Home Again: After Two-and-a-Half Years, Teardown is Complete

Advice for those brave enough to invest in home improvement.

By NANCY KEATES THE WALL STREET JOURNAL

It's a wrap. Thirty months after making the decision to tear down and rebuild, my husband and I have moved into a brand new house on the lot where we lived for 10 years. Moving into a new house is like coming home to a gift–though one we will pay dearly for every month.

The new house is 1,000 square feet bigger and 50% more expensive than we initially planned. And the housing crash and the recession have made the decision much riskier. But being intimately involved in the design and construction of our home is an unparalleled experience–and a challenge I would gladly take on again.

We now have a house big enough (five bedrooms, three bathrooms) for our two sons to run around in the winter when the rain in Portland makes playing outside difficult; and we have a guest bedroom where our parents and friends can stay.

For this final Teardown Diary column, I offer lessons learned and advice for future home builders and renovators still willing to invest in home improvement in this uncertain environment.

Assume the final bill will be at least 50% more expensive than the initial calculations. Even though most home-building books and Web sites warn this will happen, it can be hard for novices to believe that individual cunning or just plain frugality can't make an exception. It isn't just one aspect of the process that causes the bloat. It is everything from the design getting more ambitious, to the price of materials going up and dealing with miscalculations by a contractor or architect. Cost overruns also come from the little decisions adding up: When faced with an option of slightly more expensive but significantly better performing fill-in-the-blank (water heater, windows, alarm system, etc.) most people choose to upgrade.

Decide if you want an architect who is passionate about the project. Our architect, Dave Giulietti of Giulietti Schouten, is said by other architects to be one of Portland's best. He did an excellent job explaining the design steps, figuring out what we wanted through an extensive questionnaire and helping sort through our wants and needs. The house he designed for us is beautifully sited and exactly what we asked for (though we all could have worked harder to keep the size down). (See photos.) The rooms are proportioned so they aren't too big or too small, the ceilings are high enough (10 feet on the first floor) without feeling cathedral. Whenever the contractors had a question or some detail wasn't fully worked out, Mr. Giulietti stepped in to take care of it.

The new house (right) is on almost the exact same footprint as the old house (left). It is just two stories taller. The yard and landscaping did not change.

But we never felt Mr. Gulietti's heart was fully in our project. His firm handles all kinds of architecture, but its pride is its contemporary designs. Drawing a Colonial–what is essentially a "period piece" as one worker called it–isn't his dream. A week after our home was finished, a card came in the mail from his firm advertising its new and in-progress projects. They were all modern and there was no mention of our house. Mr. Giulietti's response: "I certainly enjoy designing modern houses more. But the mission that I built the firm on is to provide good design and architectural services to our clients, no matter the size, budget and type of project…" Passion in an architect can make the project more exciting. But it has a downside: Sometimes architects take over and don't listen to the client's needs, resulting in a design and a final price that is way off base.

Check the contractor's references. It is amazing how many people are told that the right contractor is the keystone for the building process–and they still don't check references carefully or ignore previous homeowners's complaints. All the self-help books on building and renovation say the most important decision is to find a good contractor. We asked everyone we could find who had used JDL Development and never heard a bad word about them. They came through for us 100%.


Of course JDL isn't cheap–they charged us a 17.5% fee. It is possible to find contractors who charge a lower percentage or a fixed price. But in my opinion it is more cost effective to splurge on the security of knowing that someone is looking after every little detail to make sure it is done right than to scrimp on the contractor and spend more on materials or finishes. Our project managers, Dave Lyons and Ron Boersma, built our house as if it was their own. Now, four weeks after move-in, Ron has been available to help solve problems like the squeaking garage door and an incorrectly placed shower head.

Read the fine print of the loan agreement.Some readers gave me a hard time when I ("a financial journalist!") complained I didn't know when I signed our loan--which covered construction through to permanent financing, or home mortgage--that the bank could change its mind and not extend the loan amount it said it would. We didn't see the final contract until we were in the title office, faced with hundreds of pages of tiny type in unfamiliar language punctuated by dollar amounts that didn't always add up. It was confusing and frightening and I would never go into that again without the help of a real estate attorney.

When the housing market tanked and credit froze, banks started changing their lending guidelines. We worried the appraisal of our property at completion would show its value had declined from the initial appraisal because of the overall drop in housing prices.

Luckily the value of our home actually increased and Wells Fargo came through, extending a 30-year fixed Jumbo loan for 6.5%. It is higher than some Jumbo loans out there. One mortgage broker said if we could get that rate for a Jumbo we should take it; another said he could find us one for 6.25%. But we had started the process with Wells Fargo, formed good relationships with the loan officers and had already handed over reams of financial statements. Others haven't been as lucky, getting stuck with construction loans they cannot convert to permanent financing.

Ask anyone and everyone about their construction experiences. It was by accident one evening at a cocktail party that two women told me how bad window installations had caused leaking and structural problems in their new homes; they gave me a list of questions to ask my contractor. It turned out the subcontractor had cut some steps in installing our windows.

I quizzed neighbors and friends who had built or remodeled their homes about their mistakes and good decisions. One sat in on a meeting with me between the contractor and the heating and air company to determine the best system for our house. She also took a look at our initial design and suggested moving the first floor playroom to a part of the house where the mess they inevitably create wouldn't be visible from the front entry. Another friend pointed out that the color options the designer had chosen for our walls were not the kinds of colors I had really liked when I showed her magazine cuttings. She spent hours with me finding just the right hues–and also gave me all her favorite lighting catalogues.

This kind of sourcing can go beyond acquaintances. When I saw a new house built to look like an old Colonial in another newspaper, I called the architect to get the exterior paint color. Just one call to the owner of a pretty home on a design blog on the Internet opened up a new world of tiles. Confused by conflicting information from different types of insulation manufacturers prompted a query to the government agency in charge of testing insulation.

Don't be afraid to read and learn about subjects that seem intimidating. When we first started, as I wrote back then, I didn't know the difference between a Colonial and a Tudor. I certainly didn't know about the existence of on-demand water heaters or that most home insurances won't cover for earthquakes if you have a slate roof. I learned: For example, it is necessary to understand how different types of insulation work in order to make the cost benefit decisions that will work best for your budget and your house. Different roofing materials are appropriate for different climates and environments. An on-demand hot water heater might or might not make sense for the way your family uses water.

The same principle holds true for design decisions. There may be some innate talent in choosing how one color plays against another in the placement of living room furniture. But there's also a logic that is learnable; and the more you study it, the more you understand.

Read, study, ask, listen, watch–those are the golden rules of home building. The other truism is that the first time is just practice. Now we are really ready to build a new house.