ᐅ Searching for a Plot in Bonn. Questions About Purchasing Land.

Hello forum members,

After searching for a suitable construction method and project management for some time and having spoken with several companies, I find myself more uncertain than at the beginning!

I want to build a house near Bonn for my son. To do this, I have been looking for suitable plots through various real estate portals. Usually, the attractive plots are offered by developers. Here is my first question: some providers said that the advertised plot could only be purchased together with building a house from their company and requested that I sign a contract first. Others want at least an initial consultation before sharing detailed information about the plot. Is this approach even legally permissible? And if I sign such a contract, can I withdraw from it free of charge if I decide I don’t want the offered plots? (I am asking from a legal perspective, not from the companies’ point of view, where it is probably not possible or only with restrictions.)

The next topic that puzzled me a lot is the pricing structure. When I look at the offers I have, the price per square meter of living space varies from €1340.00 to nearly €1700.00 per m² (approximately $145 to $185 per sq ft). Depending on the provider, slightly more or fewer services are included, but not significantly. For example, with one provider, a foundation survey is included, and they use supposedly better materials. I read somewhere online that building a house in solid construction (standard pitched roof without basement, with mid-range fittings, 120–140 m² (1300–1500 sq ft) living space) should not cost a company more than €980.00 per m² (about $105 per sq ft) excluding VAT from equity capital. Accordingly, the “gross margin” for the companies would be between approximately €150.00 and €500.00 per m² (about $14 to $46 per sq ft). How can this be explained?

One provider explained to us that the basic house itself is not expensive, but most clients’ customization of fittings leads to considerable additional costs. That’s why they do not prescribe specific features but rather work with budgets. This way, as a customer, I can decide myself how expensive my tiles or bathrooms will be. If you deduct these packages, the actual house is not really expensive. I found this idea very interesting, and indeed the basic house is not “that expensive.” Unfortunately, this provider is rather in the upper mid-range, even with the option for package-based fittings.

Ultimately, I am now wondering whether it would even make sense to develop "our" house together with an architect and then carry out the tender process myself with project management support. That would be similar to the fittings package concept from one provider, but covering all parts of the house construction.

What do you think is a sensible approach? A developer who also takes responsibility for warranties, or project management where I might have to chase my requirements across various companies myself?

One more thing about security (which I also found interesting). Almost all companies offer various homebuyer protection packages. In my opinion, some of these are not worth the paper they are printed on. Only three companies work with well-known providers in this area. Some of these packages are additionally charged. However, one company includes homebuyer insurance (liability, etc.) and a warranty insurance with TÜV or DEKRA supervision in the basic house price. But a completion guarantee is also charged separately. Another company included a builder’s guarantee from R+V. If you use a developer, should you definitely opt for such a package?

Right now, I feel overwhelmed and can’t see the forest for the trees.

Any ideas, suggestions, help???

Many thanks and sunny days.

GHeymann

GHeymann schrieb:
According to this, the "gross profit" for companies would be between approximately €150.00 and €500.00 per square meter (about $160 to $535 per square yard). How can this be explained?

.. oh great .... by that logic, prefabricated home manufacturers and property developers would be swimming in unimaginable wealth .... forget it .... competition in this industry is fierce and ruthless ...

GHeymann schrieb:
Ultimately, I am now wondering if it might even be sensible to work with an architect to design "our" house and then handle the tendering process ourselves through construction supervision

.. depends on finding the right architect and thus also a construction manager ... this will definitely make building much more expensive but also better (if the architect is good) because you can decide everything yourself, but you also pay accordingly ....

GHeymann schrieb:
I just can’t see the wood for the trees anymore.

.. yes, that’s how it is ... for non-experts, a huge and unfamiliar universe opens up .... just ask "Bauexperte," our moderator, for help ...

Hello,

the “language” of the internet is the informal “you” 😀

GHeymann schrieb:

I want to build a house for my son near Bonn. For this, I have been looking for suitable building plots through various real estate portals. Usually, the interesting plots are offered by property developers. Here is my first question: some providers said that you can only get the advertised plot if you also contract them to build the house....

That’s how I work as well. If I manage to secure an option on a plot—which is difficult enough since plot owners generally think they can handle it better themselves—I want to be rewarded with the house construction. I’m not a real estate agent, but a construction supervisor.

GHeymann schrieb:

and that I should first sign a contract. Others want at least a consultation meeting before they release detailed data about the plot. Is this approach even legally permissible?

Signing a contract before viewing the plot is borderline, and I would never do that in your position. A consultation meeting helps sellers decide if it’s worth the effort to show the plot! Both are legitimate – that’s free market economy.

GHeymann schrieb:

And if I sign such a contract, can I withdraw from it free of charge if I don’t want the offered plots? (Not from the companies’ perspective, since probably you can’t, or only with restrictions, but legally speaking.)

As mentioned above, I would not do that.

Legally – I’m not a lawyer and cannot give legal advice; in Germany, that is reserved for legal professionals – you can only withdraw from such a contract if a cancellation right is explicitly stated and included in the contract.

GHeymann schrieb:

Next topic that made me quite suspicious is the pricing structure. When I look at the offers, the price per square meter of living space varies from €1340.00 to nearly €1700.00. Depending on the provider, a few more or fewer services are included, but not significantly. For example, one provider includes the foundation survey and uses supposedly better materials.

I hope you can actually read a building specification (BB). What is not included in the specification is considered not purchased!

You can expect that a quality detached house of KfW 70 energy efficiency standard, constructed with solid build, requires around €1500.00 per sqm (square meter) of living space. Soil surveys are not included in the price per square meter of living space.

GHeymann schrieb:

I once read somewhere online that building a house in solid construction (standard gable roof without basement and medium finish, 120-140m² living space) should not cost a company more than €980.00 per sqm in equity excluding VAT. Accordingly, the “gross profit” for companies would be about €150.00 to €500.00 per sqm. How can this be justified?

With the commercial obligation to manage funds prudently and to secure the company’s long-term survival.

GHeymann schrieb:

One provider explained that the basic house is not expensive, but that the choices in fittings from most clients lead to significant additional costs. Therefore, they don’t specify feature standards but work with budgets.

With area code 067xx?

GHeymann schrieb:

Here, as a customer, I can decide myself how expensive my tiles or bathrooms are. If you subtract the packages, the actual house is not really expensive. I found this idea very interesting and indeed, the basic house is not really “that expensive.” Unfortunately, this provider is rather mid-range, even with the package budget option.

I can imagine which provider you mean; however, the seller’s statement is only partly true. It is correct that you can spend a lot of money on fittings, and this can drive the final price to unexpected heights. But it depends on your self-discipline how far the budget increase goes.

How much are you willing to invest?

More important is the choice of truly essential components in building a detached house: how thick is the slab, which bricks or blocks are used, how is the roof constructed, what kind of windows are installed, which building services (mechanical, electrical) are included, and so on. Which tradespeople carry out the work, how is site supervision handled, what guarantees does the provider offer, and so on. And very important: how is the advice and how are things handled after signing the contract? The range within these components from cheap to premium is wide and only becomes apparent after moving in.

GHeymann schrieb:

Eventually, I’m asking myself whether it would even make sense to develop “our” house together with an architect and then do the tendering myself with construction supervision. That would be like the fitting package from one provider, only for all parts of the construction.

No, that is a typical misconception.

When awarding contracts through an architect—which is not to say this is a bad choice—you have to tender all trades at least three times and must have the necessary knowledge if you don’t want to be fully dependent on the architect’s reliability. The fitting packages concern “only” parts of the interior finishing, except for the entire electrical trade, if I recall correctly.

A major disadvantage with contract awarding through an architect is that he cannot guarantee you a fixed price; otherwise, he would be legally liable as the main contractor. You create the floor plans with him, and based on those, he makes an initial rough cost estimate. This cost estimate becomes more accurate the more tender documents come back. There remains a residual risk that the planned budget will be exceeded by a factor “x.”

GHeymann schrieb:

What do you think is a sensible approach? A property developer who also handles the warranty, or construction supervision where I might have to chase multiple companies myself to meet my requirements?

A developer means you purchase the house and plot from one source and pay the price in up to seven installments. You can influence the floor plans; the developer takes care of the rest—for a more or less relaxed experience.

Classic construction supervision—and I don’t mean nationwide providers or their salespeople—takes those tasks off your hands. For example, this is how we work. We or our architect first examine the plot and clarify the building law. Then we conduct consultation meetings and plan the floor plans with our architect in the next step. During the time it takes to develop the drafts, we select among suitable builders based on the distance to the construction site and their comprehensive references which builder should erect the house. With the second draft, we usually present a fixed price offer; changes often occur after the first draft. Hitting the mark perfectly is very rare. Classic construction supervision accompanies a construction project from initial meeting to moving in and, if all goes well, beyond. We live off recommendations 😉

GHeymann schrieb:

One more thing about security (which I also found interesting). Almost all companies offer various homeowner protection packages. In my opinion, some are not worth the paper they’re written on.

I agree!

GHeymann schrieb:
Only three companies cooperate with reputable providers in this area. Some packages are additionally chargeable. One company has included builders liability insurance, etc., and a warranty insurance with TÜV or DEKRA monitoring in the house’s base price. But a completion insurance is also chargeable. Another company included a building guarantee from R+V. If working with a developer, you should definitely choose such a package, right?!

Insurances and securities—besides independent financing advice—are the most important aspects when building a detached house. Even if you choose to award contracts via an architect, you should draw up appropriate contracts with each individual trade, including delay penalties! And despite possible security packages, engaging independent expertise is always worth considering!

Best regards, Bauexperte

Hello,

you’ve already done the right thing by being skeptical and questioning what you hear.
I’m writing to you as a client, someone who has already made a decision about which company to build with.

First of all, regarding those package deals… they are legal, and the government benefits from a high property transfer tax. This tax applies to the total price, not just the land. Aside from that, I find this method unpleasant and would never build with such a company, no matter how good the plot is. Using limited space to lock in customers usually ends badly. You have no room to negotiate afterward because you have to build with that company.
You also correctly noticed that at least €1,500 (about $1,600) per square meter is due. However, this applies only to the house. Additional incidental building costs will likely come on top of that.
What a company earns on a house doesn’t really matter to you as a client. You have to pay what is on the invoice. I doubt that reputable companies make excessive profits. At the moment, they certainly have a good income and can invest, but the time after the building boom will come.

All this marketing nonsense can basically be ignored; only a thorough comparison of the building specifications and inquiries about extra charges help.
The more precisely you can communicate your wishes to the seller BEFORE signing, the more accurate their offer will be.
At my company, it is also possible to visit the model home exhibition beforehand, and if you’re lucky, even have a guided tour, where you can directly ask about extra costs.
In any case, we created an Excel list and compared the individual points of the building specifications. You don’t always find matching items because different terminology is often used.

In the end, for us, gut feeling and recommendations from other clients—some we know personally and others we met on construction sites (arranged through the seller)—were decisive.

It is also important to keep an eye on the extra costs. How is a non-expert supposed to see what’s missing in a building specification? For example, we were surprised that we had to organize and pay for temporary construction power/water and road closures ourselves. That was a sudden €1,500 (about $1,600). If there are several such items, a cheap offer can quickly become more expensive than a mid-range one.

We had almost everything done by one company—everything that could later result in warranty issues. We handled wallpaper and flooring in the dry rooms ourselves.

Only one thing I would now recommend, even though everything went smoothly for us: an external construction supervisor. This person is simply more objective and can argue differently. Normally, our site manager should have taken this role, but he was a pushover with no backbone and was afraid to report defects, which I ended up doing myself.

Bauqualle schrieb:
.. it depends on the right architect and therefore the construction manager ... building will become significantly more expensive but also better (if the architect is suitable) because you can decide everything yourself, but you also pay accordingly ....

That is not entirely correct. It depends on which service phases of the architect you use. If you use all of them, it will be more expensive. However, the construction supervision phase is usually much more extensive, which drives up the cost.

emer schrieb:
That is wrong.

.. that is not wrong, it is absolutely correct .. what exactly do the service phases of the HOAI have to do with this? You should read my post very, very carefully once again .. thanks