The week that was - to 28th Sept 2014

Closing out from the mention of the 0.2mm rain day claim from last week's update, we received a response confirming that the day would not be claimed for.  Pretty blunt response, with no explanation as to why they were using invalid excuses... the response basically said they were just relaying what the site supervisor told them to, and that they didn't have time to look in to it so were just crediting it back from the goodness of their hearts...  laughable.

Average week of progress from what we could see.  Almost a full week of sunshine, but the final sections of roofing haven't been tiled.  We were told at the start it would be tiled this week, so not sure what the hold up was. 

There's a small section of exterior boarding in lieu of bricks (structural reasons I think) at the front of the property and that looks like that was finished off.  Also, the aircon seems to have been partially installed in the ceilings and roofing.  Finally, some fascia was installed.

We'll cover our issues with a tree which fell in a storm under a separate post once it's resolved either way in more detail, but just a mention of it now, given how typical the correspondence from Alkira was in terms of representing their highly average customer service levels.  Briefly: a large tree fell in a storm and tore up our newly installed electricity pole.  No damage to the house thankfully.  We were told early on that we wouldn't have to worry as they had insurance.  Then out of the blue we get this email:

[email removed at Alkira Home's request 07/12/14]

 

In summary, we're asked to pay thousands of dollars with no decent explanation, no call to explain and we are asked to only respond from one email address because it's too messy when we respond on each other's behalf and copy each other (I've lost count of how many people at Alkira we've had to liaise with along the way!!!).

We've reviewed our contract and it clearly states that they must have insurance which covers storm damage.  Nothing in there about no cover for existing trees (surprise surprise).  No detail above about why only part of the costs are covered, and no breakdown of the costs.  We've responded noting that from our reading, there's nothing in our contract to suggest we're due to pay them anything.  Let's see how we go....

The week that was - to 21st Sept '14

Not a bad week of progress.  No heads up on what was going to happen but during the week the eaves have been finished off & painted, the particle board on the front spare bedroom has been put up, and the roofing trusses for the final sections of roof on the ground floor have been installed.  Most of the scaffolding has also been removed.

It now looks like only the tiles need to go on before the house can be sealed and the internal work can commence.

Last week we received variation claim for the wet weather which occurred the prior week.  One of the days claimed for experienced just 0.2mm of rain and the claim was filed for 'inclement weather'.  We can't argue with the days either side, but we queried this day, as a single light shower isn't exactly going to prevent people from being able to work safely.  The response we received was as follows:

'Because the roof has to be bone dry before we can complete the ridging wether it be 0.2mm or 200mm of rain.'

That was the extent of the response.  So the ridging on the roof can't be done with any dampness whatsoever.... I can say whether or not that's valid as I'm not a builder but here's the big issue.... the ridging was completed when we stopped by the house the previous morning!!! we have the pictures which we sent to each other to prove it....  

Anyway, I queried this on Wednesday and we're yet to receive a response.  hmmmmm.  We're yet to ask why there was nothing else they could do on the day instead of the ridging also....

Below are a few pics.

 

Eaves and stuff

We stopped by the house a little earlier to see if the eaves had been finished yet. Great to see they're done!

This prompted us to ask ourselves if our expectations on communication have been unreasonable. After all we are paying for a fixed price and fixed term contract. there's nothing requiring Alkira to finish the build any sooner than the contract end date. And I'm sure the price is a lot lower than a custom build because they don't hire people to frequently contact clients. 

The flip side in our mind is that i) through the sales process we were told that the project manager would 'hold our hands'; and that ii) this is the largest purchase we've made in our lives. Surely we can expect service that's a little better than that offered when you go to a high street retail store?!

Come on Alkira, step up and keep us posted on progress. It's a 2 minute email or phone call once or twice a week. 

The week that was - to 14th Sept '14

Quick bit of background on site manager issues we've faced:  the main site manager has gone on holiday for 5 weeks.  His cover has gone off sick, so we're left with the overall area manager who has a huge amount of builds to cover.  We're assured he's great but things certainly seem to have slowed down. 

Not much progress in the last week unfortunately. It's been wet here recently but this week was nice and dry so we were hoping for some progress.  Here's how the week unfolded:

• dropped an email to the construction office on Monday noting the weather forecast was good and asking what was going to happen
• response received from construction office confirming that scaffolding would come down, bricks would be cleaned and eaves completed this week
• Visited the property each day in the week and didn't see much happen (never saw someone on site). 
• Queried with the construction office on Thursday.  Received a response right away - assured the bricks had been cleaned, scaffolding 'adjusted' (even though original note advised it was being removed), and eaves person booked in for Friday.
• Turned up late on Friday and the bricks looked nice and clean.  However, nothing had happened to the eaves.... hmmmm..... another email beckons

We'll get some pics of the clean bricks and completed eaves next time we stop by.

General tips

We'll do this as a running list which we'll add to as things come to mind.  They should help broadly with most project builds:

• Confirm everything in writing, and get an early understanding on what they'll do for you if they get things wrong.  That's everything you say during each stage.  It includes confirmation of responses to your questions.  It'll be a right pain early on but it's important.  Confirming something in writing won't necessarily get you a good outcome, but it will stop any passing of the buck and at least give you negotiating leverage. 
• A great example is that we had confirmed in writing that our build time was 36 weeks.  Fast forward to final signing of contracts and we're advised the duration is 45 weeks.  The extra 9 weeks was justified our Alkira's part by the fact that we were building an Elyse 15 (larger two story home) and that we'd made a few variations to their standard build.  We confirmed the 36 weeks in writing after selection of the Elyse 15, so a 9 week addition to timing guidance was their mistake.  Whilst we had this in writing, when you're already deep both financially and from a time perspective in to a process, they know they have you over a barrel...  we complained several times but they refused to either change the contracted duration, or compensate us financially.  Bear in mind that the 9 week period is 9 weeks for which we'll need to pay for rental accommodation and the mortgage on the new build.
• Think about trees.  Removing large established trees is a nightmare.  Ensure that you have permission or will be able to remove trees early on, especially if you're going through the CDC approval route.  Alkira didn't explain to us that even if you have CDC approval, you cannot under that approval remove established large trees which are in the way.  Just because a tree is within your property footprint, this doesn't mean you can remove it.  You need to meet your local authorities' rules for removal which are often very strict.
• Add 50% to the base cost if you want an estimate of final build cost.  This is of course only if you want a fairly good quality finished home which is ready to move in to.  Prices quickly increase from the base 'all-included' prices.  Key drivers of our increases included i) Alkira's special offer upgrade package ($17k), ii) rock and tree removal costs ($25k), iii) statutory variations - water tanks etc ($18k), iv) extra dining room area ($23k), v) cornerless alfresco doors ($13k), vi) fireplace ($15k), vii) insulation upgrades ($6k), viii) flooring upgrades ($25k), ix) staircase upgrades ($5k), x) aircon and general electrical upgrades ($15k)
• Beware hidden costs.  Even if you're assured that there are no hidden costs, you might find there are some which pop up along the journey.  Ours included the following (which Alkira of course refused to pay even though they gave assurances that there were no hidden costs):
• $1k for reconnecting our gas supply after it was disconnected.  This was due to our property being a knock down and rebuild (something alkira say they specialise in, so unsure why they couldn't warn us of this cost or build it in to the contract)
• rock removal - seems crazy expensive to remove rock.  we added in a large provisional allowance for rock removal and alkira even tried to get us to reduce it a little as they thought it would be too much. Turns out it wasn't enough which resulted in increased costs
• anything to do with removing trees.  Also, be clear on what tree removal means... we paid someone to remove trees, only to find out the stumps which were left had to be 'ground out' at an extra cost before building could commence also.... and again this is something alkira failed to tell us about
• demolition costs aren't part of the contract prices usually
• driveways, and anything at all to do with gardens, deckings etc aren't in the contract price typically
• Add backs.  You'll receive 'allowances' for various items within your home.  They all make up part of the overall price and you'll struggle to get details out of the builders (or at least we did) but rest assured that the overall price you're paying was pulled out of thin air.  For example, our 'allowance' for carpets amounted to around $4k.  We selected better quality carpets at a cost of around $9k upstairs and we opted for wooden flooring downstairs.  Our tender came back originally without any credit for the flooring allowance of $4k included in the contract.  It was only after we queried a credit or contribution towards our flooring costs that the $4k credit was added back.  This happens many times over so query every upgrade variation you put through.
• Site Access.  This kinda makes sense but is at odds with what you always see on the TV shows about new home builds and of course is never explained to you during the sales process.... the contract states that you cannot access the site during the entire build process without the express consent of the site supervisor, and without him being there to accompany you.  From a safety perspective this makes sense.  However, we'd have thought if there are workmen on site, one of them could accompany you to show you around quickly if there's no material construction ongoing at the time.  The gap between perception and reality of the excitement of building a new home is bigger than we thought.  Luckily we can take some good pics from our property boundaries!
• Visualise 3D plans.  The reason you have to visualise them is that you won't get any.  Bizarre as it is that in our age of technology and decades after 3D imaging was commercialised, and of course considering the amount of $$$ you're spending, you won't get anything more than exterior view 2D plans.  Therefore, you really need to think about how your selections will look.  And don't expect much by way of advice on how things will look.  An example of an issue we came across was our selection of stacker doors out to our alfresco area.  Our alfresco area is basically one quarter of a large square lounge area.  The default plan was to have a column support, with sliding or bi-fold doors meeting up to the column.  Our issue is that we didn't want a big column in the middle of the room as we wanted it as open as possible.  We therefore paid extra for a beam, so that we didn't need a supporting column.  Our sliding stacker doors to the alfresco therefore meet, creating a great way of bringing the outdoors inside.  The issue is the height of the stacker doors.  Due to the size of the beam, the overall height of the stacker doors was substantially lowered, which creates the opposite effect we wanted.... i.e. it closes up the room instead of opening it as much as we'd liked. 

Positives

I wanted to jot down a few notes on what has been done well to date... given I've mainly focused on our frustrations in the posts from yesterday:

• flexibility - given we're dealing with a project home builder whose prices (whilst not cheap by project builder standards) are a lot less than custom designs, we were able to play around with the floor plan quite a bit.  They even offered a bunch of pre-designed variations for our home choice.  Big things we did included adding a dining room at the back of the property, having our alfresco sliding doors meet at the corner with no pillar in the way (at some cost of course), flipped the master bedroom to the rear of the property, and added a small office upstairs
• CDC approval process was all handled very well.  We didn't have to do much at all and it all went through reasonably quickly and without many issues
• Fallen tree disaster.... early in our build process, an enormous tree at the front of our property fell over in a storm.  It wasn't clear whether it was on our property or our neighbours' property and also what the implications of the fallen tree would be.  It knocked over our new electricity pole, and ended up in the SES and energy companies having to clear it all overnight.  Whilst not yet fully resolved, (and whilst we received a few odd emails early on which claimed we'd arranged for removal of the tree without their permission) they've taken care of the issues so far and assured us that insurance companies would cover all costs.  Our involvement has been limited which is good.
• Response times - whilst correspondence hasn't been that satisfactory and at times quite unclear, they are always quick to respond to emails.  We've rarely had to chase responses from all departments we've dealt with
• Choices - with the exception of the carpeting choices which were to be frank, rubbish, the choices available within their standard range have been extensive and of a good quality.  Tiling choices were excellent, and despite extensively upgrading our kitchen choices (including large island benches with caesarstone tops, quality taps, integrated Euroean appliances etc) the extra cost wasn't too bad

That's all that immediately comes to mind.  More to come (we hope) as the build progresses!

A few pictures of progress to date

 

Overview of our issues to date

As we sit back a little over a year in to the process, the biggest things that disappoint us right now are noted below.  It's too early to say what the quality of the actual home is like, although to date we like what we see and the general workmanship seems good to the untrained eye. 

We want to frame our issues first though... from the outset we have been extremely clear that two things are important to us....

1. no hidden costs and be realistic and conservative on hidden costs
2. be conservative and realistic on timing estimates provided to us

We also made it clear that we wanted high quality finishes throughout the home.

I'm not exaggerating when I say we've probably reiterated this message to various staff members dozens of times.  We've not asked for much more.  Look out for the 'BEWARES' throughout our blog... things we wished we knew before we started and things they don't tell you because it's not in their interest to secure a sale.

Missed timings
Over and over and over again deadlines that we were advised of have been missed.  And it's cost us a small fortune (which was the exact reason we asked for realistic deadlines... to help forecast and manage costs).

We have responded to all queries in quick order through the process and have made very few material changes during the tender process (none since contracts were signed).

Hopefully this will give you a feel for the key contributors to the delays and a flavour of some of the drivers:

Overall build time guidance
What they said
The salesman we spoke to originally in July / August 2013 told us that if we signed tenders right away (which we did) our build would kick off by December 2013, and it would take 36 weeks to build.

What happened
Building did not start until 19th May 2014.... a delay from guidance provided of 5 months!!!  We also found out very late in the process that the 36 week process was actually 45 weeks because we chose a larger home.... even though we had already chosen the Elyse 15 when discussing timing with the saleman.  BEWARE:  ensure specific timing for your desired home is provided and not 'base/entry level' timing.  Key contributing factors included:

1. 3 week delay in returning our first tender (took 6 weeks in total)
2. numerous mistakes (on alkira's part) were found throughout the finalisation of tender process we added several weeks (mistakes included simple things like the costing not adding up correctly)
3. The home option gallery (where you go to pick internal and external features such as bricks, kitchens) being fully booked with no available slots  - this delayed the process by 3 weeks beyond guidance.  BEWARE:  they only open Mon-Fri (and they don't tell you that during the sales process of course)
4. Christmas shutdown.  BEWARE: the entire industry shuts for 5 weeks solid over Dec/Jan period.  Whilst we've only been in Australia for 3 years, we're aware that many people take vacations over this period.  However, we felt it pretty awful that no one from the sales team told us that their offices shut down for 3-4 weeks over this period, along with further shutdowns across many of their key contractors / selection outlets which adds to delays
5. Restricted from booking our second home options gallery appointment until the second part of the contract had been signed.  Again, no one told us this from the outset and it added another few weeks of delays as we couldn't book in advance and there was a long lead time on bookings
6. Kitchen drawings taking almost 3 months to be completed (yes 3 months!).  We made the selections on 17th December, and received drawings on 11th March.
7. The general process and information flow was very poor.  We could have been told information about the various suppliers that you're required to use ahead of time, but for an unknown reason we were not told the names of suppliers and therefore couldn't pre-arrange appointments to view the choices available to us and do some research.  This caused not only delays as we had to wait for available appointments, but also an unenjoyable selection process as everything ended up being a bit rushed.  BEWARE: Ask for the names of each of the companies you're forced to use for your selections.  This should include general selections, brick companies, tile companies, flooring/carpet companies, and kitchen companies.

BEWARE:  Another thing they don't tell you upfront.... your contract will be fixed price and fixed time, but there is zero time built in to the contract for wet weather / supplier delays etc etc.  This means that whilst you might be contracted to say, a 45 week build, the builder can file for variation claims which allow them to extend the build time without penalty, if, for example there are a few mm of rain on any given day.

Overall cost guidance
What they said
Having (time and again) requested conservative estimates for all costings, we were assured there would be no hidden costs through the process and that conservative estimates would be included for 'provisional allowances' (these are costs which cannot be precisely tidied down up front such as removal of underground rock from your site).

What happened
I'm not exaggerating when I say that there was not one single instance when an actual cost ended up coming in lower than the quote or cost estimate provided.  And there were plenty when the estimates blew out considerably... below are some examples:

1. we selected a fireplace for our home.  We requested an exact replica of a fireplace in their main Kellyville Elyse 15 showhome... i.e. the fireplace next door to their sales office.  The sales rep included a provisional allowance for $8,500 and assured us when we signed preliminary contracts that this would be sufficient.  The final cost was $15,000!!!!
2. Advised that we wouldn't require a provisional allowance for flooring.  Whilst generally, the selections available for most options are quite extensive (including tiles, bricks) the flooring selections are very limited and very low quality.  Our final flooring costs added $21,000 to the bill.
3. Despite having an initial survey conducted by Alkira's team early on in the process, we found very late on that significant rock excavation would be required.  This added $15,000 to the bill.  We were assured that the initial survey was thorough and would pick up everything required...
4. Despite knowing exactly where we were building, we were not told of the need to add to very large underground water tanks to the bill until late on in the process at a cost of $11,600
5. I'm not kidding when we say there were dozens of other pricing mistakes, exclusively not in our favour.... not one single time did we find an error in our favour.  All I can say is BEWARE!! Review everything very carefully.

In light of the timing guidance provided, we asked our tenants to leave the property and ended up missing out on 3 months of potential rent ($6k) due to the delays caused by Alkira. 

You can see that we're not talking about immaterial issues.... all up the experience from initial tender to commencement of building was shocking.  Probably the worst thing of all is that very early on they get you financially committed.  When we raised all of our issues through the process they continually provided assurances, but did nothing about the actual financial impacts we suffered. 

So summing everything up - $60k in costs greater than we anticipated due possibly to poor sales processes / honesty / transparency (we're not sure which, maybe a bit of everything) about what we should expect.  And if you add in the additional rent we'll now have to pay in excess of what we budgeted based on their indicated timings you're looking at the initial 5 month (21 weeks) delays, then add 9 weeks additional build time plus time variance claims (again nothing mentioned about this from early sales processes) of 5 weeks for Christmas shutdown and probably 2 weeks for rain delays. That's 37 weeks extra rent and we're based in the Northern beaches.  Call it $30k of rent.

So $90k all up in additional costs over what we budgeted for based on the information advised to us through the sales process.... after we said we wanted them to be realistic and conservative.


 

Background beind where we stand today

We're currently reasonably advanced in to the building process with Alkira Homes.  We've kept detailed notes on our full process up until this point with the intention at some point to get it all down in a blog.... unfortunately, getting it started took longer than we hoped... anyway, better late than never! 

The intention of this blog is to set out our thoughts and expectations about building a home with a project builder, and provide information on what actually happened in the hope it'll help people looking to either build a new home with a project build, or more specifically, build with Alkira homes.

We started thinking about building a new home in Sydney's Northern Beaches area back in June 2013.  In August 2013 we identified some land (an old knock down house in Seaforth) and had by this stage done a lot of researching on the various project builders by visiting on several occasions the Kellyville display village, speaking with various builders and searching the internet.

We chose Alkira Homes for a variety of reasons, but mainly it was down to:

1. the floorplan layout of their Elyse 15 home which suited our land dimensions and key design aspects very well
2. the flexibility offered by Alkira on changing certain features of the floorplan
3. the indications provided on the time it would take to build the home
4. price
5. strength of online reviews and comments on forums

We selected the Elyse 15 and on 24th August 2013 we paid $1,000 to kick off the formal tender process.