ᐅ $250,000 – Implementation of the building plan including all additional costs?
Created on: 15 Sep 2013 00:29
C
Campino
Hello Housebuilding Forum,
I hope I’m not starting this thread too early and that I’ll be taken somewhat seriously, even though I don’t have much experience with housebuilding yet.
My partner and I are planning to move out of a rental soon and get our own home. Until now, the plan was mainly to buy a relatively new house. However, I didn’t want to completely rule out the possibility of building a new one and wanted to at least get some information.
So today we visited a show home and had a very pleasant conversation with an employee of a fairly well-known prefab house manufacturer (I’m not sure if I’m allowed or should post the name here).
We shared what we were looking for in an existing house, which also reflected our basic requirements for a prefab home. I also mentioned to the employee that on property websites like immowelt or my-next-home, new construction projects with land are often offered, since we don’t have a plot ourselves.
The employee took notes on our wishes.
Between 130 and 150 sqm (1,400 and 1,615 sq ft)
Plot between 400 and 600 sqm (4,300 and 6,450 sq ft)
Basement
Underfloor heating
Painter/turnkey delivery
We didn’t express any specific wishes regarding balconies, bay windows, or similar features; it was mainly an initial conversation for information. We don’t want a townhouse but rather a fairly “normal” one-and-a-half-story house with a pitched roof.
Our total budget was stated as 250,000 euros (about $270,000). The employee said that “you can do something with that” regarding what we imagined and that he could provide a non-binding offer.
After reading around a bit here, though: is this even realistic? Can we seriously plan to get a house with a plot in this size range within that budget?
According to the employee, all costs would be covered in this offer, including property taxes, additional construction costs, and site costs.
I would really appreciate your opinions...
Best regards
I hope I’m not starting this thread too early and that I’ll be taken somewhat seriously, even though I don’t have much experience with housebuilding yet.
My partner and I are planning to move out of a rental soon and get our own home. Until now, the plan was mainly to buy a relatively new house. However, I didn’t want to completely rule out the possibility of building a new one and wanted to at least get some information.
So today we visited a show home and had a very pleasant conversation with an employee of a fairly well-known prefab house manufacturer (I’m not sure if I’m allowed or should post the name here).
We shared what we were looking for in an existing house, which also reflected our basic requirements for a prefab home. I also mentioned to the employee that on property websites like immowelt or my-next-home, new construction projects with land are often offered, since we don’t have a plot ourselves.
The employee took notes on our wishes.
Between 130 and 150 sqm (1,400 and 1,615 sq ft)
Plot between 400 and 600 sqm (4,300 and 6,450 sq ft)
Basement
Underfloor heating
Painter/turnkey delivery
We didn’t express any specific wishes regarding balconies, bay windows, or similar features; it was mainly an initial conversation for information. We don’t want a townhouse but rather a fairly “normal” one-and-a-half-story house with a pitched roof.
Our total budget was stated as 250,000 euros (about $270,000). The employee said that “you can do something with that” regarding what we imagined and that he could provide a non-binding offer.
After reading around a bit here, though: is this even realistic? Can we seriously plan to get a house with a plot in this size range within that budget?
According to the employee, all costs would be covered in this offer, including property taxes, additional construction costs, and site costs.
I would really appreciate your opinions...
Best regards
If the sales representatives at model home parks, trade fairs, or similar events were to start with realistic figures right from the first contact, almost all customers would walk away immediately. From my experience at such meetings, the main goal is usually to get your contact details, so they can later delve deeper into planning and cost calculations. As mentioned above, if the salesperson had told you right away that nothing would be possible for under 350,000 (price unit), you would have received an honest answer but politely said goodbye and thanked them for the information, leaving the salesperson without anything to build on. Since home planning is so individual, a reliable cost estimate cannot simply be done in 30 minutes. Building experts can surely provide countless examples of customers who made disappointed faces after the first rough cost estimate and then disappeared for good.
Best regards,
Ronny
Best regards,
Ronny
Hello BratacDD,
To me, the purpose behind this strategy is somewhat unclear. What benefit does the seller have in first attracting the customer and securing an offer including a second meeting, only to reveal the actual figures then, which only at that point become discouraging for the customer?
Regards, Campino
To me, the purpose behind this strategy is somewhat unclear. What benefit does the seller have in first attracting the customer and securing an offer including a second meeting, only to reveal the actual figures then, which only at that point become discouraging for the customer?
Regards, Campino
Hello Campino, as the planning progresses, you gradually become more and more attached to the house building project. And then you are quietly introduced to the full figures. But by that time, you are usually so far into the planning that there are only two options left. Either you build with this provider, or you give up entirely because the bank is not willing to support the project.
f-pNo schrieb:
One more note about building a house with the land purchase through the SAME provider:
Keep in mind that in this case you pay the property transfer tax on the total sum (land + house). This can lead to a significant increase in additional costs. As far as I know, it is currently 5.50% in Saarland.
However, there are also providers who find a plot of land for you from a municipality or similar. You then buy the land directly from the municipality and only use the (often free) land search service – of course, these companies only do that if they are reasonably sure they will get your signature.The seller/employee mentioned that as well. In that case, I am not buying the land together with the house. The company does not offer that. They only have some priority rights on certain plots where new builds are planned through this provider. He also offered that if we see a plot and are unsure whether it’s for sale, we can tell him where it is. He would then find out who owns it and possibly make an offer. However, this is a method I would personally not use.
But the issue of higher property transfer tax when the land is sold TOGETHER with the house, which he pointed out to us, is well known. Still, thanks for the advice.
A
AallRounder16 Sep 2013 07:24It’s not quite that simple with saving on real estate transfer tax:
There must be two separate transactions, which the tax authorities also recognize as such. In many cases, even when separating the land purchase and house construction, a single unified transaction is assumed and taxed as a whole. Many clever people have been caught out by this. For example, take a look at the Federal Fiscal Court ruling from September 27, 2012 – II R 7/12, Federal Tax Gazette II 2013, page 86.
There must be two separate transactions, which the tax authorities also recognize as such. In many cases, even when separating the land purchase and house construction, a single unified transaction is assumed and taxed as a whole. Many clever people have been caught out by this. For example, take a look at the Federal Fiscal Court ruling from September 27, 2012 – II R 7/12, Federal Tax Gazette II 2013, page 86.
B
Bauexperte16 Sep 2013 11:28Hello Dead Hosen fan,
But – I’m almost certain that this provider has “Red,” “Blue,” or alternatively “Green” in their logo; the first is a franchise, the others are grouped under a larger parent company within a holding. All of them advertise – especially the red one – that they support the “little guy.” However, once an offer is on the table and you want to include some extras (which for most are not really optional), they all approach the usual building costs.
Single-family house, 140 sqm (1500 sq ft) living area as a KfW 70 efficiency house: 196,000 EUR (on slab foundation; building costs are somewhat lower in Saarland’s outer districts)
Additional construction costs: 35,000–40,000 EUR
Painting work included: 10,000 EUR
Floor coverings included: 10,000 EUR
Reserve for extras: 10,000 EUR
Detached garage 3 x 9 m (10 x 30 ft): 10,000 EUR
This makes a total budget of about 321,000 EUR
Be careful with the real estate transfer tax, as the user “Allrounder” has rightly pointed out. It’s not so simple; there are quite a few municipalities that only give up on charging the 5% on both the house and plot if at least half a year passes between the land purchase and the house construction. So be sure to research this, too.
On the other hand, with this budget, you likely won’t be able to make an existing property habitable either. So this is a calculation exercise to determine what is more cost-effective for you, since some existing homes have their own charm.
Best regards,
Bauexperte
Campino schrieb:I don’t know how it is in Saarland, but here I get feedback from people interested in new builds that the existing property market is pretty much picked over, and the houses still available are either significantly overpriced or require major renovation. You should look into this carefully and possibly allocate a large part of your budget for financing if you decide on an existing property.
My partner and I are planning to move out of renting soon and get our own place. Until now, the plan was to buy a relatively new house. However, I didn’t want to completely rule out the possibility of building new and at least wanted to gather some information.
But – I’m almost certain that this provider has “Red,” “Blue,” or alternatively “Green” in their logo; the first is a franchise, the others are grouped under a larger parent company within a holding. All of them advertise – especially the red one – that they support the “little guy.” However, once an offer is on the table and you want to include some extras (which for most are not really optional), they all approach the usual building costs.
Campino schrieb:Plot 500 sqm (5400 sq ft): 45,000 EUR
Between 130 and 150 sqm (1400–1600 sq ft)
Plot size between 400 and 600 sqm (4300–6500 sq ft)
Basement
Underfloor heating
Painter/turnkey
We had no other special requests regarding balconies, bay windows, or anything else; it was rather an initial conversation for information. It’s not supposed to be a city villa, but a relatively “normal” one-and-a-half-story house with a pitched roof.
Our total budget was 250,000 euros.
I might have forgotten to mention that we want to build in Saarland, and the plot should not be near larger cities like Saarbrücken, Saarlouis, or Perl. Plot prices in Saarland average about 90 euros per sqm (9 USD per sq ft), but the plot we are looking for (area-related) would likely be slightly below average.
Single-family house, 140 sqm (1500 sq ft) living area as a KfW 70 efficiency house: 196,000 EUR (on slab foundation; building costs are somewhat lower in Saarland’s outer districts)
Additional construction costs: 35,000–40,000 EUR
Painting work included: 10,000 EUR
Floor coverings included: 10,000 EUR
Reserve for extras: 10,000 EUR
Detached garage 3 x 9 m (10 x 30 ft): 10,000 EUR
This makes a total budget of about 321,000 EUR
Be careful with the real estate transfer tax, as the user “Allrounder” has rightly pointed out. It’s not so simple; there are quite a few municipalities that only give up on charging the 5% on both the house and plot if at least half a year passes between the land purchase and the house construction. So be sure to research this, too.
Campino schrieb:Sure, if they simply reduce essential items like the typical additional construction costs to public fees. On paper, it looks good; you will have to refinance later, which is often worse.
The employee said that “you can definitely do something with that,” which we imagined, and that he would make us a non-binding offer.
Campino schrieb:No, not really, as you can see from the cost estimate above – even though, as mentioned, the outer districts of Saarlouis are somewhat cheaper.
After reading a bit here, is this even realistic? Can we seriously plan to get a house with a plot of this size with this budget?
On the other hand, with this budget, you likely won’t be able to make an existing property habitable either. So this is a calculation exercise to determine what is more cost-effective for you, since some existing homes have their own charm.
Campino schrieb:Then ask him to provide that in writing...!
According to the employee, this offer supposedly covers all costs, including property taxes, additional construction costs, or site management fees.
Best regards,
Bauexperte