My first development

Hi property gurus

So this is not strictly a development as I bought an old house with big(ish) block of land in Morley WA intending to live there for a while before I figure out what to do. But soon realised house is not liveable so now decided to expedite my plans to subidivide into two lots, one behind the other. And then move into the front house and sell or rent out the house at the back.

The area is dual coded R20/25 but I rang the council and they said there are no special conditions to go with higher code apart from the usual stuff. Area: 778 sqm. Front: 19 m.

I have been reading lot of posts and i've found @Westminster to be really great and helpful.

So here is my first question.

I have found an architect to do the design for duplexes. He is going to design the houses and then tender out to a number of builders and then I am meant to go with the lowest bidder.
I didn't know before, but when I signed agreement with the architect he told me that he gets some commission back from the builders. Is this normal?

I am now concerned that how do I ensure the architect works in my best interest in trying to get a good price for me, when he is getting commission from builders? is it standard practice? Should I get an independent estimate for construction cost of the designs he prepares?

Thanks everyone.

 

It would be unusual for an Architect to do that but not unusual for a designer at a building broker.

It's not an uncommon process and it's one that I do use sometimes.

How much did he charge to do the designs? and how much to do the tender?

If you haven't paid anything yet then you can always end the agreement if you don't feel comfortable with it but it's not an unusual arrangement. You can ensure that you are getting a good price by also getting quotes on it to compare prices.

During the shortlist process with the tendered builders you will most likely get to meet them and ask them to be more competitive and it really is quite a transparent process if the tender panel of builders is large enough.

 

Assuming you're demo-ing the existing house, any reason you're going for a battleaxe configuration instead of a side by side?

 

I would do some DD on the lowest bidder and make sure their build quality matches with your expectations. I went through a process to select a builder in 2015 and found 3 out of 5 of my shortlisted builders would not produce the quality of build I was seeking.

I don't know if it is common but it does not sound unreasonable.

Finance brokers get paid by banks to find loans. Some act in their own interests and some act in the best interest of their customer.

It would probably be a good idea to do this. That way you can verify the figures quoted by the builders. Just be careful of inclusions, exclusions and levels of spec. For example, if builder A is using a laminex bench in the kitchen and builder B is using essastone, the quotes are not comparable.

 

The lowest bidder in my experience usually ends up costing you more or a lot more later on. Be careful. Some tenders will come in light with many PS to appear more competitive and in reality they could end up a lot more. Also very important to compare apples with apples. Just be careful.

Also I see a potential conflict of interest with the commission kickback unless the architect has your absolute best interest first.

 

BTW I agree with @thatbum with a 19m frontage I think I would go side by side unless the R25 part of it stipulates only one crossover/common driveway

With a tender process you shouldn't HAVE to go with the lowest and there should be a common specification given to all tender applicants so their quotes can be compared.

When you have your shortlist you should:
- interview them,
- see their work,
- have a credit check done on the company,
- talk to references (preferably find your own references of their work),
- seek their guidance on if there is anything different they would do to the design - builders can sometimes point out some good ideas to make it more cost effective
- see if they have a package deal with any suppliers which would be more effective than what was in the specification
- see if they can be more competitive on their price

 

Tell the Architect you want the kickback subtracted from his fee

 

We did think of that, but I don't like the look of a long narrow house. With battleaxe, we will get good nice square house at the front. The back house will either sell or become a rental. Depends on the market when they are ready. In either case it shouldn't be much difference.

I called the council and they did recommend one driveway, but that is because there are two trees in the front, but not a condition of R25. The architect said we will try to get the tree transplanted or removed. I really like two independent drive ways for battleaxe. And there are few battleaxe duplexes built in the same street with R25 zoning already.

Very good advice WM. I will definitely be looking at previous work of the builders. Since it is a tender, so all the builders will be bidding on the same spec and so their quotes can be compared. This is exactly why I went to the design and tender instead of going straight to builders.

Regarding the architect, I think he is charging me very reasonable price, about 2k for two houses design and tender. And so far I am happy with his work, we have done quite a few revisions and he is happy to discuss ideas and modify the plans accordingly.

 

Only 2k? 20k?

 

Haha. No just 2k. But it doesn't include the survey or the surveyor costs. Just design and tender. Seems like I got a good deal then?

 

If that includes Concept plans, DA Plans and Working drawings then... something seems wrong..2k would be the cheapest in history I reckon

 

Seems cheap - even excluding engineers, framing, detail survey...id budget at least $7k for a set of planning and working drawings and coordination with council, certifier and other consultants

Two questions though

(I) Are you allowed to nominate your own choice of builder to the tender panel?

(II) What size dwelling and what specification are you asking the architect to deliver? Builders and architects love big, big houses with lots of bling....developers should love appropriately sized houses with the right spec level for the market!

If you've given the designer free reign, they'll likely come back with something that maxes out FSR / Setbacks - bigger build cost, bigger commission but perhaps an overcapitalisation of the site!

 

7k, hmm....that rings a bell. Seems like he is getting the 5k from builders. Becuase the agreement I signed with architect does say if I walk out with the plans without proceeding with building I will be liable for extra cost, and funnily that extra cost works out to be about 5k.

(I) I haven't checked about this but if I am not satisfied that I am getting a good price I will contact other builders myself and if I get a cheaper price, will use that to get better deal from the architect's range of builders
(II) build area for front house is roughly 230 sq and the back house is bit less. Architect is being very money cautious and trying to keep the overall build price down. I actually have made few amendments which are resulting in more build price, i.e. bigger minor bedrooms etc. But these should result in good return.

 

So here is the first challenge. As I am still waiting for the survey to be done next week, so all the distances are approximate.
What do you guys think my chances are to get the new crossover approved? With the offending tree remaining where it is? or what are the chances council will agree to move the tree? Initial quick phone call suggest that council wants me to use the single existing crossover an put the garage of the front unit on the side, which I am not very keen.
After the survey result comes in, the architect will be going to see the council planning guy, but I just want to see what you experts think? It is bayswater council in Perth.

My_first_development by zac101 posted 22nd Jan, 2017 at 9:59 AM

 

Sooo you want 2 cross overs?
If you have 2 crossovers then how is the leg to the rear block common property??? It would then be a battleaxe and you'd need 425sqm for the rear block including the leg.
Having said that you can do a 3m crossover and it would be 500mm off the boundary so then it's 1500mm to the tree trunk so it might be ok.

There actually is quite a lot of difference in price for a rear house and although you don't like the look of a narrow house this is an investment decision and it's not usually about what you like but what is most profitable and what the market wants. I honestly believe that front/back duplexes should only be done if you are retaining the existing house. If you are demolishing and building 2 then go for side by side

 

Completely agree with this. Side by side is the proper investment decision 99% of the time.

 

Thanks WM.

Yes that would be case if they were true battleaxe, i.e. there was no common property. If you are going front and back with the access leg as common property then the condition of access leg being no more than 20% does not apply

Very good advice. My only problem with side by side is that it is difficult to find a plan which has the theater and living area towards the front and all the bedrooms at the back.
I did find something like this on the net but this was originally ground floor of a double storey plan, which I tried to turn into single storey what do you think of this? If I go side by side I will have only 9.65 meters frontage.

 

Why do you need to have this? The front is generally a bit shorter on space because of the double garage that inevitably needs to be there (thanks Perth).

Yes but there's still plenty of design options for that width of lot. More importantly, they are much better accepted by the market than a front/back house configuration.

 

The above picture didn't upload properly so doing it again.

If I were to go side by side, how would that work with existing tree, would there be more chances that council will agree to move / remove the tree on the right hand side?

Narrow_lot_3 by zac101 posted 22nd Jan, 2017 at 11:24 AM

 

Unfortunately you need to have a habitable room overlooking the street for passive surveilance so even thought it makes more sense to not cram a bedroom or study at the front you need to.

I don't think it gives you any greater chance of having 2 crossovers approved with the trees. Note that you will seek permission to move the tree and it will be at your cost to take it out and move or replace it - the council won't pay for it. You might have another option to run a driveway/crossover between the trees though so it might be more successful to get it passed.