Hello everyone,
now I really need your help. And please try to avoid abbreviations in your answers. I’m still a bit inexperienced in this area. 😱
Problem: We have found a plot of land through a sales agent/broker who only sells it tied to a specific developer. The developer doesn’t seem to be bad. We haven’t heard anything negative about them so far in this region. They apparently have never been involved in court cases related to construction defects or similar issues. Well, the problem is that we get the feeling they do everything with a very basic, standard approach. They don’t seem to consider the individual needs of the builder. So far, we have only spoken with the broker, who offers a fixed price for a turnkey house. It’s a great KfW 70 house with a heat pump, triple glazing, rendered facade, and more... As soon as I mentioned that we want a fireplace and brick facade instead of rendering, it was dismissed immediately... because it costs more, doesn’t make sense, and is just nonsense… blah, blah, blah...
Question: Is this some kind of common tactic? What is their problem? What would be the best way to negotiate with them to get the most effective and economical outcome from the entire building project?
now I really need your help. And please try to avoid abbreviations in your answers. I’m still a bit inexperienced in this area. 😱
Problem: We have found a plot of land through a sales agent/broker who only sells it tied to a specific developer. The developer doesn’t seem to be bad. We haven’t heard anything negative about them so far in this region. They apparently have never been involved in court cases related to construction defects or similar issues. Well, the problem is that we get the feeling they do everything with a very basic, standard approach. They don’t seem to consider the individual needs of the builder. So far, we have only spoken with the broker, who offers a fixed price for a turnkey house. It’s a great KfW 70 house with a heat pump, triple glazing, rendered facade, and more... As soon as I mentioned that we want a fireplace and brick facade instead of rendering, it was dismissed immediately... because it costs more, doesn’t make sense, and is just nonsense… blah, blah, blah...
Question: Is this some kind of common tactic? What is their problem? What would be the best way to negotiate with them to get the most effective and economical outcome from the entire building project?
??? In your initial post, it sounded as if a finalized plan already exists—at least regarding the floor plans and fittings. As long as this is not the case, prices obviously cannot be given yet—makes sense. So either a predetermined plan must be available, or you are planning (at least roughly) with the general contractor, who will then prepare an offer including a price quote.
Good luck
K1300S
Good luck
K1300S
There is a rough plan from the general contractor or the real estate agent. A house with 130 sqm (1,400 sq ft) is planned, which fits exactly on this plot of land. According to the real estate agent, it is supposed to be of a higher mid-range standard. Where exactly are the details specified? In the construction contract? How exactly is it stated there? I have never seen a construction contract before...
The level of detail varies widely. Some construction and scope of work descriptions include even the smallest details, while others are very superficial. The more that is defined upfront, the less potential there is for problems later on. In any case, the scope of work description is part of the contract for work (possibly as an attachment).
Good luck
K1300S
Good luck
K1300S
W
wadenkneifer15 Jan 2014 16:35Hello,
exactly how and where something is specified depends on the general contractor. In our construction project, the scope of the specification document (part of the contract) is just under 50 pages, and every detail is described precisely regarding how it will be built. The actual construction contract is much shorter, about 15 pages, but it mainly covers the legal framework. I have seen specification documents that are only 2 pages long (the usual length for many general contractors is about 15 pages) and construction contracts that are just one page. This quickly gives you an overview.
Our building company’s process was as follows: a complete house planning session (floor plans, elevations, energy standards, heating/technical systems, general material selection/choice of quality for fixtures). Based on this planning session, specific plans were created, which we reviewed. Then, on this basis and with additional requested parameters, the cost estimate/offer with the detailed specification was prepared. A few options were included (for example, additional roller shutters). A draft contract was also provided. We reviewed both thoroughly (and had them checked) and in another meeting, the offer was explained to us in detail. After 1-2 minor adjustments, we quickly came to signing the contract. When it came to preparing the building permit/planning permission, it was mainly about deciding the exact position of the house on the plot. The material selection process was also very fast, as much had been fixed in advance (e.g., interior doors). We could have even completed the selection process before signing the contract.
Certainly, this is an extreme case and the provider invested significantly in advance. Nevertheless, I really liked it and found the price difference to the (less detailed/precise) competition to be worth it.
Best regards
Michael
exactly how and where something is specified depends on the general contractor. In our construction project, the scope of the specification document (part of the contract) is just under 50 pages, and every detail is described precisely regarding how it will be built. The actual construction contract is much shorter, about 15 pages, but it mainly covers the legal framework. I have seen specification documents that are only 2 pages long (the usual length for many general contractors is about 15 pages) and construction contracts that are just one page. This quickly gives you an overview.
Our building company’s process was as follows: a complete house planning session (floor plans, elevations, energy standards, heating/technical systems, general material selection/choice of quality for fixtures). Based on this planning session, specific plans were created, which we reviewed. Then, on this basis and with additional requested parameters, the cost estimate/offer with the detailed specification was prepared. A few options were included (for example, additional roller shutters). A draft contract was also provided. We reviewed both thoroughly (and had them checked) and in another meeting, the offer was explained to us in detail. After 1-2 minor adjustments, we quickly came to signing the contract. When it came to preparing the building permit/planning permission, it was mainly about deciding the exact position of the house on the plot. The material selection process was also very fast, as much had been fixed in advance (e.g., interior doors). We could have even completed the selection process before signing the contract.
Certainly, this is an extreme case and the provider invested significantly in advance. Nevertheless, I really liked it and found the price difference to the (less detailed/precise) competition to be worth it.
Best regards
Michael
W
wadenkneifer15 Jan 2014 17:25Kisska86 schrieb:
@Michael: When exactly did you sign the contract with the bank? Was it during the entire planning process?Quick answer: The financing with the bank was applied for and finalized based on the first concrete offer from "our construction company." In this case, that offer matched the later detailed scope of work down to the last euro.
In detail, our path to the house:
- Rough financial planning (own capital, rough house costs, additional expenses versus income, other expenditures, financing options)
- Verification of the rough financial plan with an independent advisor. Confirmation that our rough plan was generally affordable given our personal circumstances.
- Searching for and viewing countless plots of land, finally finding and reserving one (some had developer restrictions and were quickly ruled out)
- Initial talks with several construction companies, reviewing various catalogs and scope of services, visiting multiple show homes/parks
- Defining the "dream house" (what features are must-haves, what should the layout be), discussing various standard floor plans from catalogs — none really suited our needs
- Receiving 3 concrete offers from 3 companies (each adapted to our wishes based on the provider’s standard house; size, layout etc. were quite similar) / discussions to clarify the offers
- Choosing the construction company
- Obtaining specific financing offers
- Submitting the financing documents
- Signing the financing documents
- Notary appointment / purchase of the land
- Final negotiation of the contract for work / construction scope
- Signing the construction contract for the house
Maybe of interest: Overall, it took about 6 months from the initial financial planning to signing the construction contract. And that’s even though we knew quite precisely what we wanted/needed and the area where we wanted to build. Three children’s bedrooms plus an office are unfortunately not standard in German single-family houses, so there were not many suggestions for the floor plan upfront.
And I would certainly do it again in exactly this order.
Best regards
Michael
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