Money Money Money

guideanna

Hi All,
We'll be starting our build in January, we've just signed for our site so that has depleted a major dint in our savings (we had to have 20% of the site price) and the bank is covering the remaining 80%.
I'm a little confused as to what's next tho...
Do we get our next stage of money or do we have to get to floor level before we can request the next stage? If we have to do it ourselves i don't know where we're supposed to get the money from considering it's probably going to run over 10k.
Whats been people experience at this stage?

ThePiedPiper

I found this side of things very frustrating also.. The way I worked around it was by organising a €20,000 overdraft with the bank and getting short term loans from other sources. Effectively the money had to be spent before the bank would provide it to us and this really is frustrating. This is generally the case with Direct Labour build as far as I know.

If you're going by a contractor, the contractor's stage payments will match the stage payments from the bank, so that should be a lot easier.

Poor Uncle Tom

The person looking after the build in stage visits for you and certifying works to the bank for stage release requests (your Architect/Engineer) will most likely have a scheduled breakdown of stage payments already done and this should be written into any contract that may exist.

Contact your supervising Architect/Engineer and they will tell you when the next stage is due to be released and the amount.

But it is worth remembering that a stage payment can not be released until the stage of works has been reached and satisfactorily completed. In normal cases a Building Contractor will carry this credit until he is paid. For Self-Builds the client themselves must carry the burden.

guideanna

Thanks for that. Unfortunately this was not what i was hoping for.

RunForestRun, we are going direct labour so i guess we'll have to look int getting a bridging loan of an over draft. Did you get an overdraft set up and if so can you remember what the charges were?

It's crazy the way you have to have the works carried out before you can get the money, should i be looking for at least 60days credit from all the contractors involved on the build where possible?

muffler

"mr edge to you" had a thread about this a couple of months ago. If anyone can recall it maybe they would post a link or if someone has the time then maybe have a trawl back through his posts.

guideanna

Thanks Muffler, i'll do a search for it!

ThePiedPiper

guideanna wrote: »

Thanks for that. Unfortunately this was not what i was hoping for.

RunForestRun, we are going direct labour so i guess we'll have to look int getting a bridging loan of an over draft. Did you get an overdraft set up and if so can you remember what the charges were?

It's crazy the way you have to have the works carried out before you can get the money, should i be looking for at least 60days credit from all the contractors involved on the build where possible?

Guideanna,
I got the overdraft set up in the bank where I've a good relationship with them over many years. The interest rate was 11.9% AER which is fairly drastic. In my case it was only short term, so worked out OK.

I'm not sure if you'll get 60 days credit from your contractors to be honest. Most guys will want to be working for hard cash paid weekly from my experience. Again, that's just my experience, others might have a different view...

You will probably be better at looking at getting good credit terms with your builders merchants and materials suppliers. Again, you may need to have a good relationship with them to start with or else know somebody who'd be happy to let you use their account; family member or close friend possibly?

mr_edge_to_you

Hi Anna. I'm on my mobile as I can't access full version from work. I think you will have to arrange short term finance. But you will need to engage with your sign off engineer here. You will need to supply the engineer with a list of costs that you need to cover along with actual building costs such as window deposits, council fees, esb etc. Sit down with a pen and paper and make e detailed list so that when you draw down the first stage you can pay your in direct construction costs as they arise. We went the contractor route so it wasn't a major issue for us. Just run everything by your engineer. They can only sign off and release funds for work completed. By the way our last drawdown was delayed because the bank questioned the engineers sign off vaulation. We got sorted in the end but be aware the banks are doing things by the book now.

guideanna

Yes we (well OH) has an account set up with the builders merchants so i must check the credit terms on that before we start and see can we extend it.

Holy cow 11.9%....agh that's scary high, i suppose it's not going to be for a long period of time though and i suppose if that's what we need to do to get through it then that's what we'll do.

Our architect hasn't given us any breakdown of the drawdowns...in fairness he hasn't been looking after the budgt for us, we're doing that all ourselves. EBS have told us there's no set percentage of what we can draw down at each stage so would i be correct in thinking that if i over estimate on the second stage (floor level) and then come in on budget, i can use the leftovers to start me into the next stage, and then hopefully not have things held up waiting for the next lot of funds to come through?

Naux

If you know the sign off engineer well enough(ie: he knows you are not going to skip the country/spend the money on something else) he may sign off on the completion phases a bit earlier than they actually finish so that you can drawdown.



One other point.Do not rely on one builders providers!!

If you can:

Price every batch of materials (eg raft materials or roof materials)induvidually with at least three different builders providers.

I have done this and if you can get them to compete for the order you can save 15% to 18% in my experience.

guideanna

Cheers Naux, we are gong to indeed do this. I'm still waiting on one of them to come back to me with their itemised quote and i've already said i'll be pricing around so to give me the best rates they can, can you believe they were actually trying to charge me for doing the quote, i told him i would not be giving them a penny until i saw their prices and if that was a problem i'd take my plans elsewhere...they then completly reversed what they'd said and are doing the quote foc...they have my plans nearly two weeks though so i'll be popping in on Saturday and if they're not ready i'll be taking them back with me.

Naux

Personally I would not give them the plans. They might develop ideas on how much you can afford to pay based on the size & design of the house!!


The trades that you employ should be able to give you the appropriate materials list for each section of the job.

guideanna

Well we wanted a detailed quote Naux so we had to give over the plans, it's not that extravagant of a house that'd they'd think we'd have money to burn.
We know a few of the tradesmen who'll be working on the house and in most cases we will be buying in the materials that they need so i just want to get an idea of how much we'll be looking at for materials. Plus, since it's free, i may as well see how the merchants spec it up and what kind of quote they come back with for me. All i then have to do is get my labour and i'm sorted (she says naively before any of the build work or headaches start)

Poor Uncle Tom

You have the right idea, but don't forget that most tradespeople can get their materials cheaper than a member of the public can. Also remember to get your self-build site insurance.

guideanna

Thanks Uncle Tom yes we'll be letting our tradesmen get the materials where their discounts are better than ours but i know a few of them have requested we have an account for materials and they'll just charge us labour which is fine with us as OH works in the industry and he says this is fairly norm on direct labour, or where you know the tradesman working for you.
Our mortgage provider is giving us free insurance as part of the mortgage. The only stipulation is that we have to take out our home insurance with them for 1 year after the house is built. Their rates are supposed to be competitive and it's saving us over 1000 by them looking after the insurance.
Also we will only be using tradesmen with their own insurance, since we're going direct labour i think this is very important to check with anyone who works on site!

Shorty69664

Our mortgage provider is giving us free insurance as part of the mortgage. The only stipulation is that we have to take out our home insurance with them for 1 year after the house is built

Would be worth double checking this. I went with EBS and they had what sounds like a similar offer, however........ This was for "Course of Construction" only and as such, does not cover public or employer's liability.
Originally I thought it did but ended up having to pay for the extra insurance.
It may not be the same in your case but worth checking all the same.

griffk

guideanna wrote: »

Well we wanted a detailed quote Naux so we had to give over the plans, it's not that extravagant of a house that'd they'd think we'd have money to burn.
We know a few of the tradesmen who'll be working on the house and in most cases we will be buying in the materials that they need so i just want to get an idea of how much we'll be looking at for materials. Plus, since it's free, i may as well see how the merchants spec it up and what kind of quote they come back with for me. All i then have to do is get my labour and i'm sorted (she says naively before any of the build work or headaches start)

Hi we are a couple of weeks a head of you guidenna,we have our foundations in and are ready for subfloor, im also going direct labour but iv given a contractor the job to bring the build to wall plate level and ill go direct labour after this, if found this was the best and easiest way to do things builder came into site start of week and dug out site foundations,blockwork in for subfloor now,also i got my engineer to release our stage payment after foundations were poured (remember he wants to get paid too)im not paying any money to builder till the subfloor has been poured and then the balance at wall plate level,also we came across alot of fees not predicted at the start of build,paid 1750 for esb and 1250 for water 6000 to council,it doesnt be long adding up, my advice to you would be to give the start of the job to a contractor who can do it with his own money and credit,rather than you having to borrow off banks again, any builder will bite the hand off you now to do the job.:)

guideanna

That's great griffik, that's exactly what we've decided to do, we've a couple of contacts who do everything from the foundations to wall plate level. We will be getting the materials for this ourselves but we kind of knew this already. This will indeed make it a lot easier for us and at least get that stage done quicker for us.
Luckily our site included all our services, water, esb, telecom, council fees, etc so we've thankfully not had those hidden extras to worry about. I'll see how strict our engineer is about signing off at this stage as obviously the sooner we get the cash flow the sooner we can progress to the next level. He's a bit of a stickler though (which is a good thing i suppose) so he'll probably be wanting everything done before he signs off on it!
Also can you tell me who i should be getting to mark the site? Would the guy doing the dig out do it or the engineer?

griffk

engineer would normally mark the boundries off ,but the builder digging out should be marking everything else,best of luck with it