ᐅ Include government subsidies (such as KfW and L-Bank) in the house construction schedule for better planning.

Hello dear forum,

As a silent follower, I have now decided to start a thread for our building project to simply gather your opinions, tips, and constructive criticism.

About us:
- Both 31 years old, employed, wife on parental leave (max. 2 more years), then part-time. We have 2 children (2 years and 1 month).

Basics:
- The plot has been allocated to us by the municipality. It is a fully serviced new development area and meets our expectations perfectly! We have not purchased it yet. Although there is a building obligation requiring a move-in ready house within 2 years, we are currently negotiating to extend this period to at least 5 years.
- Our goal is to build a single-family house with about 130-140 square meters (1400-1500 square feet) of living space.
- We want to start building in 1-2 years.

Finances:
- We have equity but not enough to pay for the plot completely. Therefore, a loan is necessary.
- We also plan to apply for the promotional loan from L-Bank for the house construction. According to initial assessments (also with a financial advisor), we are generally eligible for funding.

Our thoughts on the process:
- Finance the plot separately (fixed-rate loan or variable loan) — we still need to obtain financing offers.
- Have the plot surveyed and a soil report conducted.
- Hire an architect for services phase 1-2 to create a preliminary design.
- Using the results of the preliminary design, the plot survey, and the soil report, request quotes from house builders and, in parallel, ask civil engineers for cost estimates (earthworks, disposal, etc.) to plan accordingly. (I am aware that additional construction incidental costs apply, but I see these as the largest cost component, which I want to plan as accurately as possible with this step.)
- After being approved for funding in principle, and after comparing the offers in parallel, we would select a construction company.
- Simultaneously finalize the remaining financing.

- When should/can we submit the application for the L-Bank loan? At which step would you recommend incorporating this?
- Do you generally find this approach sensible?

Thank you in advance.
Best regards,
LetsBau24

Just a few questions:
1. Why do you want to have the land surveyed again?
2. Why involve the architect for design phases 1 and 2, then go to the home builder?
3. What do you mean by "home builder"?
4. Why hire an excavation contractor if you are working with a "home builder"?
5. How do you plan to objectively compare offers from different "home builders"? There is no one in your planning team to prepare a tender. And each home builder is supposed to work with you to develop a floor plan, which can look very different from one another.

I have no experience with L-Bank.

Let´sBau24 schrieb:

- When should/can we submit the application for the L-Bank? At which stage would you include this?

It depends on the funding conditions of your specific program. Usually, there are certain requirements you need to meet, and at the same time, some events must not have occurred yet. However, this varies depending on the exact program. Make sure to watch out for potential pitfalls here.

You should finance the land flexibly. A longer fixed interest period could prevent another bank from financing you.

KarstenausNRW schrieb:

Just a few questions:
1. Why do you want to have the plot surveyed again?
2. Why use design phases 1 and 2 with the architect and then go to the homebuilder?
3. What do you mean by "homebuilder"?
4. Why a civil engineer when you are working with the "homebuilder"?
5. How do you plan to objectively compare offers from "homebuilders"? There is no one in your planning process preparing a tender. And each homebuilder is supposed to work with you on a floor plan — which can look completely different everywhere.

I have no experience with L-Bank.

Thanks for the questions,
1. It is still being clarified whether the plot boundaries have already been surveyed.
2. and 3. I don’t want to sign a construction contract with a general contractor (GC) yet and commit myself before I have received the preliminary confirmation for the subsidies (which according to the conditions I am not allowed to do). By "homebuilder," I mean a GC or housing provider — sorry for the wording.
4. We have already obtained offers from housing providers and GCs, but the costs for earthworks are only estimated. Also, the geotechnical survey is only conducted after signing the construction contract. By financing the plot separately (I will leave aside how for now) and commissioning the geotechnical survey independently, I am trying to narrow down the costs for the earthworks as much as possible. That is why I want a civil engineering contractor to provide a cost estimate.
5. We want to approach the housing providers with the preliminary design plan created in design phases 1 and 2 and have them prepare exact offers based on these floor plans.

I’m not sure if I have a conceptual mistake or if I’m expressing myself incorrectly.

WilderSueden schrieb:

It depends on the funding conditions of your program. There are usually certain requirements, and at the same time, some events must not have occurred. However, everything is specific to the particular program. Be sure to watch out for the pitfalls here.

You should finance the land flexibly. A longer fixed interest period prevents another bank from refinancing you.

That is correct, thanks for the information! Financing the land flexibly was also on my mind. We also have a condominium that we are selling at the same time; we plan to use the proceeds to pay off the loan (land).

Let´sBau24 schrieb:

Thanks for the questions,
1. It is still being clarified whether the property boundaries have already been surveyed.

LOL – “still being clarified.” You either buy a surveyed plot (= its own land register entry with plot and parcel numbers) or a plot to be surveyed as part of the purchase agreement, marked by points A-D and about x square meters (sqm) (x square feet). This surveying then happens during the purchase process. You cannot become the owner of an unsurveyed plot, nor can you simply survey an unsurveyed plot yourself – that doesn’t make sense and is not possible.

Let´sBau24 schrieb:

2. and 3. I don’t want to sign a house contract with a general contractor (GC) and be tied to it before I have a basic approval for the subsidies (which, according to the conditions, I am not allowed to do). “House builder” means GC or home provider, sorry for the wording.

Okay. So you want a custom architect-designed house, but the work should be done by a GC, not the architect. That’s going to be interesting. You won’t get any comparable offers because you’re basically just giving them a rough floor plan.
- Materials
- Fixtures and fittings
- Energy efficiency, etc.
Every GC will offer you something different. The less experienced ones will offer a very competitive price upfront – but then add various change orders during construction (because nobody prepared detailed and competitive bids for each trade).
And the GC is supposed to handle phases 3 through X of the architectural services and submit the building permit application?
You should read up on that in this forum. @11ant will probably add his two cents ;-)

Let´sBau24 schrieb:

4. We have already obtained offers from home providers and GCs where the costs for earthworks are only estimated. Likewise, the soil survey will only be performed after signing the house contract. By financing the land separately (leaving that aside for now) and having the soil survey done, I am trying to narrow down the earthwork costs as much as possible. That’s why I want a specialist contractor for earthworks to provide a cost estimate.

Getting a soil survey is great. But on what basis should the earthworks contractor – why not the GC? – provide an offer? Does the earthworks contractor already know which GC will be awarded the contract and how that GC will implement possibly three different foundation recommendations? Are you asking the earthworks contractor for a quote for extensive soil replacement or strip foundations? What exactly does the GC want?

Let´sBau24 schrieb:

5. We want to approach the home providers with the preliminary design plans prepared during architectural phases 1 and 2 and have them prepare offers exactly based on those plans.

Okay, for your understanding:
You are talking to a car expert who advises you to buy a station wagon with a large trunk and a diesel engine (that corresponds to architectural phases 1 and 2). Then you take that to Dacia, VW, Mercedes, and Bentley. All four will offer you exactly the car you want – but you haven’t told any of them which features, color, or extras you want. Those would be architectural phase 6. Therefore, you need to consider carefully what you want the architect to do and what you need to get proper and comparable offers from the builders. For typical production homebuilders, that would be the building and service specifications, which you currently don’t have for your approach.