ᐅ Buy a plot with a house or have it demolished by the real estate agent

Hello everyone,

A plot of land is being offered for 68k (1300 m² / 14,000 sq ft) with a rundown house on it.
The real estate agent, who is also the owner, has a demolition estimate of 14k.
He offered to sell me the land for 55k, and I would arrange the demolition myself.
This way, I would save on the property transfer tax for the demolition.
There are no agent fees because of self-ownership.

What do you think about this? The utility connections are already in place and therefore do not need to be completely reconnected.

That's how it's done. You could ask Abbruch Jakob if he could manage with 14 as well.

Ask a demolition contractor what they charge.

I have major concerns about the condition. In the end, there is contaminated material.

It would be better to buy the property free of encumbrances.

hegi___ schrieb:

A plot of land is being offered for 68k (1300m² (14000 sq ft)) with a dilapidated house on it.
The real estate agent, who is also the owner, has a demolition estimate of 14k.
He offered to sell me the land for 55k and I would arrange the demolition myself.
This way, I would save the property transfer tax on the demolition.
There are no agent fees because it is an in-house sale.

Comparison calculation based on 6.5% property transfer tax:

68,000€ land price + 6.5% property transfer tax + 2% notary/court fees = 74,000€

55,000€ land price + 6.5% property transfer tax + 2% notary/court fees = 60,000€ plus 14,000€ demolition = 74,000€

Who benefits?
The agent, because instead of 68,000€ minus 14,000€ = 54,000€, he receives 55,000€ from you without any risk or effort for the demolition.
You take on the risk and the work.
Deal? I don’t think so.

Another disadvantage of his proposal: the lower purchase price of the land may be used by the bank to determine the mortgage lending value. Lower land price = lower lending value = higher interest rate. The land registry values will also be influenced by the lower purchase price.

Moreover, it is questionable whether the demolition offer is genuine and what exactly it includes. Will the site be backfilled, how deep, and with what material? In the worst case, he just leaves a hole that you have to fill yourself; in the worst scenario, he backfills with unsuitable material just to keep costs down, and all that will need to be removed and the site properly re-filled for your house construction.

I would get an offer for demolition including backfilling that matches the requirements of the planned house. Deduct the cost from the purchase price, minus another 3,000€. This should cover your risk and effort.

And once again, I would not demolish or fill in anything speculatively, or at least not before the foundation design for the new building is clear. It’s better to have everything done in one go to benefit from synergies.

So, there was a mistake on my part. The plot is being offered for 69k.
Basically, I save 14,000 € x 0.085 = 1,120 €.
The rest are really good suggestions.
I will receive the demolition contractor’s offer tomorrow.

The problem is that we have been searching for a year, and this is the only plot available on the market in our region (Saarland).

We will discuss everything with the construction company and take it from there.

Furthermore, there are two plots, one of which has been reclassified as land suitable for development. It might be possible to apply for reclassification on the other plot and, if approved, sell it.