all the components of the modern designs she had been looking at for years. The architect sited and arranged the 1,500 s.f. house on top of the hillock, with the garage off to one side. The guest house rested on top of the garage and was connected to the main house with a breezeway which acted as the entry for both houses.
The architect recommended a builder who was then engaged to develop preliminary construction cost estimates. The cost would be in the area of $225 per square foot totaling $562,000. This was not a huge amount for custom home construction and about normal for the area. She approved the budget and the architect began creating the construction documents, specifications and engineering.
When the topographic survey was completed the architect decided that a civil engineer would have to design the driveway and create the grading plan. This was not simple due to the gradients and drainage, and would cost about $6,500. The septic system which had been tested for prior to sale of the land required $2,500 to produce the final septic system design and required a special design leach field that would wind up costing $12,000 more than a standard system. The driveway was steep and would need to be an all weather paved surface of concrete or this would cost an additional $6,000. The property was several miles from the nearest fire station or hydrant and therefore required an 8,000 gallon onsite water holding tank with a hydrant hook up to the tune of $12,400.
The contractor investigated the power line extension to her property. The utility company wanted $78,000 to provide power to the house site, this could be reduced some if the neighbors agreed to join in the extension, but they were not interested and couldn’t afford it. Solar electric was estimated to cost $40,000; so to save $38,000 on the cost and have “free” electricity forever, it was not a question and an off-grid solar system was chosen. There was one small detail, the bank that she worked with would not loan money for an off-grid house. They did not want the possibility of repossessing a house that was not connected to the power grid because of limited resale potential; that was their policy. Andi checked around and found an out-of-state bank that would loan on solar electric, but it was only for $250,000 at an interest rate of 9% for 15 years; a whole different formulation for her to assume. The answer was to phase the construction, building only the house and garage first. The roof of the garage could be a patio until she could afford to build the guest house. Andi thought this was doable and she pushed ahead toward her goal, even though she was beginning to feel like she might be getting in over her head.
The plans were submitted to the County for plan check and permitting. They required 50% of the cost of the permit at submittal and the balance at take out of the permit. The total for the permitting would total about $24,000 by the time Building, Environmental Health, Planning Traffic, Public Works, fir and school mitigation fees were accounted for; at last it looked like most of the costs were identified.
The Building Department routed the plans to all of the other responsible agencies. It took 6 weeks to process the grading, building, and septic system permits. Most of the plan check items were as anticipated; however public works had visited the site and they wanted a soils stability analysis of the cliff embankment above one side of the house; it was on the neighboring parcel where the house was near the property line. Site grading of the top of the hillock would undercut this bank by a few feet and would likely require stabilization to prevent future sloughing of the hillside. This little requirement took a few weeks to determine that a retaining wall would be required; the testing and engineering cost $4,000 and the retaining wall would run about $26,000 an unanticipated additional expense. Environmental health wanted a new well yield report because it had been three years since the well was drilled; this cost $750 and showed that the well production had decreased from a healthy 10 GMP to a minimal 3 GPM. This necessitated a 5,000 gallon domestic water storage tank to the tune of $7,000, but this was OK because it would be required anyway to work with the slow production of the solar electric pump.
The permits were cleared, the final fees paid and the permits issued. The cheap land that Andi had purchased turned out to not be such a great deal. Because of the extra costs incurred in site infrastructure she had spent most of her construction loan deposit of 20% of the estimated cost of construction, so she could not qualify for the construction loan until she saved a lot more money. She was dead in the water and her dream house construction was put on hold indefinitely.
Andi eventually built the modern house in the woods, but it took four years and $150,000 more than she had anticipated simply because she had not paid due diligence to evaluating the land prior to purchase. The degree of difficulty involved in building on a piece of property can easily cost more than the cost of building a house; it is wise to employ the expertise of a competent real estate agent, architect, engineer and maybe even a building contractor to evaluate land before purchasing. These consultants can save you hundreds of thousands of dollars and a lot of time, and are well worth the upfront investment.
