There are currently five new houses being built in my neighborhood, and my wife and I are celebrating the tenth anniversary of the completion of our “new house.” Thus I find myself reminiscing about some of the experiences we had in undertaking the task of designing and building our home.
When friends and acquaintances find out you are planning to build a new home, they hasten to offer condolences and advice. Several were quick to say we should buy a large bottle of aspirin. Others said we would probably find ourselves in the divorce court. The advice from one often contradicted that from another. Some had interesting stories about their own building experiences.
The most common reaction is, “It’s a good thing you are retired, because you will have a full-time job making choices and visiting the building site daily.” The assumption seemed to be that every lighting fixture and plumbing detail would require a personal review.
In contrast, one friend suggested that we hire a good contractor, give him a sketch on the back of a used envelope, and leave town for six months. That is what she and her husband did, and they were very happy with the results.
Unfortunately, that was over 30 years ago, and it is no longer possible to escape so lightly. They had made a handshake deal with the builder and then visited a local bank to make arrangements for him to present invoices for periodic draws as the work was completed in stages. The two of them left for Spain, where they were spending a sabbatical leave doing research.
Comparing that story to our experience illustrates how much more complicated homebuilding has become over recent decades. Instead of a handshake deal, we signed a lengthy and very detailed contract, plus several pages of blueprints, as well as initialing every page.
Another aspect of the current procedure involves a legal instrument called a “mechanic’s lien.” Having purchased our lot, we gave the builder a lien against the property equal to the cost of the house. As stages of the project were completed (such as the foundation), we had to make a significant payment and receive a release of a portion of the lien.
This makes for another striking contrast with the way it could be done 60 years ago, according to an older friend who built a house in the ’50s. At that time he was single, and had grown tired of living in the Grayson Hotel.
Since he owned some acreage in the country, he talked to a banker about getting a loan to build a modest home on it. The response was, “Here is a checkbook for a new account. Whenever you write a check on this account, that amount will be added to your loan balance.”
Within a matter of months, he had a new home and the bank had a mortgage, which it held until the loan was paid off. Contrary to today’s financial market system, there was no thought of selling his mortgage to a hedge fund, which could then bundle it with others and resell it to some international investment fund that would eventually bankrupt a municipal government in Norway when it went bust.
The process of building a home and financing it has certainly changed. But one thing remains constant — the desire of everyone else to give you advice.
Jerry Lincecum is a retired Austin College professor who now teaches older adults to write their autobiographies and family histories. Email him at firstname.lastname@example.org.