As of December 21, our new home mortgage began. With the city signed off and the bank signed off we are officially no longer living in a construction site. (And to be honest, with the trim done now it very rarely feels like we’re living in a construction site anymore). This has been a major psychological relief for me personally. For most of the last 16 months I’ve had a low grade anxiety that one of the two organizations that still holds the strings could call time and we’d be in a serious hurt. Knowing there are no inspections or appraisals left means we can do the projects we want and on a timeframe of our choosing. Such a relief.

To finalize the loan with the bank meant turning in all our receipts and closing out our last reimbursement. That makes this a great time to do the final budget analysis on what we estimated and what we actually spent. I also have to admit that Amy has been holding up the blog almost singlehandedly. While we were 50/50 for much of the project and I was even ahead for awhile during the main building portion, she’s now got her name on 17 of the last 20 posts, so I’m due. As is my custom, I’ll make up for the lack of post count with word count. Pour yourself a tall one.

If you go way back in this blog you can find our original estimates both for the bank, and our internal books. We had to get professional bids for everything in case for some reason we could not complete the labor ourselves. But our plan was to save money on labor in some areas and use it on finer materials later. That path was working out reasonably well at the halfway point, as we also documented here on the blog. The appraisers original estimate of the final value based on the drawings was $440K, which gave us a budget of $352K we could spend and still have 20% equity. Here’s the final breakdown of that $352K:

	Bank Est.	Our Est.	Final
Permits, Fees, Surveys	$1,500	$1,500	$1,402
Utilities	$1,500	$3,000	$1,995
Demolition	$9,500	$9,500	$9,500
Foundation & Flatwork	$42,207	$42,207	$50,353
Framing	$48,230	$48,230	$44,406
Windows/Ext.Doors	$44,990	$44,990	$46,158
Roofing	$7,834	$6,000	$8,513
Exterior	$45,775	$45,775	$45,425
Plumbing	$16,190	$6,000	$6,982
Electrical	$15,775	$6,000	$7,025
HVAC	$8,980	$5,000	$12,988
Insulation	$17,126	$13,275	$13,579
Fireplaces	$3,000	$3,000	$4,073
Termite	$400	$400	$500
Drywall	$13,200	$13,200	$14,773
Cabinets & Countertops	$18,967	$18,967	$18,246
Doors, Trim, Paint	$18,000	$15,000	$32,486
Appliances	$650	$650	$0
Flooring	$14,483	$12,000	$16,558
Landscaping	$6,300	$6,300	$8,458
Misc.	$5,000	$5,000	$6,525
Contingency	$12,000	$30,599	–
Total:	$  351,605.71	$  336,592.97	$349,945

I marked anything that went over or under the bank estimate by more than $2000 in red or green ink. You can see that we traded some cash early on in foundation and framing. The final total is deceptive though as the foundation and flatwork number includes our really nice stamped concrete patio for $5500. That was not in the original estimate at all, as we had planned that we could do it long after we moved in. Given we had budget headroom we went ahead and included it on the mortgage, spending out of contingency.

Similarly, the money we saved on electrical and plumbing, and the remaining contingency we didn’t end up needing, funded some costly extras. We bought a more exotic hardwood flooring and some very unique tiles for the bathrooms, for example. Our biggest splurges though are on the cherry wood windows, doors, and trim.

Windows and exterior doors get installed so early in the project that we could not hedge with a low bid and then decide downstream if we wanted to upgrade. We decided to go out on a limb and put in for the top notch windows right from the first bid. Interior doors and trim though come much later – after the brick, the roofing, the major trades, and the drywall. So for those we put in the bank estimate a much lower number for unfinished doors from Menards and base rate trim. By the time we got to that stage of the project we had plenty of cushion left, so we got high-end stair parts to match our Jatoba flooring, we got pre-stained doors to match the windows, and we got custom pre-stained cherry trim to match the doors and windows. Having the trim and doors pre-stained probably cost us close to $10K extra, but it saved Amy several hundred hours of work and ensured a consistent finish. Using a complex multi-part Craftsman trim design and true cherry hardwood material accounts for the rest of the overage on doors & trim. We basically burned everything left in the kitty on that massive trim order, but damn does it look fine!

All told we spent just a few hundred short of the full $352K we were allocated. I put the construction loan into repayment after we moved in, which means we started paying principle on it even though it was still a construction loan (with associated high interest rate) and not a traditional home mortgage. By the time we closed this month we owed just $343K and that’s the mortgage we just signed. The final appraisal came out to $452K, leaving us with $109K of equity on the books.

We have a number of projects left to do which I think might increase that more than the cost of the work. For example, drywalling the now insulated breezeway will cost us little money but plenty of time. That will make it much more of a finished porch space. Similarly with screening the back porch and putting on the front porch roof, for which we have some of the materials already in hand. We also need to finish the fireplace surround, mantle, and flanking built-in shelves. That’s a lot of high-skill labor that will really make for an eye-catching improvement. Our landscaping still consists of old-growth trees and turf, with no other plantings yet. I would wager we’ve got about $5K in upgrades to do over the next few years at which point the house would probably sell for $475K.

When they hear we are building / have built our own house, many people assume we did that to save money. Let me assure the reader, there is not a whole lot of saving money in all this. We bought a house for $160K, spent ~ $10K to make it livable and then lived in that questionable property for 7 years. Then we spent $25K on a new garage and $10K to demolish the old house, and that’s before we even got started. All totaled we spent somewhere north of $560K to own this $450K house.

If we had instead started on a bare lot, we’d definitely come out closer to even money, but then we wouldn’t have this amazing location with our wonderful neighbors and the big old trees and the park and so on. No, we built it not to save money but to have a completely unique property that we could truly call our own. And even if it burned to the ground, no-one can ever take the memories or the satisfaction of such an achievement. And that is the bottom line.