Site tests returned

So we got our site tests back late last week. Chris our sales rep opens it up and starts reading over the phone.

"Site tests not performed... unsafe due to long grass".  It took 3 weeks to tell us that! Now were going to have to wait another week or 2 again while the grass is slashed and the soil tests are actually carried out.

Admittedly the site is overgrown and does require attention but they could have told us that 2 weeks ago so we could have done something about it.  Apparently the vendor was also instructed by council to do something about it, but he is dragging his heels.

With only 4-5 weeks till settlement were starting to slip behind schedule and we have not even turned the first sod. *sigh*

Official renters

Today we pay off our mortgage! Woohoo yeah, right on. Well its temporary :-(

We settle on our unit today and begin our rental agreement.  Our purchasers had their final inspection yesterday and the rental agent also did their condition report. I remember asking the agents to not leave anything to the last minute so as expected everything was left to the last minute. Hopeless.

The surplus funds from our sale will go into our savings account gaining a few extra $ for about a month or so, then we take up our land mortgage in mid December and do it all again.

Its too early to find out about our soil tests.  Hoping we can get them back by Saturday week.

Soil tests ordered

Not much of an update at this time.  Our builders have finally fixed up our preliminary site sitting which only took them 2.5 weeks,  hopefully this isnt a sign of the process to come as were aiming for a fairly strict timeframe.

We have authorised soil/site/contour and feature surverys now. Once that comes back we will know exactly what our budget is.

On other news the settlement on our unit is just a week away now. We will be returning as renters just like old times.

You designed us a cave? Thanks

So we have been working with a volume builder on the design, layout and options of our new place and you would think they would have the foresight of thought.... evidently not.

In early setout plans they decided to have no north facing windows in our kitchen, dining and family room and only a western wall made of glass.... it also gave us 2 disjointed side yards.... great thinking....not. 

I dont know about you but living in an area that has effectively become a cave that would be dark until midday then facing the searing western afternoon sun isnt that appealing...AT ALL!

I really wish they thought things out better and applied some logic. It really was a face palm moment.

Our alternative is to put in a large horizontal window on the northern wall and shrink the house by 300mm and remove a non structural pilar of 600mm which will give us a 1m walkway behind the house and access to both side yards would be joined.

Land deposit paid

Today we paid the balance of our deposit for the land and have asked the vendor if they are able to clear it sooner rather than later so we are able to perform soil tests and site surveys as that is the next step holding us back.

We already know that our land is "P" class due to neibouring trees however the building area is "M" class. We found this out from our own soil test we had done prior to purchase.

We are now accelerating the steps to get moving and will are in continual contact with our builders.  Early indications are for a May finish.

Ducks in a row

Seems like all our ducks are lining up in a row now.

I know I have mentioned in a previous post that we would not and could not settle for anything less than a certain amount but sadly the interest in units is not as great as houses and all the price indications and offers we got were substantially less than what the agent quoted us to date.  Over the past few years the price on units has been falling (about 18% according to rpdata).  We only fell a few grand short so in the scheme of things its really nothing.  At least we can move on with our lives and our build.

So we have accepted an offer on our unit but it comes with a small shortfall on what we based all our budgetary figures off but on the plus side we have a shorter settlement and a rent contract lined up so we dont have to find a place to rent, no canceling and reconnecting services, no additional mail redirections, no storage fees and we wont have to organise all this with 2 little tackers getting in the way* It's the stuff moving nightmares are made of. *sorry boys you will be a thorn in our side here*

Because our unit will settle before our land, we will be cashed up making the loan for the land much easier and allowing us to progress to the next step.

Now we are able to get things moving with a builder and hopefully get to the state where we can start building early in the new year.

Congratulations... you bought it

We have a block of land now :-) well all condtional on finance and some terms we put on the vendor but should be all good to go.

It was our first preference block as it in a magnificent location, nice and quiet and in an RZ3 zone meaning "incremental updates only". So basically no 2 story places allowed, in an already established residential zone, no McMansions and no houses jammed up together side by side. Best of all we were able to get it for less than the vendor was wanting which is a bonus as it allows us to spend more on the house. Only thing is its a back block but we dont mind that.

Its around 550m2 mostly flat, there is 1 corner where the block slopes down which is my main worry for site costs but the price was right.

The settlement on our land will be mid December giving us a good chance to settle our unit in the meantime which would be the best case scenario.

We also appear to be getting more interest in our place which should interpret to us getting some more offers soon. Fingers crossed that everything starts falling into place from here on if not we will be juggling 2 mortgages and be eyeballs deep momentarily.

Savings on shopping day

The way we hope to get our shopping budget down is by changing the way we do our shopping. We make a list and then pick a night and do all the shopping for the week.  I have to say that in the past we have been snobs only buying our food from coles/safeway but for years we have had Aldi at our shores. This is now our first point of call where we try and get as much stuff here first before going down to the other guys to get whatever else we cant. Its been working well too. I reckon this alone has cut our bill down significantly.

For instance. With our youngest he used to be in huggies nappies which cost about $33 for 48 nappies. Using the Aldi alternative it now costs us $9 for 50 a savings of at least 2/3. I have to say whilst the quality wont match the premium brand they still get the job done better than some of the  cheaper alternatives.  Plus the little tacker goes thru them fairly quickly so the savings accumulate quick on this one item. So we no longer have winnie the poo on the front but that's just all marketing fee in the end which adds to the overall cost.

We also used to purchase our baby wipes from toys r us because over the years we found them to be the best quality vs price. This would cost us about $18 for a box of 6. Enter Aldi's alternative which is $9. Half price and once again the quality isnt that of the premium brands but it still does a very good job compared to some of the products available.

Baby food sachets and yoghert sachets are also significantly cheaper and when you have 2 growing boys they like to snack a lot we are saving a bit from this as well.

Every cent really does count and we really haven't given up the quality of our living standards either.

Reigning in the spending

We have of late had to accept some hard facts in that our current living standard was probably a knotch or 2 above where it could and should be. Thats not to say we were living beyond our means not at all, its just that there are so many more savings to be made and that as our income increased so did our spending gobbling up any additional saving we could be making.

Now we are putting an even stronger focus on the budget were more conscious of what/when and where our money is going.  In an ideal world I dont want to be micromanaging our money but for the moment it's for the best.

Soon we will find ourselves in a "forced" savings mode meaning we have to have $x saved by the end of the year or we may be in some serious strife but were hoping it doesn't get to that and our savings plan addresses it if things dont pan out the way they need too.

Sticking to the budget

For me setting a budget is quite an easy thing to do. I know when I get paid, I know my expenses and when all the major things are due like car insurance, car registration,  gas/water/electricity/phone bills whether that be monthly/quarterly or annually.

The budget I keep is a simple spreadsheet with the month as columns and budget categories as rows. Its quite effective and does the job well. I can see how much ive allocated to each category and unspent money is rolled over into the next month. This allows me to start putting aside and allocating $50 a month so that when that $600 owners corp fee is due there is money there ready for that purpose. Its not 100% ynab style but its pretty close.

But like all things making a budget then sticking too it are 2 seperate beasts. Its a continual struggle to not overspend in a category such as shopping or misc (the black hole of discretionary spending!) Any remaining money is thrown at the mortgage bringing that down.  Sadly for this year we have not been as successful as we would have liked and we are having to reign in spending, but this isnt a bad thing.

With our plan there is now a burden on us to keep within our budget as there will be very little wiggleroom should we not be able to commit to it. We will require every spare sent to save for deposits and the additional expenses of owning a house such as stamp duty and conveyancing fees.  Expect some cost cutting to occur.

For Sale

As this blog was started after some of these events happened please bear with us as we play catch up.

About a month ago we decided to take the plunge and sell up our unit once the second "request for planning permission" notice rolled in. To date we have had 7 double story townhouses commence construction in the neibourhood and a request for 6 more to come.  Precedent has been set and the gates opened. Another block that is prime for more has been sold and it wont be long before re-development happens. Even the agents selling these properties are rubbing their hands together blatantly targeting developers for knock down and rebuilds.  Such is life. We are going to fight each one until we move.

Back to the post now.  We start the process off by contacting our trusted mortgage broker and running the numbers past him he feeds it into his calculators and simulators and says the bank will let us borrow a further 160k on top of our existing $250k should we want too. Great so we have a rough idea of what our budget could be. I say "could" because I have no intention of going "eye balls deep" into debt.

You might be thinking wait up a sec. 410k mortgage from a 250k one.  Thats madness.  But our financial situation changed for the better in the past few years meaning this still isnt as far as we can take it. Crazy I know.

We then contact the local real estate agent and basically spend a few hours interviewing him and getting his thoughts and sale processes and sign the exclusive agent period forms. Totally committed now.

The agents valuation came in 5k higher than an official bank valuation we had done 15 months earlier so its on the mark and what we need in order to upgrade to the next "rung" in the property ladder.

We then get in contact with our solictor to arrange the conveyancing side and start the long process of paperwork.

The first open passes no one attends. Were floored by this. We had put a lot of work into this place (but not to the point of over capitalisation) and its a good price.  The second week passes and we have 1 person through.  They indicate that its priced correctly but they need a 3rd bedroom.

At this stage even the agent cant explain whats going on. I have 2 theories.  The first being first home owners are waiting for the federal election to be over, and the second is because the street is filled with tradies making it hard to get through the steeet. We decide to trust his judgment as he sells houses for a living and we drop the price to induce people to attend. It comes with a warning that there is a minimum price we require (which was his valuation) now its up to his negotiation skills to seal the deal for us.  We wont be conditioned down to a price especially because were not in a forced position to sell just yet.

Week 3 comes in and we hold both a mid week and Saturday inspection.  5 groups attend. 3 want more info and we get an offer 25k below our requirement. I guess this is what happens when you lower the price. You attract the wrong buyer. Our agent is fully aware of the price we need so the owness is on him to be a good negotiator.

The federal election is happening this Saturday. Im hoping for things to change for the better once Australia finally gets a stable government.  Until then its more open for inspections! *sigh*

Thats not included.....either is that.

Now our focus has changed to building we have been researching builders and blocks of land and working through all the inclusions or I should say the lack thereof. We were already aware of all the extra materials and quality that goes into bringing your house to the display house standard and its depressing especially when your working with a limited budget knowing we might not get much house.

You want more than 1 light in the room? Or perhaps more powerpoints, what about a drive way or flooring or even a letter box.  Yep expect to be hit for extras. Your block is where? well thats another $4,000 because its rated BAL12.5. Fall on your land, better add another $10,000 and pray you dont hit rock.

People have said to us building is expensive but its more expensive when you dont go in with your eyes open to the potential costs and pitfalls.  We have made significant allowances for all of these items for this very reason.

This is going to be both fun and daunting journey.  Some testing times ahead I think and we haven't even committed to anything.

But its just a block

Now that we have a rough budget of what were working with we decide to start looking at other houses to see what the market is doing.  We look at places below, within and slightly over our budget.  Every house has at least 7-10 groups attend. So depressing that we haven't even had that many to date.

As expected the competition is fierce and offers are submitted and accepted within a week well above both the listed price and our budget. And its not even like these houses are anything special either.  Sure some of them have been dressed nicely but some of these places would need another 50k of renovations just to get them up to date.  This same routine happens time and time again. The quality of stock is poor and the prices high. We would also be required to pony up an additional 20k in stamp duty making these run down dumps less affordable.

We had a bright spark moment. There are plenty of volume house builders selling houses from $160k* and if we can get a block cheap enough we could probably get the same deal but with the 5-8 month inconvenience of having to temporarily rent. Theres a lot less in stamp duty as well as its only payable on the land and not the house.  Our focus now changes more to building over buying established.

Its no secret our government and developers like to horde land for their own greedy gain, you have to snap up a block as soon as they become available and even then were looking at sub divided backyards at best.  That doesn't worry us in the slightest. In fact it's our preference.  Backyard blocks can be pretty polarising, you either love or hate them. Sure you don't get to show pony your house to the street but you get the privacy. For most of my working life I have either been living in a unit complex, a street fronted house on a busy thoroughfare or on a back block. No brainer for us. Bastard child back blocks come at a discount.

Time to start looking for land now.

*you wont get the display house for that much. Expect another 100k for that!

Welcome

I know the blog title seems a little morbid and sinister, but this blog is all about our family's upkeep of our Mortgage which by French definition litrally means "death pledge".  A contract til death or full payment.  So dont worry its not some crazy suicide pact!  (sorry emo kids, carry on)

Hopefully this blog is a way to keep us on track to getting our new house and then proceeding to smash down the debt and I hope to be able to share our thoughts, tips, feelings and stresses along the way.

So a little about my family.  My wife and I have 2 small kids (4.5 and 1 years old) and live in a small 2 bedroom unit in the Yarra Ranges of Victoria, Australia. We have been married for over 10 years and were both in our 30's.

My wife is a stay at home mum and I work full time as an IT professional.  My salary is good but we are just a single income family and have been since the kids arrived.

At this stage in life we find ourselves bringing plans to upgrade our house forward due to our neighbors potential to subdivide blocks of land all around us and sell them off to developers. its already started.  We cant blame them, when we bought our unit we knew it was inevitable but we were hoping it was going to be a few more years down the track.  Plus we knew we would need more space for the kids to roam and a place to study when they got older. A move was always on the cards its just coming sooner.

Our stresses are just beginning.....