ᐅ Experience with negotiating the price of a solid (monolithic) house?
Created on: 29 Feb 2012 13:35
M
miaHello everyone,
we have decided on a concrete (solid) construction and have received an offer for it. Next, we will have the building specification reviewed by the consumer advice center, and if everything is okay, we plan to sign a contract (which we have not received yet).
Now my question:
The offer states that these are fixed prices and, for fairness, every customer gets the same price (yeah, sure...).
To what extent is there still room to negotiate the price? Where is the best place to start, and what/how much is considered "normal"?
What have been your experiences with negotiating?
Thank you very much!!!
Mia
we have decided on a concrete (solid) construction and have received an offer for it. Next, we will have the building specification reviewed by the consumer advice center, and if everything is okay, we plan to sign a contract (which we have not received yet).
Now my question:
The offer states that these are fixed prices and, for fairness, every customer gets the same price (yeah, sure...).
To what extent is there still room to negotiate the price? Where is the best place to start, and what/how much is considered "normal"?
What have been your experiences with negotiating?
Thank you very much!!!
Mia
B
Bauexperte29 Feb 2012 13:43Hello Mia,
If you think about it logically, there are only two possibilities.
1. Your builder offers you a discount greater than 1.5% of the construction cost; then they have already taken advantage of you in the initial offer. Would you still want to sign the contract after that, regardless of consumer advice?
2. Your builder explains their fixed price (calculation based on actual quantities) and offers you a discount of up to 1.5%. If the result of consumer advice then matches your expectations or gut feeling, what would stop you from signing the contract?
Kind regards
mia schrieb:
The offer states that these are fixed prices and, for the sake of fairness, every customer pays the same price (yeah, right...). To what extent are there still possibilities to negotiate the price? Where is the best place to start, and what amount is considered "normal"?
If you think about it logically, there are only two possibilities.
1. Your builder offers you a discount greater than 1.5% of the construction cost; then they have already taken advantage of you in the initial offer. Would you still want to sign the contract after that, regardless of consumer advice?
2. Your builder explains their fixed price (calculation based on actual quantities) and offers you a discount of up to 1.5%. If the result of consumer advice then matches your expectations or gut feeling, what would stop you from signing the contract?
Kind regards
Thank you for the reply, building expert.
That sounds reasonable, but you do often hear that there is some room for negotiation – if not on the price, then perhaps on higher-quality finishes? Or something else I’m not thinking of right now? Maybe someone can share their experience on this.
Best regards!
That sounds reasonable, but you do often hear that there is some room for negotiation – if not on the price, then perhaps on higher-quality finishes? Or something else I’m not thinking of right now? Maybe someone can share their experience on this.
Best regards!
H
Häuslebauer4029 Feb 2012 18:37The building expert is basically right. Nobody gives away anything for free, and if generous discounts are offered voluntarily, it usually means you were either overcharged earlier or the quality is being compromised.
Since craftsmen and employees on the construction site tend to share insider information, you can sometimes learn quite a bit, and the profit margins on materials can be quite large, with profit maximization being a top priority. However, it’s important to remember that developers and construction companies are primarily profit-oriented businesses. They don’t work for fun but to make money. The seemingly large “net profit” that a builder earns from a house quickly diminishes once taxes, employees, materials, subcontractors, and other operating expenses are paid. Especially if something goes wrong, some builders can definitely miscalculate.
On the other hand, as is the case everywhere, a little wiggle room is usually possible. Maybe not to the extent seen in other industries, but some adjustment can be made. However, not in the way that you get a final quote presented and then ask, “What can you do with the price now?” This requires a bit more negotiation skill and involves give-and-take on both sides.
For example, we initially had our house planned exactly to our wishes without setting a specific limit (which we did have clearly defined for ourselves). As expected, the result was much too expensive. Gradually, together with the seller, we approached our target price by adjusting floor plans and features.
It was during these adjustments that real negotiations took place. This took a few days but still proceeded very calmly. It involved back-and-forth exchanges, something like this:
Still too expensive for us. Important note: The house is never too expensive; it’s always the builder’s limited budget.
We agreed to remove something to lower the price, and in return, we added something else, while some extras could be included free of charge, and so on. It’s a longer process, but in the end, all parties were satisfied. We got the house we wanted, and the builder received the money they needed.
Since craftsmen and employees on the construction site tend to share insider information, you can sometimes learn quite a bit, and the profit margins on materials can be quite large, with profit maximization being a top priority. However, it’s important to remember that developers and construction companies are primarily profit-oriented businesses. They don’t work for fun but to make money. The seemingly large “net profit” that a builder earns from a house quickly diminishes once taxes, employees, materials, subcontractors, and other operating expenses are paid. Especially if something goes wrong, some builders can definitely miscalculate.
On the other hand, as is the case everywhere, a little wiggle room is usually possible. Maybe not to the extent seen in other industries, but some adjustment can be made. However, not in the way that you get a final quote presented and then ask, “What can you do with the price now?” This requires a bit more negotiation skill and involves give-and-take on both sides.
For example, we initially had our house planned exactly to our wishes without setting a specific limit (which we did have clearly defined for ourselves). As expected, the result was much too expensive. Gradually, together with the seller, we approached our target price by adjusting floor plans and features.
It was during these adjustments that real negotiations took place. This took a few days but still proceeded very calmly. It involved back-and-forth exchanges, something like this:
Still too expensive for us. Important note: The house is never too expensive; it’s always the builder’s limited budget.
We agreed to remove something to lower the price, and in return, we added something else, while some extras could be included free of charge, and so on. It’s a longer process, but in the end, all parties were satisfied. We got the house we wanted, and the builder received the money they needed.