ᐅ Local Construction Company or Larger Building Contractor?

Hello,
I have read a lot here already and was able to incorporate some of the information into our planning that I probably would never have thought of otherwise, so thank you for that!
Now, the situation is that we can buy our desired plot of land in the Diepholz district (Lower Saxony), and the decision about who will build our house (turnkey) is getting closer.
So far, we have collected several offers and are currently favoring two:

A larger company from Lindern (Oldenburg), about 80 km (50 miles) away from us.
Very attractive price, including painting work (although only textured wallpaper and inexpensive laminate flooring up to 30€/m² (about $30 per sq.ft.) are included). No KfW 55 standard, and they work a lot with subcontractors, which doesn’t necessarily have to be a disadvantage. Price around €246,000.

And a small company from the neighboring village, about 5 km (3 miles) away from us.
They have already built 4 houses in the area where we plan to build. They would also build to the KfW 55 energy efficiency standard. The downside is that they are more expensive than the amount the subsidy would cover, and painting work would not be included. Price around €267,000.

We are quite torn about which choice is better. We like the idea of supporting a local company, but how much is it worth to us to pay more… since painting work would certainly cost another good €10,000.
€267,000 + 10,000 - 18,000 (subsidy) = €259,000 compared to €246,000.
Or do you think the better energy efficiency of the house is definitely worth it?

Hi. First of all, you should carefully compare the scope of work descriptions to see if the house prices are truly comparable. For national providers, for example, the foundation slab is often not included, nor are earthworks.
With a regional builder, the foundation slab is frequently included, and earthworks are usually covered at least for the first 30cm (12 inches) or so.
Don’t just focus on the financial aspect.
I don’t think 80km (50 miles) is really a big distance, but a local builder can probably fix many issues more flexibly, knows the local subcontractors better, and is better connected in the area.
If the general contractor knows they might see you at the supermarket every Saturday for the next 40 years, they will probably pay more attention to doing a good job and ensuring quality work from their subcontractors.

I’m not saying you can’t have bad experiences with a regional builder, but they are definitely more motivated to make corrections. If they have already built four houses in town, ask around about the experiences.
Have you had any conversations already? Pay attention to who you are talking to. With a big company, you might be dealing with a pure salesperson who promises everything because they know they don’t have to deliver on it later. With a regional builder, you might be speaking directly with the managing director.
In the end, though, it all comes down to the contract and the scope of work description. So that is what needs to be checked thoroughly.

It is not possible to make a decision without more details. In general, the prices are relatively on the lower end of the scale unless you are building around 100 m² (1,076 sq ft). For my decision, I created an Excel table and listed all the costs for each offer, including the house, estimated upgrades, painting work (if not included), earthworks, etc. At the end, you get a total sum that you need. Make sure to price all client-side services according to the scope of work and critically question whether, for example, you really want and can paint the roof overhang yourself (scaffolding required = coordination with the construction company).

In the end, decide which house offers the better value for money.

For subsidies, I added a separate section at the very bottom. These are initially not important for the decision and at best serve as a tipping point.

First of all, thanks for your tips. The scope of work description is almost identical for both, and if anything was missing, we requested it and included the additional cost. We need to add some extra costs for plumbing and electrical work in both cases, as usually only the standard options are included. The foundation slab and 30cm (12 inches) of earthworks are already included in both offers. What you mentioned hits the mark: with the larger company, we talk to a "salesperson" who hands us over to the site manager when the project starts and then is no longer involved. With the smaller company, we spoke directly to the owner, who will also supervise the site and be hands-on. Experiences with other builders were also a positive reason to move away, although things sometimes went wrong but were resolved. However, the price was often a drawback with those.

What surprised me a bit was his statement that it doesn’t matter if an extra window is added or not, since the work on the wall the window replaces would then be eliminated. 😕 For me, that calculation is questionable, but I’m not familiar with the prices at all.

SamSamSam schrieb:

A larger company from Lindern (Oldenburg), about 80 km (50 miles) away from us. Very competitively priced, also including painting work (although only textured wallpaper and cheap laminate flooring up to 30€/m² (30 USD/ft²) included). Without KfW 55 standard and they work a lot with subcontractors, which doesn’t necessarily have to be a bad thing?! [...] And a small company from the neighboring village, about 5 km (3 miles) away from us. This company has already built 4 houses in the town where we will build.

For me, the decision would be clear. I wouldn’t base my home construction primarily on which areas the government currently supports with subsidies. On the other hand, meeting KfW 55 standards probably isn’t that complicated, so I would inquire again about that. An 80 km (50 miles) distance in my view is already quite far on the edge of the local region — I would expect that they don’t use the same subcontractors they usually work with. But if your plans are already developed enough to request offers, you should share them here. Who are they from anyway? With an architect, you usually get to know the professional responsible for the contracting already.

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11ant schrieb:

The decision would be clear for me.

Would you choose the larger, more affordable, but more distant company? We have worked with the larger company to develop what we want and how it should look. This is based on a house we visited with them that closely matched our ideas. We only needed to slightly adjust some walls and plan the doors differently. We then submitted this floor plan to the local building company, who calculated their quote based on it. Is it allowed to simply upload these documents here? 😳 We haven’t spoken with an architect yet.