Hello!
We are currently very interested in a terraced house being built by a developer. Unfortunately, our main contact person is on vacation at the moment, and I don’t want to bother the backup contact too much (even though I already have a few times, oops). So for some more general questions, I thought I’d ask the forum 🙂
We currently have, among other things, a construction specification, but no contract draft yet. We are trying to review ourselves where there might potentially be additional costs beyond the fixed price (“custom requests”), but in one or two areas we are still struggling to estimate this.
Generally: There is a lot of discussion here in the forum about incidental building costs and so on. But with a developer, they are the client, not us. Am I correct to assume that, because of this, we don’t really need to consider any “owner-supplied” costs? The documents do include a few general details about infrastructure (for example, electricity, water, telecommunications are included). When I think of things like construction site power, there’s nothing mentioned in the documents I have so far, but basically I assume that is the developer’s responsibility since they are the client?
There are quite often terms in the construction specification like “according to structural engineering” or similar (excerpt: “The exterior walls above ground level will be built from calcium silicate bricks, or reinforced concrete if structurally required. All other load-bearing walls according to structural engineering.”) or “according to the architect’s specifications” (“In some areas, brick slips will be used, with color and design as specified by the architect.”). We understand that with a terraced house via a developer there isn’t much choice here, and that is perfectly fine with us. But if I imagine we are in the construction phase and I send an inspector with the construction specification, such wording seems rather vague to easily check anything. (I mean, they can still say if something is done completely poorly in execution.) Are such formulations normal, or should these be specified more clearly?
What is the usual process regarding “custom requests”? I read that these can already be part of the notarized contract. What is typically decided before signing the contract, and what comes afterward? Can I expect to select tiles and decide on power outlets shortly before contract signing, or is it initially more fundamental things (like relocating a wall or similar)? We will certainly ask the developer about this again, but it doesn’t hurt to know how it usually works 😉 I imagine the more I define beforehand, the more secure I am about the price. Or is that assumption wrong?
Speaking of price: We are currently contacting banks, but are unsure how to handle the topic of “custom requests.” Our initial impression is that we are quite satisfied with the standard in the construction specification we have. There are one or two things we are a bit uncertain about (flooring is included, depending on the area tiles or parquet up to 30cm (12 inches) per square meter ... is that sufficient, or should we allow a buffer?), and beyond that a few things we might want to add (maybe 2-3 more LAN connections for access points, possibly empty conduits for photovoltaics, possibly empty conduits in the garage for a charging station or, depending on the price, have the charging station installed directly). We would be happy without them, but it just seems sensible to have these included now. Our original idea was to pay for these out of pocket, separate from the financing, but if they end up in the notarized contract and come with an additional cost, and we haven’t told the bank about it, the price would then be higher than what we communicated to the bank. Does the bank not care because these are our own funds, or could it even be unwise not to inform the bank, as it might improve the loan-to-value ratio? (The house might be worth more without the bank needing to provide additional funds.) I mean, these will probably just be minor things that won’t make much difference, but I am still a bit confused about how this is typically handled.
We are currently very interested in a terraced house being built by a developer. Unfortunately, our main contact person is on vacation at the moment, and I don’t want to bother the backup contact too much (even though I already have a few times, oops). So for some more general questions, I thought I’d ask the forum 🙂
We currently have, among other things, a construction specification, but no contract draft yet. We are trying to review ourselves where there might potentially be additional costs beyond the fixed price (“custom requests”), but in one or two areas we are still struggling to estimate this.
Generally: There is a lot of discussion here in the forum about incidental building costs and so on. But with a developer, they are the client, not us. Am I correct to assume that, because of this, we don’t really need to consider any “owner-supplied” costs? The documents do include a few general details about infrastructure (for example, electricity, water, telecommunications are included). When I think of things like construction site power, there’s nothing mentioned in the documents I have so far, but basically I assume that is the developer’s responsibility since they are the client?
There are quite often terms in the construction specification like “according to structural engineering” or similar (excerpt: “The exterior walls above ground level will be built from calcium silicate bricks, or reinforced concrete if structurally required. All other load-bearing walls according to structural engineering.”) or “according to the architect’s specifications” (“In some areas, brick slips will be used, with color and design as specified by the architect.”). We understand that with a terraced house via a developer there isn’t much choice here, and that is perfectly fine with us. But if I imagine we are in the construction phase and I send an inspector with the construction specification, such wording seems rather vague to easily check anything. (I mean, they can still say if something is done completely poorly in execution.) Are such formulations normal, or should these be specified more clearly?
What is the usual process regarding “custom requests”? I read that these can already be part of the notarized contract. What is typically decided before signing the contract, and what comes afterward? Can I expect to select tiles and decide on power outlets shortly before contract signing, or is it initially more fundamental things (like relocating a wall or similar)? We will certainly ask the developer about this again, but it doesn’t hurt to know how it usually works 😉 I imagine the more I define beforehand, the more secure I am about the price. Or is that assumption wrong?
Speaking of price: We are currently contacting banks, but are unsure how to handle the topic of “custom requests.” Our initial impression is that we are quite satisfied with the standard in the construction specification we have. There are one or two things we are a bit uncertain about (flooring is included, depending on the area tiles or parquet up to 30cm (12 inches) per square meter ... is that sufficient, or should we allow a buffer?), and beyond that a few things we might want to add (maybe 2-3 more LAN connections for access points, possibly empty conduits for photovoltaics, possibly empty conduits in the garage for a charging station or, depending on the price, have the charging station installed directly). We would be happy without them, but it just seems sensible to have these included now. Our original idea was to pay for these out of pocket, separate from the financing, but if they end up in the notarized contract and come with an additional cost, and we haven’t told the bank about it, the price would then be higher than what we communicated to the bank. Does the bank not care because these are our own funds, or could it even be unwise not to inform the bank, as it might improve the loan-to-value ratio? (The house might be worth more without the bank needing to provide additional funds.) I mean, these will probably just be minor things that won’t make much difference, but I am still a bit confused about how this is typically handled.
We are currently building with a developer and are already a couple of steps ahead. Right now, we are waiting for the building permit. At least I can tell you how the process went for us.
We saw a house through the Volksbank that, like yours, is being built with a developer. Everything was already fully planned (floor plan, facade, carport, landscaping, etc.). Everything was great.
We were very satisfied with most things, but we wanted to make some adjustments to the ground floor and upper floor because I needed a home office, and my partner wanted a separate bathroom for us. We also changed a few windows. Even before signing the construction contract and arranging financing, we planned all the floor plan adjustments together with the developer, who immediately gave us a price estimate of about €11,000 (around $12,000). We then included that as an add-on in the construction contract.
We were told that everything else should be sorted during the selection of fixtures and fittings and later on. The most important thing is to get the building application finished as quickly as possible since the current wait time is around three to four months. Spending time beforehand deciding on power outlets or other details will only delay this. Apart from the floor plan and the locations of windows and doors, most other changes can still be made after receiving the building permit.
As a buffer, we added an additional €20,000 (around $22,000). One extra power outlet costs about €50 (around $55), and we still have to do our selections for fixtures. We are currently planning with the standard options, but you never know. It’s worth reading the building specifications and googling each model (sink, faucet, door, etc.) to see if you are basically happy with them. For us, everything was fine so far.
Also, I would like to have LAN cables installed, which will add some cost. I plan to handle the patching and connecting of sockets myself. Painting and vinyl flooring are still outstanding. Only the tiled areas (bathroom, hallway, utility room) are included. We will see about all of that once it’s time. The important thing for us is that the €20,000 (around $22,000) buffer can cover everything that can no longer be easily changed later. Flooring and painting can still be done after moving in. At worst, you live on a construction site for about six months. I see the house as a lifelong project anyway, so a few months don’t bother me.
This gave us a framework for financing: the original price plus floor plan adjustments plus the buffer. The more buffer you can afford, the better, but be sure to check for options for early repayment so you don’t get stuck with the unused buffer amount if you end up not needing it.
Our bank took the total price from the contract (construction costs plus adjustments) as the house price, and we expressed that we wanted to have a buffer. For us, that was a maximum of €20,000 (around $22,000) because we are financing almost everything. €10,000 (around $11,000) from the bank and €10,000 from our savings.
Only the land purchase contract was notarized. The construction contract is a regular contract without a notary.
Regarding the other questions:
Construction electricity and water are included for us until the house water connections are completed. So, once the utility company installs the meter in the house, we’ll start paying. But that will only happen after the shell construction, etc. The roughest part is already done by then. Just in case, I already secured an electricity contract at 23 cents per kWh, which we will simply transfer from our apartment to the house.
What will also come up is the drying of the screed. For this, the heating needs to run continuously in screed drying mode for several weeks. According to experience reports and depending on the time of year, using a heat pump for this can easily cost around €1,000 (around $1,100).
As a small recommendation, I’d like to mention Instagram. There are many families and home builders who share their floor plans and ideas there. As a layperson, you usually have no idea exactly what you want or how to design floor plans. For example, we took the layout of our bathroom from Instagram. We just took the screenshot to the developer, and they implemented it exactly as shown and were very pleased that we came so well prepared.
Otherwise, just ask your developer a lot of questions. You seem to have found a good one. Our developer said from the beginning that we could ask as many questions as we wanted. Better to ask one time too many than to have problems later due to misunderstandings or gaps in knowledge. It saves everyone a lot of work and headaches.
We saw a house through the Volksbank that, like yours, is being built with a developer. Everything was already fully planned (floor plan, facade, carport, landscaping, etc.). Everything was great.
We were very satisfied with most things, but we wanted to make some adjustments to the ground floor and upper floor because I needed a home office, and my partner wanted a separate bathroom for us. We also changed a few windows. Even before signing the construction contract and arranging financing, we planned all the floor plan adjustments together with the developer, who immediately gave us a price estimate of about €11,000 (around $12,000). We then included that as an add-on in the construction contract.
We were told that everything else should be sorted during the selection of fixtures and fittings and later on. The most important thing is to get the building application finished as quickly as possible since the current wait time is around three to four months. Spending time beforehand deciding on power outlets or other details will only delay this. Apart from the floor plan and the locations of windows and doors, most other changes can still be made after receiving the building permit.
As a buffer, we added an additional €20,000 (around $22,000). One extra power outlet costs about €50 (around $55), and we still have to do our selections for fixtures. We are currently planning with the standard options, but you never know. It’s worth reading the building specifications and googling each model (sink, faucet, door, etc.) to see if you are basically happy with them. For us, everything was fine so far.
Also, I would like to have LAN cables installed, which will add some cost. I plan to handle the patching and connecting of sockets myself. Painting and vinyl flooring are still outstanding. Only the tiled areas (bathroom, hallway, utility room) are included. We will see about all of that once it’s time. The important thing for us is that the €20,000 (around $22,000) buffer can cover everything that can no longer be easily changed later. Flooring and painting can still be done after moving in. At worst, you live on a construction site for about six months. I see the house as a lifelong project anyway, so a few months don’t bother me.
This gave us a framework for financing: the original price plus floor plan adjustments plus the buffer. The more buffer you can afford, the better, but be sure to check for options for early repayment so you don’t get stuck with the unused buffer amount if you end up not needing it.
Our bank took the total price from the contract (construction costs plus adjustments) as the house price, and we expressed that we wanted to have a buffer. For us, that was a maximum of €20,000 (around $22,000) because we are financing almost everything. €10,000 (around $11,000) from the bank and €10,000 from our savings.
Only the land purchase contract was notarized. The construction contract is a regular contract without a notary.
Regarding the other questions:
Construction electricity and water are included for us until the house water connections are completed. So, once the utility company installs the meter in the house, we’ll start paying. But that will only happen after the shell construction, etc. The roughest part is already done by then. Just in case, I already secured an electricity contract at 23 cents per kWh, which we will simply transfer from our apartment to the house.
What will also come up is the drying of the screed. For this, the heating needs to run continuously in screed drying mode for several weeks. According to experience reports and depending on the time of year, using a heat pump for this can easily cost around €1,000 (around $1,100).
As a small recommendation, I’d like to mention Instagram. There are many families and home builders who share their floor plans and ideas there. As a layperson, you usually have no idea exactly what you want or how to design floor plans. For example, we took the layout of our bathroom from Instagram. We just took the screenshot to the developer, and they implemented it exactly as shown and were very pleased that we came so well prepared.
Otherwise, just ask your developer a lot of questions. You seem to have found a good one. Our developer said from the beginning that we could ask as many questions as we wanted. Better to ask one time too many than to have problems later due to misunderstandings or gaps in knowledge. It saves everyone a lot of work and headaches.
One important thing I forgot to mention:
Try to schedule the dates (notary appointment, signing the construction contract, signing the financing agreement) very close to each other. For each of these contracts, you have a 14-day cancellation period. If anything doesn’t work out—and these days you never know—you can easily back out.
Our sequence was construction contract -> financing -> notary appointment. All within one week. This order makes sense because the notary needs the financing documents for the mortgage registration.
Edit: Since no one else ever mentioned this and we weren’t fully aware:
You’ll face a lot of smaller bills from various authorities at the beginning. It’s not much overall, but 1,000€ (about 1,100 USD) can disappear quickly.
For example, the land registry entry costs around 70€ (about 75 USD). The house number registration is about 30€ (about 33 USD). The notary fees for the land seller were 250€ (about 275 USD), which we had to reimburse, and so on.
Try to schedule the dates (notary appointment, signing the construction contract, signing the financing agreement) very close to each other. For each of these contracts, you have a 14-day cancellation period. If anything doesn’t work out—and these days you never know—you can easily back out.
Our sequence was construction contract -> financing -> notary appointment. All within one week. This order makes sense because the notary needs the financing documents for the mortgage registration.
Edit: Since no one else ever mentioned this and we weren’t fully aware:
You’ll face a lot of smaller bills from various authorities at the beginning. It’s not much overall, but 1,000€ (about 1,100 USD) can disappear quickly.
For example, the land registry entry costs around 70€ (about 75 USD). The house number registration is about 30€ (about 33 USD). The notary fees for the land seller were 250€ (about 275 USD), which we had to reimburse, and so on.
A
Axolotl20226 Jul 2022 12:51jrth2151 schrieb:
We are currently also building with a property developer jrth2151 schrieb:
Only the land purchase contract was notarized in our case. The construction contract is a standard contract without notarization. Then it is quite simple. You are NOT building with a property developer but with a general contractor. A property developer ALWAYS sells a finished product—house with land. A developer contract must also be notarized. Payments are made according to real estate agent and developer regulations, not arbitrarily. There are many other differences compared to your construction project.
Axolotl2022 schrieb:
It’s quite simple then. You are NOT building with a property developer, but with a general contractor. A property developer ALWAYS sells a finished product – the house with the land. A developer contract must also be notarized. Payments are made according to the regulations for real estate agents and property developers, not arbitrarily. There are many other differences compared to your construction project.Learned something new again. Thanks!
But overall, everything else is probably very similar.
jrth2151 schrieb:
I would also like to have Ethernet cables installed, which will cost a bit more. However, I plan to do the patching and connecting of the outlets myself. If you handle the patching and wiring of the outlets yourself, you can definitely manage running the cables from the outlets to the utility room as well. 😉
I did it myself too. The general contractor had installed empty conduits, so laying the cables was no big deal. That way, I was also able to distribute our satellite cables and some speaker cables in the attic.
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