The Pool Saga

So we decided that a swimming pool was part of the deal when we moved to Texas. It is an extravagent purchase but with the climate here it's very nice to have. So once we got the offer accepted we started looking for a pool builder.

We looked at the pool thing as a pretty simple exercise - we have a total house budget that we know we are comfortable with. So we buy a house at less than that and then sign up for a pool for the difference and we're happy. Not so fast.

Since the recent credit crunch, lenders have got a lot more picky about all aspects of lending. So now there are rules and limits. There seem to be two elements to the rules:

1. Many lenders have limits on the proportion of the loan that can be used to fund the pool (regardless of appraisal value - even if the pool + house are easily less than the appraised value, they still won't lend more than their percentage rules).
2. All lenders now worry about cost overruns that will mean the pool doesn't get built (a fair concern considering they do take the added value of the pool into account when they appraise). To mitigate that risk, they require the borrower to put more money into escrow.

So... some lenders only want 1.2x the pool contract in escrow (so we have to chip in 20% of the contract value for cost overruns) but will only lend up to 10% of the house value. Others will lend up to 25% of the house value but they want a full 50% of contract value held in escrow. When you consider pools cost tens of thousands, we're talking about significant funds being tied up for months. Others are somewhere in between.

Hence we ended up with a strict budget in order to satisfy our lender.

We called around to 5 or 6 builders and sent them our plot survey or met with them. They all went away and put together designs based on our 'must haves' and 'nice to haves':

Must have:
- Ability to swim decent 'lengths'
- Spa
- Some kind of water feature to provide white noise (as the house backs onto a local road)
- Decent amount of decking

Nice to have:
- Pebble interior (rather than plaster)
- LED lights

We waited and waited and finally designs starting coming in... not good.

We couldn't afford our nice to haves and we couldn't even get some of our must haves, most notably the sizes in our price range were smaller than we hoped for.

Most builders were a bit cagey about the prices - rather than working with us to understand what was driving the costs, they just wanted to decide for themselves how to meet the price limit... this was frustrating as they'd forget about one 'must have' in order to satisfy another ("sure you can have a 35 foot pool but you can't have a raised spa").

Finally we found a builder who actually sat down and explained the pricing. He showed how increasing the pool length impacted pricing (more tile, more digging, more concrete, more plumbing) and how other things had less impact.

We worked with him to push the design in the right direction... we ended up with all our 'must haves' and costed options to add our 'nice to haves' before build out is complete.

We were happy... We signed the contract...

The pool builder resigned from the company... arg!

Cue panic.

We met the owner of the company today - we like him, he is honoring the contract (including the discount we negotiated...) We are happy again.

I'll post details later...