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.
Mahri23 schrieb:
If you handle patching and connecting the outlets yourself, then running the few cables from the outlets to the utility room should be manageable too. 😉
I did it myself as well. The general contractor had installed conduits. That made the cabling quite straightforward. I was also able to distribute our satellite cables and a few speaker cables in the attic. Yes, definitely. I’ve thought about it too, but I’ll decide once we schedule the appointment with the electrician. I wanted to provide the cables anyway since I work in IT and might get them at a good price. I can do patching and crimping, but I’ve never installed outlets myself. It should be easy enough, though. One step at a time.
jrth2151 schrieb:
Overall, everything else is probably quite similar.When it comes to selecting materials, probably (?) But regarding electricity/water/costs for drying the screed during the construction phase and such, my main question was whether there are differences when building with a developer.In principle, we are budgeting with a similar buffer, but I think we have a bit more already included in the construction price (painter’s fleece/white painted walls and floors).
As for contracts, yes, I have also read that signing with financing should ideally happen within two weeks before the notary appointment. But how do you time that? So.. I contact the bank, they say it’s possible, with an offer. Then usually you have only a short time to submit the remaining documents and so on, and the bank generally takes some time to review the documents (and I have heard that processing times vary significantly). If everything is okay at that point, I assume it’s about finalizing the paperwork and signing contracts, right? Then you somehow schedule appointments for the financing contract and the notary? Do you have some time for that, or are banks also pushing hard with something like “if you don’t come in and sign within 3 days, then no”?
A
Axolotl20226 Jul 2022 14:07mayglow schrieb:
But regarding electricity/water/costs for drying the screed during the construction phase and such, my question was basically whether there are differences if you build with a developer. You are buying a portion of a house with land. And you only pay for that portion of the house with land. According to a legally defined payment schedule. Additional construction costs are the expenses of the builder—that is, the developer. Usually, no extra costs will be charged to you. Maybe surveying fees if you already own the property. But electricity, water, etc. are included in the price.
It’s like buying a car. You don’t pay extra for electricity during the manufacturing process or similar.
Axolotl2022 schrieb:
You are buying a portion of a house with land. And you only pay for that portion of the house with land. This is based on a legally defined payment schedule. Additional construction costs are the builder’s expenses—that is, the developer. Usually, no further costs will be charged to you. Maybe surveying fees if you already own the property. But electricity, water, etc. are included in the price.
It’s like buying a car. You don’t pay extra for electricity during production or similar. That definitely makes things much easier for you 🙂
But I would still carefully review the final contract.
Regarding financing:
After we had fully planned a model, our bank advisor secured us an offer for 4-5 days. During that time, the interest rates could not increase for us. It even became €30 per month cheaper because he advocated internally and was able to reduce the rates slightly. So try to get along well with your bank advisor. Being polite is essential in situations like this. It’s not a huge amount, but over 30 years it adds up.
After that period, a new offer with updated interest rates may follow.
Before you even get an offer, you’ll need a consultation and to work out a financing plan with your advisor. That all takes some time. Also, you might want to check your credit report first. It should definitely be completely clean.
jrth2151 schrieb:
After we finalized a model design, our bank advisor secured the offer for 4-5 days. And did the contract signing for the financing happen right away?
We are currently facing the problem that our financing discussions are moving faster than the talks with the builder. Although he initially communicated a timeframe (notary appointment likely in August, contracts still being prepared), going through the financing, requesting conditions, and so on all happened much quicker than expected, so now we’re getting a bit restless 🙄
mayglow schrieb:
So, did you sign the financing contract right away?
We are currently facing the opposite problem: our financing discussions are moving faster than the talks with the homebuilder. They did give us a timeline from the start (notary appointment expected around August, contracts still in progress), but somehow the financing process, checking conditions, and so on all went much quicker than expected, and now we’re getting a bit anxious 🙄Yes, we had to sign within that timeframe; otherwise, the offer would have expired. I doubt any bank will guarantee an offer lasting until August. However, interest rates have stabilized quite well recently. We signed in February when rates were rising daily. That was really stressful and required urgency. Just due to processing times and planning, our monthly payment increased by €200 (about $220) because the interest rates surged away from us.Currently, interest rates seem to be falling a bit again, so it’s probably wiser to wait, but no one can really predict that. As long as rates don’t change, I wouldn’t worry too much. Of course, everyone wants to get started as soon as possible, but it’s important not to rush things.
First, wait for the authorities to process the paperwork. After that, you’ll wish you only had to wait a month 😀
You often hear from older people that bureaucracy in Germany is slow, and you shrug it off—but now I’m beginning to really understand that frustration.