Determining the project concept

Conceptualizing actually starts as you start dreaming about your new home. The project concept phase in the book Plan Your Dream Home is focused on helping you to formalize your needs and accommodation requirements, including the estimated cost and time schedule of the project with sufficient information to provide to the agent and/or consultants as their brief.

To conceptualize the home that will be affordable to you, it is important to go through the detailed steps of preparing the project concept as detailed in this course and the book.

When considering your family needs, I want to encourage you to finally concentrate only on the needs, without being distracted by the estimated budget or specific accommodation requirements. This helps to address the real needs as a starting point and then address the how-to do’s afterwards.

Estimate your available budget as part of the project concept

However, as financing is mostly a lengthy process, it is recommended that, just to get the ball rolling, you start the budget estimating process right away. But, please don’t let it influence your needs analysis. It is recommended that you at this early stage, along with renowned bond experts take note of the criteria as laid down by the banks and your local credit regulator and determine your own level of affordability in terms of the loan amount that you can possibly qualify for. This loan amount that you qualify for plus the cash that you have available, can then be regarded as the estimated budget for the project.

Please be aware that the loan-to-value ratio offered by a bank will determine the minimum amount of cash that you will require to buy or build with. This ratio refers to the percentage of the value of the property, as valuated by the bank, that they are prepared to lend to you. The remaining portion is referred to as your cash contribution.

With your estimated budget in mind and knowing what the going building cost rate and land costs are or knowing the going cost rate of existing homes, it then becomes quite easy to determine the size of house you can afford to build or buy in the area of your choice. With this information you will also be able to make your own comparison and choice between the current buyer’s market and builder’s market, which will help you decide whether you should buy or build.

If you are planning to buy land to build on, it is also advisable to at this stage start determining which of the banks in your region will be prepared to consider the conditional preapproval of the building loan along with the initial property loan and then do the final building loan approval on availability of approved building plans and a builder’s quotation.

Now that you got the financing ball rolling, let us first apply our minds to your dream home needs and thereafter the accommodation requirements without being distracted by the budget.

Your family needs regarding a new home as part of the project concept

Here it would be fair to afford every member of the family an opportunity to state their needs and dreams for a new home and table it in a summarized form per member. This is an ideal opportunity to create meaningful communication between family members and will certainly contribute towards an enjoyable building or buying process. If you are single or newly wed, it will be a good idea to also anticipate your future circumstances in this process. It is important not to allocate specific areas or accommodation requirements to the needs at this point in time.

You would be amazed what comes out of this. With our second home, this process really made the difference between a standard and a stunning home for every member of the family. It also created a sense of ownership in the whole project. It is recommended that every family member spend good time thinking about and listing his/her own needs by taking into consideration the things they normally keep themselves busy with and that are of importance to them.

The book provides detailed guidance regarding the items to address in a table form, which can be printed for every member to complete. When completing your needs, it pays to think widely, especially when it comes to activities and family occasions, as these could eventually influence your decision where to live.

We found that after each of us listed our own needs, a family workshop around a flipchart was the best way for us to discuss and coordinate our needs in no specific order, on a three-column flipchart table with the headings – Needs, Commonality and Accommodation Requirements. This also afforded us an opportunity to mutually decide which of our individual needs could be joined into common needs.

But, it’s up to you to do it in a way that is the best for your family and circumstances. Make it as relaxed and inclusive as possible and allow every one to come up with innovative ideas, both regarding the needs itself and then on how to best facilitate the process.

After everyone has listed their needs, summarize all the needs and after tabling your needs on the flipchart, consider each need at a time to see if it has any form of commonality with any of the other needs and if so, write the reference number/s of the other need/s in a communality column. After this exercise it will soon transpire which needs can be combined into one or grouped together.

Accommodation requirements as part of the project concept

After finalizing and listing the agreed individual and joint family needs on a flipchart you can informally talk about and identify accommodation requirements (excluding passages and staircases) that will satisfy each of the needs and write these under a requirements column. When doing this, please exclude passages and staircases as these will not be taken into account at this stage.

You then need to prepare an estimated cost in respect of the accommodation requirements as identified. Once you’ve completed the informal requirement listing, you can then analyze these under the headings:

• space description;
• space internal wall to wall dimensions (thus including cupboards, etc.); and
• space floor area as calculated from the dimensions.

A spreadsheet is quit handy for this as it becomes an iterative process throughout the planning phases. At this stage it is still important not to let affordability influence your requirement decisions in any way, please.

Typical requirements that can be considered are indicated in the estimated accommodation requirements and costs table, given in the book. This table serves as a checklist to tabulate and calculate the estimated accommodation requirements and costs. Special internal and external facilities should also be considered. Not to worry, I have also repeated the list in the requirements checklist slide in the course for you. Having this on a spreadsheet is rather handy when you start scaling up and down to accommodate your budget.

When deciding on space dimensions, you must be careful not to over or under estimate room sizes. A good idea is to measure the rooms of existing places and then scale these up or down according to your liking to satisfy the specific needs. Over-estimating will unnecessary chase up the building cost and un-affordability, but on the other hand under-estimating will have a negative effect on the value of your house.

Estimated cost as part of the project concept

For the purposes of deriving a concept cost estimate, it is not required to be based on accurate construction costing at this stage.

It is during this time that you can rather visit building and related exhibitions investigating various solutions and new trends and, if you want to get a basic feel of the cost rates, you can informally start consulting bank websites, bond experts, local contractors, agents, architects, quantity surveyors and also nurseries regarding garden areas. When obtaining rates, you should always ensure that any applicable sales taxes are actually included.

Another handy tool to have is the inspection schedule that the building inspectors of banks use when they need to assess the progress payments on building loans – it gives you a very good idea how they value the building and divide the cost into the various trades and building stages. It is certainly worthwhile obtaining these. Also have a look at the bank cost allocation chart example, which chart can also serve as a handy costing tool for your project.

Just knowing your needs can make the difference in a difficult choice between two beautiful properties.

The project concept document

After having completed the above, you have actually finalized an affordable concept before starting to incur major land and design costs.

This project concept lays the foundation for land or house selection, identifying an appropriate estate agent and architect as well as the drafting of architectural plans. For this purpose, it is wise to summarize the concept in a project concept document covering the:

• Estimated maximum budget;
• Agreed family needs;
• Phased accommodation & special requirements;
• Phased estimated costs;
• Property requirements & costs; and
• The expected time line.

The concept document will form the basis of your request for proposal to consultants and consultant appointments.

Start turning your dream into reality.