ᐅ Planning a Single-Family Home with a General Contractor, Architect, or Similar Professional

Hello,

after deciding against the half-finished house (shell construction with roof and windows – some will know what I mean), we have now reached the goal of having a new single-family home built.
We have already obtained some more concrete offers and know that we will manage with our budget.

The budget looks as follows (provisional bank approval, no contract yet, etc.):
€50,000 (approximately $54,000) own equity from €70,000 (approximately $76,000) available
€50,000 (approximately $54,000) KfW loan
€150,000 (approximately $162,000) mortgage

The plot costs €52,000 (approximately $56,000) for 580 sqm (about 6,240 sq ft) plus €4,500 (approximately $4,860) incidental costs (notary + property transfer tax) = own equity.

This leaves €200,000 (approximately $216,000) for the entire house including all incidental costs (including kitchen and carport) and €5,000 (approximately $5,400) special reserve (+€15,000 (approximately $16,200) additional own equity).
The plan is for a “turnkey” house priced at €155,000 (approximately $168,000) plus €4,500 (approximately $4,860) incidental costs (Note: property transfer and notary fees are not included here).
When I flip through catalogues, I hardly find any providers offering something at this price. The materials are not even the problem; it seems more about the enormous profit margins?!

We have also driven through the new development areas nearby and looked at the houses/signs. We have some smaller general contractors here (as in other places apparently). Some have been around for a long time, about 15–20 years. The management usually consists of two people (one practical, one theoretical), plus a bunch of craftsmen.
What do you think of such companies? The direct contact with the customer is probably much closer than with a large company, but what about price and reliability (completion guarantee/bond)?

I don’t quite understand this – at first, you say you are confident your budget will cover everything because you have obtained quotes (which I can hardly imagine with that budget), but then you say the major suppliers are all too expensive and you’re not sure if the smaller ones have reasonable prices...

So, which is it?

150,000 euros for the entire house? How many square meters are you planning?

The profit margins exist because a) it’s currently doable, b) the business risk must be covered, and c) the calculations are never 100% accurate, sometimes only about 95%.

I have two offers from larger companies that could be within budget. However, there is hardly any opportunity to influence the process, and you probably don’t get the best value for your money. Especially with bathrooms and sanitary installations, a large part of the cost seems to be just the markup. Online, most bathroom fixtures cost about half the price. Someone will still install them; there are plenty of tradespeople looking for jobs on well-known platforms (e.g., MyHammer). Does anyone have experience with MyHammer? The basic installation can also be done by the general contractor’s appointed team.

I am particularly interested in experiences with smaller companies where the management is also directly involved in the execution. There are already plenty of houses built by them; in the new development area, you can see their signs on many plots. Where we want to build, about 10 finished houses currently stand, and another 10 to 15 are under construction. However, the companies that build or have built there can be counted on one hand. You might think they bought the land to sell it again (and advertise), but only one of the houses is actually for sale.

We are planning a simple single-family home with 1.5 stories, 120 sqm (1,292 sq ft) according to the living space regulation, with a few extras like a fireplace and full underfloor heating. The large bathroom will include the provision for a sauna, which we plan to purchase in 1–2 years from savings. We mainly want to save by choosing a simple building design and a straightforward floor plan. We want to use durable exterior materials that all have a long lifespan (glazed roof tiles, fully clad masonry, plastic soffits, etc.).

Most money is spent on extravagant features like large sliding doors that separate rooms, bay windows, etc. We do not want to include any of that.

Oh, and of course, a basement is not included in the price!

Payday schrieb:
€155,000 + €45 ancillary costs

In northern Germany, this is feasible for a simple single-family house of 120 sqm (1,290 sq ft). Also as a turnkey solution. However, 90% of the time, “turnkey” does not include painting or flooring. These are usually no longer offered by general contractors. Carport, garage, driveway, and garden landscaping are also definitely not included in that price!

Payday schrieb:
the huge profit margins

Not really, profit margins in this price range aren’t that high. It’s more about volume and additional costs you haven’t factored in yet.

Payday schrieb:
there are enough tradespeople trying to find jobs on well-known platforms (e.g. MyHammer)

Then you won’t have any warranty. A bathtub isn’t just the tub itself, but also all the installation materials, supports, insulation, etc. The same goes for the toilet (flush mechanism, mounting brackets, pre-wall installation)... all of this is included in a general contractor’s house, along with the warranty.

Payday schrieb:
the companies that have built there can be counted on one hand

But you only need one... a good one.

Payday schrieb:
extras like fireplace and underfloor heating complete

... you can forget about that with a budget of 150,000!

Payday schrieb:
We want to use good exterior materials, all with a long lifespan (glazed roof tiles, fully faced masonry, plastic roof soffits, etc.)

... you can forget about that too. All of this costs extra and counts as expensive add-ons, which others often only finance by carefully weighing what’s possible and what’s not.

We don’t know how you arrived at your budget limit. We also don’t understand how you can expect to cut costs at the lowest house price while thinking about glazed roof tiles. Apparently, you’ve seen yourself from catalogues what such a house can cost.

But one thing I do know: you should spend some time browsing the forum to get a feel for house prices and all the additional costs that can come up.

Regards, Yvonne

Payday schrieb:

When I browse through the catalogs, I hardly find any providers offering something at this price. The material isn’t even the problem, but rather the enormous profit margins, right?

Actually, both the materials and the labor need to be paid for. Additionally, there are costs for office expenses, vehicles, insurance, and so on.
Profit margins typically range from about 5% (which usually means the budgeting didn’t work out so well) to 15% (a realistic average) and up to 20% (which is either an upper outlier or a well-calculated margin).
In my opinion, these are reasonable margins that are sustainable — after all, the contractor takes on significant business risk and also has to prepare for retirement.

Regarding your budget expectations: you will have to make significant compromises on what you want if you want it to work.