Hello forum,
I’m new here and would like to start with a question. My wife and I have been looking for a house for some time now. We have found a house that fits our location preferences very well. The living area (200m² (2,152 sq ft)) and the plot size (1100m² (11,840 sq ft)) are also appealing to us. The only drawback: in my opinion, the house needs a complete renovation. The roof needs work (possibly just replacing the tiles), the exterior walls might need new insulation and rendering (??), and the interior layout needs to be redesigned because the current arrangement requires walking through one room to get to another, which I find inconvenient. Additionally, I think the electrical system must be updated, and of course, the painting work will need to be done at the end. The windows seem to be in good condition.
I know it’s difficult to give a price estimate now. It obviously depends on whether I choose high-end granite or settle for laminate flooring. Nevertheless, I am interested in your experience, for example, which of the tasks mentioned tend to be the most expensive?
What would you advise? Of course, I first need a cost overview to know whether I can afford the renovation at all. Who should I consult—an architect? I can’t buy the house only to find out later that I can’t afford the renovation. What would be the right approach?
Thanks in advance
I’m new here and would like to start with a question. My wife and I have been looking for a house for some time now. We have found a house that fits our location preferences very well. The living area (200m² (2,152 sq ft)) and the plot size (1100m² (11,840 sq ft)) are also appealing to us. The only drawback: in my opinion, the house needs a complete renovation. The roof needs work (possibly just replacing the tiles), the exterior walls might need new insulation and rendering (??), and the interior layout needs to be redesigned because the current arrangement requires walking through one room to get to another, which I find inconvenient. Additionally, I think the electrical system must be updated, and of course, the painting work will need to be done at the end. The windows seem to be in good condition.
I know it’s difficult to give a price estimate now. It obviously depends on whether I choose high-end granite or settle for laminate flooring. Nevertheless, I am interested in your experience, for example, which of the tasks mentioned tend to be the most expensive?
What would you advise? Of course, I first need a cost overview to know whether I can afford the renovation at all. Who should I consult—an architect? I can’t buy the house only to find out later that I can’t afford the renovation. What would be the right approach?
Thanks in advance
Right, I should have written it separately:
The seller wants: ........................................ €200,000
My cost estimate for renovation ............... €60,000
My cost estimate for remodeling ............... €20,000
Costs for the service phase according to HOAI .. €4,000
------------------------------------------------------
Valuation report .................................... €140,000
Negotiated purchase price ......................... €160,000
Financing ............................................... €244,000
of which 30% KfW 124 loan ............................ €55,000
of which KfW 152 energy-efficient renovation .. €50,000
KfW subsidy for service phase 431 .................. €2,000
of which house bank ................................ €137,000
-----------------------------------------------------
This means the expensive house bank share is now only 56%
Savings on interest: €184,230 - €153,295 = €30,935
Total savings nearly €73,000. Reminder: the capital investment is €2,000
The seller wants: ........................................ €200,000
My cost estimate for renovation ............... €60,000
My cost estimate for remodeling ............... €20,000
Costs for the service phase according to HOAI .. €4,000
------------------------------------------------------
Valuation report .................................... €140,000
Negotiated purchase price ......................... €160,000
Financing ............................................... €244,000
of which 30% KfW 124 loan ............................ €55,000
of which KfW 152 energy-efficient renovation .. €50,000
KfW subsidy for service phase 431 .................. €2,000
of which house bank ................................ €137,000
-----------------------------------------------------
This means the expensive house bank share is now only 56%
Savings on interest: €184,230 - €153,295 = €30,935
Total savings nearly €73,000. Reminder: the capital investment is €2,000
Hello,
to stay on topic:
So, if I have a property appraisal done, I save 73,000 EUR (about 73,000 USD) compared to a pure cost estimate by a professional (it doesn’t necessarily have to be an architect in this case), according to your example!
Carrying out a cost estimate or a property appraisal has nothing to do with financing. The appraisal can at most show me that I might be paying too much for the house. But what if my appraiser determines a value of exactly 200,000 EUR (about 200,000 USD) in your example?
Furthermore, I doubt that a seller would reduce their asking price by 40,000 EUR (about 40,000 USD) just because the buyer presents an appraisal with a market value of 140,000 EUR (about 140,000 USD).
I would only commission a property appraisal if I really had doubts about the purchase price.
Best regards
to stay on topic:
So, if I have a property appraisal done, I save 73,000 EUR (about 73,000 USD) compared to a pure cost estimate by a professional (it doesn’t necessarily have to be an architect in this case), according to your example!
Carrying out a cost estimate or a property appraisal has nothing to do with financing. The appraisal can at most show me that I might be paying too much for the house. But what if my appraiser determines a value of exactly 200,000 EUR (about 200,000 USD) in your example?
Furthermore, I doubt that a seller would reduce their asking price by 40,000 EUR (about 40,000 USD) just because the buyer presents an appraisal with a market value of 140,000 EUR (about 140,000 USD).
I would only commission a property appraisal if I really had doubts about the purchase price.
Best regards
B
Bauexperte16 Feb 2011 10:43Hello,
If I were you, I would be cautious with such statements, as it always depends on the circumstances and negotiation skills. For example, if the seller has been trying to sell the property for a long time (most sellers usually know their property’s condition very well), they might be frustrated by unsuccessful attempts or urgently need the money from the sale.
Parcus will certainly be happy to answer the rest for you.
Kind regards
KKR schrieb:
…also, I doubt that a seller would reduce the asking price by 40,000 EUR just because the buyer presents an appraisal showing a market value of 140,000 EUR.
If I were you, I would be cautious with such statements, as it always depends on the circumstances and negotiation skills. For example, if the seller has been trying to sell the property for a long time (most sellers usually know their property’s condition very well), they might be frustrated by unsuccessful attempts or urgently need the money from the sale.
Parcus will certainly be happy to answer the rest for you.
Kind regards
@KKR
The cost estimate is part of the property valuation report.
See §§ 192 - 199 of the Building Code and the WertV, ImmoWertV 2010, WertR 2006.
Also see the cost approach method, which includes determining the replacement cost – normal construction costs and the index principle – depreciation due to building defects and damage – consideration of other value-influencing factors.
The days when real estate sold like hotcakes are over.
Today, a seller can be fortunate to sell a property within 1-2 years.
A negotiation margin of 15-25% is common nowadays; that is why I used the average value. In addition, the market value today can already include discounts of up to 50%.
Equally important are registered third-party rights, building encumbrances (easements)...
Incidentally, many appraisers are also senior architects.
Why should I have an issue with that? I studied that myself.
The cost estimate is part of the property valuation report.
See §§ 192 - 199 of the Building Code and the WertV, ImmoWertV 2010, WertR 2006.
Also see the cost approach method, which includes determining the replacement cost – normal construction costs and the index principle – depreciation due to building defects and damage – consideration of other value-influencing factors.
The days when real estate sold like hotcakes are over.
Today, a seller can be fortunate to sell a property within 1-2 years.
A negotiation margin of 15-25% is common nowadays; that is why I used the average value. In addition, the market value today can already include discounts of up to 50%.
Equally important are registered third-party rights, building encumbrances (easements)...
Incidentally, many appraisers are also senior architects.
Why should I have an issue with that? I studied that myself.