Feasibility, The County and Permits.

We found the ideal lot. We contacted the owners. They are ready to sell. Now what? We chose to represent ourselves. We didn't see the need to hire an agent to represent us. We knew what we wanted. We contacted the owner in early January. We negotiated via email and telephone several times over the course of over 3 months. (She was not in a hurry and she also wanted to have the septic study done to know if it was possible as well as what kind of system would be allowed to determine the value of the site.) We agreed on the sum of $200,000. The seller had not yet signed a contract, however, she felt it necessary to pay an agent a small fee to handle the sell and the paperwork involved. By us not using an agent and the seller agreeing with an agent a small lump sum to handle the sell, we saved (by getting a lower selling price) and the seller saved (by not paying fees on a market value sale.) This agent wrote up our contract with a couple of contingencies.

• Feasibility. We needed to be sure that Thurston County would allow us to remove the existing cabin, build where we wanted and would allow a septic system. We also needed to confirm that the existing well provided sufficient water supply.
• Finance. We were pre-approved, however if something came up (such as loss of job) we didn't want to be stuck and forfeit funds.

We originally signed our purchase and sale agreement on 4/21/16 with a 60 day period to close. We had to file two 30 day extensions and didn't actually end up closing until 8/1/16. Feasibility studies, Thurston County permits and construction loans take time! 

Thankfully, the seller began the septic study before we signed our contract. I contacted the septic designer and met him on site to discuss our plans. He planned the septic design specifically for our house before we even signed a contract with the seller! This was a bonus and huge time saver for us when it came to submitting for permits because the conditional approval had already been processed with the septic design for our house footprint and size. 

The next this was testing the well water. Making sure that it was clean and sufficient. We did the test by submitting samples to Thurston County (which is also a requirement prior to being issued a building permit.)

The last item on our list of contingencies is finance. This one was a beast. We were pre-approved, yes. But an owner-builder construction loan takes much more information than a standard loan. You must have bids for each line item that you plan on drawing funds for. And the amount on that bid is the amount that you will have to use for your line item. Estimates and bids began consuming my days. Two things to consider: If you submit the highest of three bids, you are safe to know that you won't go over your budget and may even have funds leftover. However that means you are increasing your down payment. Owner-builder construction loans usually require 20% down. And so choosing higher bids, may mean you are coming up with thousands of dollars more on your down payment. Second, if you submit the lower of the bids but choose to buy more custom materials or go with a more expensive supplier/sub-contractor, you must pay for the overage out of your pocket. Think hard on the best route. We had to submit some lower bids due to cash flow at the start of our project. It's worked out as we came in under bid for some of the first line items but it could make for a rough start if you ran out of cash early on in your project.