Hello everyone!
There is one question that just won’t let me go, and that is about the budget.
It’s clear that you usually plan with an approximate amount in mind.
Since we are about to start building with an architect, I am often shocked when I read things like, “The budget increased from 400k to 800k”?! I wonder, doesn’t that mean financial disaster for some people?
You plan based on a certain amount that you finance, and if that amount suddenly doubles, won’t the entire financing collapse?
Sure, I mean exceeding the budget by 10% is still manageable, but doubling it?
So my question is: What options are there to actually cap the budget?
Put it in a contract? Not choose an architect at all, but rather a general contractor? Or what else is possible?
For me, it’s just hard to understand how a professional can misjudge construction costs so drastically, as described above – I do wonder if such a person shouldn’t have chosen a different profession.
Thanks in advance for your opinions on this.
There is one question that just won’t let me go, and that is about the budget.
It’s clear that you usually plan with an approximate amount in mind.
Since we are about to start building with an architect, I am often shocked when I read things like, “The budget increased from 400k to 800k”?! I wonder, doesn’t that mean financial disaster for some people?
You plan based on a certain amount that you finance, and if that amount suddenly doubles, won’t the entire financing collapse?
Sure, I mean exceeding the budget by 10% is still manageable, but doubling it?
So my question is: What options are there to actually cap the budget?
Put it in a contract? Not choose an architect at all, but rather a general contractor? Or what else is possible?
For me, it’s just hard to understand how a professional can misjudge construction costs so drastically, as described above – I do wonder if such a person shouldn’t have chosen a different profession.
Thanks in advance for your opinions on this.
Hi,
Yep, that’s basically the only option if you really want certainty.
Cases of the budget doubling are probably rather the exception, but unfortunately, you only find that out with an architect afterwards.
Best regards,
Andreas
alegend schrieb:
Don’t choose an architect at all but a general contractor instead?
Yep, that’s basically the only option if you really want certainty.
Cases of the budget doubling are probably rather the exception, but unfortunately, you only find that out with an architect afterwards.
Best regards,
Andreas
Well, doubling the cost from 400k to 800k does seem quite extreme...
You can shift the risk by paying someone else to bear it. You already mentioned the general contractor (GC). You can also combine an architect and a GC; you don’t necessarily have to go with individual contracts (though working directly with an architect might offer some cost-saving opportunities).
By the way, an architect can also be held liable. Just look this up yourself—links are not allowed here. It’s also possible to agree on cost guarantees with architects, although not everyone does this.
Otherwise, any calculation will fall apart if you upgrade your choices or intentionally exceed the set budget. If you initially plan with standard building materials but end up installing high-end fixtures with Swarovski elements, the budget will naturally have increased to match your new requirements.
However, there are some unknown factors that can unexpectedly increase costs. Excavation work or more extensive foundation requirements are often mentioned. A soil report can help reduce these surprises (though it obviously can’t turn swampy land into prime building land).
You can shift the risk by paying someone else to bear it. You already mentioned the general contractor (GC). You can also combine an architect and a GC; you don’t necessarily have to go with individual contracts (though working directly with an architect might offer some cost-saving opportunities).
By the way, an architect can also be held liable. Just look this up yourself—links are not allowed here. It’s also possible to agree on cost guarantees with architects, although not everyone does this.
Otherwise, any calculation will fall apart if you upgrade your choices or intentionally exceed the set budget. If you initially plan with standard building materials but end up installing high-end fixtures with Swarovski elements, the budget will naturally have increased to match your new requirements.
However, there are some unknown factors that can unexpectedly increase costs. Excavation work or more extensive foundation requirements are often mentioned. A soil report can help reduce these surprises (though it obviously can’t turn swampy land into prime building land).
D
daniels8719 Sep 2016 20:50I agree as well: have the building plot and contracts reviewed by an expert or appraiser, and budget generously for additional construction costs. Calculate realistically, not with the mindset of "a friend will do it for me" or "15€ laminate flooring will be enough."
H
HilfeHilfe20 Sep 2016 07:33Even with a general contractor (GC), you can face unpleasant surprises. However, a good GC will usually provide a solid estimate. Hiring individual contractors doesn’t always work out well, especially now when the market is booming.
From my experience, everyone I know who built a custom architect-designed house wanted something unique. Almost all of them had problems with extra costs or coordination, and later I found the houses somehow felt quite cookie-cutter :p
It seems that houses built by GCs had fewer issues overall.
From my experience, everyone I know who built a custom architect-designed house wanted something unique. Almost all of them had problems with extra costs or coordination, and later I found the houses somehow felt quite cookie-cutter :p
It seems that houses built by GCs had fewer issues overall.
First, I should mention that the plot is a parcel in a new development area that is already about 70% built up – so I’m not expecting swampy ground :-) Rather, more rocky terrain on a slope.
A soil survey costs around 1000 euros (based on what I’ve found out), and I would definitely go ahead with that – especially since a borehole for geothermal energy is planned....
Regarding additional construction costs... this also includes the architect’s budget. I tend to underestimate and always calculate worst case. But some factors I can’t estimate, such as soil removal, as I have no experience with that.
However, I have included it in the model calculation and will correct it once I find someone who can give me reliable figures.
We have already communicated our budget to the architect, who was quite surprised but said that compromises will have to be made.
The fact is, we don’t want to pay long-term fees on the house, and we also place great value on other things in life, so the budget is somewhere between 320,000 and 380,000 euros, including additional costs and the architect (the plot is already paid for and not included in this budget).
The house is not intended to be very large – preferably smaller and of high quality, as there are only two of us and no plans for children.
These are the facts on the table – we told the architect 320,000 euros, and I explicitly stated that this is a fixed limit for us.
For additional costs, I have estimated:
Soil survey: 900.00 euros
Surveying: 2,600.00 euros
Building permit / planning permission: 800.00 euros
Membership fees for the Homeowners’ Protection Association: 184.00 euros
Construction supervision fees: 2,808.00 euros
Architect’s fees: 45,000.00 euros
Excavation for basement or slab: 6,000.00 euros
Soil removal: 5,000.00 euros
...making a total of about 65,000 euros – I’m still not quite sure if I will need a structural engineer since I plan to have the architect handle phases 1 through 9 of the project.
I still have to budget for an energy consultant.
So this is roughly how the additional costs currently look. The house is planned to have about 140 square meters (1505 square feet) of living space, with a shed roof, and since it is on a slope, basically only one level with a basement / utility cellar.
A KFW 55 or 40 energy standard should be achieved, but it still needs to be calculated whether pursuing KFW funding is worthwhile.
What do you think?
Regarding a general contractor, I think somewhat like the developers – they clearly try to cut costs everywhere for me, so I have reservations about building with a general contractor / developer, since there is an additional party in between who adds their profit margin...
A soil survey costs around 1000 euros (based on what I’ve found out), and I would definitely go ahead with that – especially since a borehole for geothermal energy is planned....
Regarding additional construction costs... this also includes the architect’s budget. I tend to underestimate and always calculate worst case. But some factors I can’t estimate, such as soil removal, as I have no experience with that.
However, I have included it in the model calculation and will correct it once I find someone who can give me reliable figures.
We have already communicated our budget to the architect, who was quite surprised but said that compromises will have to be made.
The fact is, we don’t want to pay long-term fees on the house, and we also place great value on other things in life, so the budget is somewhere between 320,000 and 380,000 euros, including additional costs and the architect (the plot is already paid for and not included in this budget).
The house is not intended to be very large – preferably smaller and of high quality, as there are only two of us and no plans for children.
These are the facts on the table – we told the architect 320,000 euros, and I explicitly stated that this is a fixed limit for us.
For additional costs, I have estimated:
Soil survey: 900.00 euros
Surveying: 2,600.00 euros
Building permit / planning permission: 800.00 euros
Membership fees for the Homeowners’ Protection Association: 184.00 euros
Construction supervision fees: 2,808.00 euros
Architect’s fees: 45,000.00 euros
Excavation for basement or slab: 6,000.00 euros
Soil removal: 5,000.00 euros
...making a total of about 65,000 euros – I’m still not quite sure if I will need a structural engineer since I plan to have the architect handle phases 1 through 9 of the project.
I still have to budget for an energy consultant.
So this is roughly how the additional costs currently look. The house is planned to have about 140 square meters (1505 square feet) of living space, with a shed roof, and since it is on a slope, basically only one level with a basement / utility cellar.
A KFW 55 or 40 energy standard should be achieved, but it still needs to be calculated whether pursuing KFW funding is worthwhile.
What do you think?
Regarding a general contractor, I think somewhat like the developers – they clearly try to cut costs everywhere for me, so I have reservations about building with a general contractor / developer, since there is an additional party in between who adds their profit margin...
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