ᐅ Planning a Single-Family Home with a General Contractor, Architect, or Similar Professional
Created on: 14 Mar 2015 09:33
P
Payday
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)?
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)?
B
Bauexperte15 Mar 2015 11:37Hello,
John Ruskin (1819-1900), English writer, art critic, and social philosopher
Regards, Bauexperte
Payday schrieb:I have been doing this job for many years, and several things immediately come to mind that I could comment on regarding your statements here. I will refrain from doing so and instead ask you a very simple question: why haven’t you already signed with the highly praised provider?
It always seems to me that some people are really jealous that others can build more cheaply...
Payday schrieb:"It is unwise to pay too much, but it is even worse to pay too little. When you pay too much, you lose a little money—that is all. When you pay too little, sometimes you lose everything, because the thing you bought was unable to do the thing it was bought to do. The law of economics forbids getting something for nothing."
The actual question here was whether one can get a simple house without many extras cheaper from an architect than from a general contractor.
John Ruskin (1819-1900), English writer, art critic, and social philosopher
Regards, Bauexperte
Bauexperte schrieb:
Hello,
Then you are probably new to our profession, otherwise you wouldn’t write this statement
It is not new to combine material and installation costs into one total.
PS: You mention in this thread that you are a house salesperson; why isn’t this information included in your profile?
Regards, BauexperteDue to my age, more than 12 years in sales and 6 years as a bricklayer before that were not possible. I can send you several bills of quantities by email where important structural details are omitted, but that might be different in your region.
Regarding the 35,-, I meant material only in this case; that price would be far too low for both material and installation.
I simply haven’t completed my profile yet; it’s no secret. I will update it when I have the chance...
B
Bauexperte15 Mar 2015 12:46Hello,
However, I know where these contracts fall short and can explain this—if requested by the interested party. I assume a salesperson with 12 years of experience can do that too, and that they know that what is not explicitly described is considered not included. But certainly no statement like: "Even I, as a home salesperson, still don’t know what you actually get after reading the scope of work because it simply isn’t included!"
Regards, Bauexperte
Lars881 schrieb:No, it is not any different in NRW or anywhere else in Germany; through my second line of business, I know enough construction contracts to judge this.
More than 12 years in sales and before that 6 years as a bricklayer were not possible due to my age. I can send you several specifications by email, in which essential structural points are omitted, but that may be different in your region.
However, I know where these contracts fall short and can explain this—if requested by the interested party. I assume a salesperson with 12 years of experience can do that too, and that they know that what is not explicitly described is considered not included. But certainly no statement like: "Even I, as a home salesperson, still don’t know what you actually get after reading the scope of work because it simply isn’t included!"
Lars881 schrieb:Good. Thanks!
I just haven’t completed my profile yet, it’s no secret. I’ll do it at some point...
Regards, Bauexperte
Personally, I understand what they are building, but it’s simply not stated anywhere.
The most common example would be: "All load-bearing walls are constructed using solid building methods."
And the others? Sometimes it’s mentioned in passing under drywall in a completely different section, but in some cases, it’s missing altogether. By the way, I have this in writing, and from my perspective, this is not an insignificant point.
To get back to the topic, you can drive a Dacia or a BMW; both have four wheels and a steering wheel. In the author’s opinion, however, the difference lies only in profit margins and possibly trim or other interchangeable parts.
Good luck with the build...
The most common example would be: "All load-bearing walls are constructed using solid building methods."
And the others? Sometimes it’s mentioned in passing under drywall in a completely different section, but in some cases, it’s missing altogether. By the way, I have this in writing, and from my perspective, this is not an insignificant point.
To get back to the topic, you can drive a Dacia or a BMW; both have four wheels and a steering wheel. In the author’s opinion, however, the difference lies only in profit margins and possibly trim or other interchangeable parts.
Good luck with the build...
The price can be discussed now.
We don’t know whether this is based on a personalized offer that takes all trades into account.
No construction company gives anything away for free. Dumping prices of 120,000 can, for example, mean that in the house version mentioned above, the gable is not solid but built with a lightweight frame. In that case, the price offered for the brick cladding on the website only applies to the ground floor, and the gable on the upper floor would be wood paneling (not the best quality wood).
This is just one example among many.
Another example would be a reduced interior finish (for instance, the electrical installation is clearly insufficient).
Whether subcontractors or employed workers show enthusiasm when paid very little or contracted at a low price is questionable — if the client doesn’t care… at least the hired experts (surveyors) probably won’t check every single screw a low-paid helper fastened casually.
As mentioned above: it is possible to build more cheaply in northern Germany, but if you buy various extras cheaply, it will cause problems elsewhere.
@Payday You should create a proper cost calculation. A kitchen should not be included in the additional construction costs and is usually not financed.
Moreover, it is also becoming difficult nowadays to find a bank willing to finance a house without external landscaping. At least the access paths and edge strips should contribute to the property's value.
Those costs have to be considered as well. Your so-called budget of "45,000 (including kitchen)" cannot cover everything.
And the borrowed money from your father could already be spent by the time you get to the overdue electrical outlets and bathroom fixtures that are not included in the scope of work. Because you can’t simply replace a bathtub later with a new, larger one.
If your calculations work out — that’s great for you… and I don’t think this is about envy (jealousy wouldn’t be the right word) when people warn you here. You don’t even know each other!
Regards,
Yvonne
We don’t know whether this is based on a personalized offer that takes all trades into account.
No construction company gives anything away for free. Dumping prices of 120,000 can, for example, mean that in the house version mentioned above, the gable is not solid but built with a lightweight frame. In that case, the price offered for the brick cladding on the website only applies to the ground floor, and the gable on the upper floor would be wood paneling (not the best quality wood).
This is just one example among many.
Another example would be a reduced interior finish (for instance, the electrical installation is clearly insufficient).
Whether subcontractors or employed workers show enthusiasm when paid very little or contracted at a low price is questionable — if the client doesn’t care… at least the hired experts (surveyors) probably won’t check every single screw a low-paid helper fastened casually.
As mentioned above: it is possible to build more cheaply in northern Germany, but if you buy various extras cheaply, it will cause problems elsewhere.
@Payday You should create a proper cost calculation. A kitchen should not be included in the additional construction costs and is usually not financed.
Moreover, it is also becoming difficult nowadays to find a bank willing to finance a house without external landscaping. At least the access paths and edge strips should contribute to the property's value.
Those costs have to be considered as well. Your so-called budget of "45,000 (including kitchen)" cannot cover everything.
And the borrowed money from your father could already be spent by the time you get to the overdue electrical outlets and bathroom fixtures that are not included in the scope of work. Because you can’t simply replace a bathtub later with a new, larger one.
If your calculations work out — that’s great for you… and I don’t think this is about envy (jealousy wouldn’t be the right word) when people warn you here. You don’t even know each other!
Regards,
Yvonne
Payday schrieb:
But before a neighbor ends up owning a house like that themselves and you regret that they’re paying 500€ (about $540) less per month in financing, you prefer to talk it down as if it’s a rundown property and better to stay renters. Anyone who builds cheaply knows they have to make compromises somewhere. And if that means a longer construction period, so be it. Still, you can get reasonable quality for a low price. Yes, apparently all the home builders in this forum have no clue and unfortunately spent more. But you’ve got it figured out and can show us how it’s really done. So go ahead!
No, seriously. I think that’s wishful thinking. In my opinion, the budget is way too tight.
If so many buyers have built with your preferred option—that’s great. Go visit them, kindly ask if they can share their building experience. Ask about the square meters and what they paid. If you show genuine interest and ask politely, most people are happy to talk about their building journey. You get a good sense of the provider—what worked well, what didn’t, and whether it was affordable.
We also built with the small company around the corner. The price differences between providers were at most 3% for the same specifications. That included well-known large companies and small two-person firms. That cliché about cutting all extras to get a huge bargain—you can forget about that.
I hope you keep researching carefully and stay cautious before signing anything.
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