First of my blog postings related to costs. WARNING: This might be boring to lots of you, but conversely, enlightening to others. Consider yourself warned.
I want to track and post all of this stuff for the benefit of others - not so much because I want you to share our pain. There are a lot of lessons learned in this sort of an endeavour, and why not let others benefit from our mishaps, right?
So - lessons so far:
1) Housing purchase: Location matters (most), as do systems (plumbing/electrical/etc.), roofing, and foundations (and soils). Those are the big-ticket items, so if you're considering buying, make sure they're in order. We went through a bunch of needless (in retrospect) home inspections because I was turning a semi-blind eye to those things. They translate into tens of thousands of dollars each to fix. NOTE: Order of operations goes: A) troll realtor.ca and fantasize; B) discussion with partner/parents/self about the insanity of it all; C) find/interview/sign up for a real estate agent, D) have said real estate agent set you up with some sort of autolisting service that gives you additional (gory) details on the properties; E) Perv on listings and play the coulda/shoulda game with yourself; F) Get your financing sorted and approved (note: C, D, E, F can all happen simultaneously) - negotiate/use a broker and go for variable if interest rates are low/economy sucks and looks to suck indefinitely / go for fixed if interest rates/inflation is rising/economy is heating up; G) Find a property you like, tour it, and get an offer in - conditional on a home inspection (if in Vancouver, most other places, you're probably fine...it's just we live in the land of crackshacks and mansions - seriously, check out the website); H) Get the bank to sort out an appraisal (bitch and shrug your shoulders when they decline it for some stupid, unknown reason...not that this happened to us...); H) Negotiate the price as low as you can. Key consideration is your alternative if they don't agree to your price - the walkaway. Consider: how long the place is on the market, what the general market situation is like, how close you are to offering price, anything you've noticed about the place, how likely another person is to offer/multiple offers, and a few other things. If they're in your favour, break them. If they're not, grudgingly accept a fair price; I) With an accepted offer, get it off to the financing entity to finalize (and sort the appraisal...stupid appraisers...) and line up your lawyer - I'd suggest the cheapest one available; J) Sign and finalize; K) Celebrate/cry.
2) Closing costs: I think a decent general estimate is to budget 2.5% of purchase to closing costs (or at least that's what it was for us). I know land transfer costs vary by province, but then there are the following: home inspection ($650), lawyer's fees ($800), bank appraisal ($275), other city fees (don't ask - but about $300), and then other things if you need them like geotechnical assessments (which are usually $2000 plus). If you want to become rich, become one of the following: real estate agent, home inspector, a lawyer that specializes in real estate closing. It's crazy the amount of cash that goes back and forth for real estate transactions.
3) Opening costs: Yes, the closing is just the beginning. Next up are some of the following:
- Site survey: $1500-$2500. Don't ask me what you get for the extra $1000...we won't know since we're going to go for the $1500 version. NOTE: You might as well get started on the site survey as soon as you realize you're going to be doing a renovation.
- Architect: A decent ballpark number here is probably about 15-18% of your hard construction costs (the money you put into actual building materials and labour for the construction). Oh, and on a side note, here's what an architect does (in relatively plain English): A) Sketches your ideas into a rough design; B) Refines said design based on your input; C) converts it into fancy graphics program so you can imagine it all; D) Provides measurements and specific details on materials to the contractor; E) helps you estimate budgets and hire contractors; F) gets approval from City Hall for your building permits; G) Checks in to see that the trades are actually building what the architect designed and asked them to build; H) Signs off and says "looks good" at the end.
- General contractor: Not sure, but guessing about 15-18% again of hard construction costs for a renovation. Yep - those %'s add up, eh?! The general contractor is the one who: A) Helps you hire trades; B) Oversees those trades; C) Curses and swears on your behalf when those trades show up drunk (hopefully not); D) Translates the architects vision into reality via trades; E) Keeps your project on schedule/budget (if they're decent); F) Tells the architect he's got measurements wrong; G) And other things I'll figure out in time.
4) Timelines: So, when you start this kind of thing, you think to yourself: it's not like we're building a house from scratch, how long can this thing take!? Then you realize the bureaucracy (aka, City Hall). The estimates right now are as follows: 4 weeks for conceptual design (mid-Sept to mid-Oct), 10 weeks for detailed design/construction information (mid-Oct to end of December), 1 day for lifting the house (yeah - super fast), 6-8 months of construction (lord knows why it takes that long = June to August), before move-in. HOWEVER, I've also been told that between the point of getting a design submitted to City Hall for permission, it can take up to THREE MONTHS for them to approve it. SO, that could mean November of next year if things don't go smoothly. And that's not even really accounting for mishaps along the way.
So - there you have a dull, but information-filled post.
Meeting with the architect tomorrow, so perhaps more then.
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