ᐅ Searching for a Plot in Bonn. Questions About Purchasing Land.

Created on: 19 Jun 2013 12:26
G
GHeymann
Hello forum members,

After searching for a suitable construction method and project management for some time and having spoken with several companies, I find myself more uncertain than at the beginning!

I want to build a house near Bonn for my son. To do this, I have been looking for suitable plots through various real estate portals. Usually, the attractive plots are offered by developers. Here is my first question: some providers said that the advertised plot could only be purchased together with building a house from their company and requested that I sign a contract first. Others want at least an initial consultation before sharing detailed information about the plot. Is this approach even legally permissible? And if I sign such a contract, can I withdraw from it free of charge if I decide I don’t want the offered plots? (I am asking from a legal perspective, not from the companies’ point of view, where it is probably not possible or only with restrictions.)

The next topic that puzzled me a lot is the pricing structure. When I look at the offers I have, the price per square meter of living space varies from €1340.00 to nearly €1700.00 per m² (approximately $145 to $185 per sq ft). Depending on the provider, slightly more or fewer services are included, but not significantly. For example, with one provider, a foundation survey is included, and they use supposedly better materials. I read somewhere online that building a house in solid construction (standard pitched roof without basement, with mid-range fittings, 120–140 m² (1300–1500 sq ft) living space) should not cost a company more than €980.00 per m² (about $105 per sq ft) excluding VAT from equity capital. Accordingly, the “gross margin” for the companies would be between approximately €150.00 and €500.00 per m² (about $14 to $46 per sq ft). How can this be explained?

One provider explained to us that the basic house itself is not expensive, but most clients’ customization of fittings leads to considerable additional costs. That’s why they do not prescribe specific features but rather work with budgets. This way, as a customer, I can decide myself how expensive my tiles or bathrooms will be. If you deduct these packages, the actual house is not really expensive. I found this idea very interesting, and indeed the basic house is not “that expensive.” Unfortunately, this provider is rather in the upper mid-range, even with the option for package-based fittings.

Ultimately, I am now wondering whether it would even make sense to develop "our" house together with an architect and then carry out the tender process myself with project management support. That would be similar to the fittings package concept from one provider, but covering all parts of the house construction.

What do you think is a sensible approach? A developer who also takes responsibility for warranties, or project management where I might have to chase my requirements across various companies myself?

One more thing about security (which I also found interesting). Almost all companies offer various homebuyer protection packages. In my opinion, some of these are not worth the paper they are printed on. Only three companies work with well-known providers in this area. Some of these packages are additionally charged. However, one company includes homebuyer insurance (liability, etc.) and a warranty insurance with TÜV or DEKRA supervision in the basic house price. But a completion guarantee is also charged separately. Another company included a builder’s guarantee from R+V. If you use a developer, should you definitely opt for such a package?

Right now, I feel overwhelmed and can’t see the forest for the trees.

Any ideas, suggestions, help???

Many thanks and sunny days.

GHeymann
G
GHeymann
20 Jun 2013 21:58
Hello everyone responding,

First of all, wow, the feedback is coming quickly. Great.

Now, step by step. Basically, I am not a construction expert, but I have some understanding (thanks to friends and the internet) of the essential components of a construction and service specification. That’s why I am confused. Almost all offers are based, for example, on a slab foundation up to 25cm (10 inches), C25 concrete. Masonry KfW 70 standard, ranging from 36.5cm to 42cm (14 to 16.5 inches) depending on the type of bricks; no external thermal insulation composite system (ETICS)—which is important to me; Braas or Nelskamp concrete roof tiles; triple-glazed windows with a U-value of 0.9 to 1.0; some with air-source heat pumps and underfloor heating, others with gas condensing boilers combined with solar and underfloor heating. This is why I currently cannot really make a decision. The scope of work for a house (without “final interior features”) is not very different. Of course, every company claims to have the best bricks, the best windows, and the best heating system.
Bauqualle schrieb:
.. oh great .... then prefab house manufacturers and developers would be swimming in unlimited wealth .... forget it .... competition is fierce and ruthless in this sector ...

Well, if I assume 150m² (1,615 sq ft) and a company has a gross profit of 300.00€/m² (28 USD/sq ft) = 45,000.00€, not bad. Nevertheless, I don’t want to be misunderstood, fair service = reasonable price! I was just surprised by the differences between various companies. Also, no one reveals the cost per building element or trade. That would make it easier for me. Then I could compare the offers for the basic closed shell with screed, heating, sanitary, and electrical rough installations.
Bauqualle schrieb:
.. for non-experts, an enormous and unknown universe opens up .... just ask "Bauexperte," our moderator, for help ...

I have already looked at (Schenk Bauberatung). I will do that :-)
Bauexperte schrieb:
... That’s how I work too. Once I have an option on a plot—which is difficult enough, as plot owners usually think they can handle it better alone—I want to be rewarded with the house construction. I am not a real estate agent but a construction supervisor.

Makes sense.
Bauexperte schrieb:
The legal aspect—I am not a lawyer and cannot provide legal advice; this is reserved for legal professions in Germany—means you can only withdraw from such a contract if a right of withdrawal is explicitly stated and included in the contract.

I see it similarly, so it’s too risky for me. I have read quite a bit about the practices of a well-known prefab company!
Bauexperte schrieb:
I hope you can really read a construction specification (CS)? What is not included is considered not purchased!

See introduction ;-)
Bauexperte schrieb:
You can assume that a quality detached house in the KfW 70 efficiency class, built solidly, requires about €1,500.00/sqm (140 USD/sq ft) of living space. Soil reports are not included in the price per living space square meter.

So, can we assume that offers at €1,350.00/sqm (126 USD/sq ft) are cutting corners somewhere or the company has not been around long enough to survive the warranty period?!
Bauexperte schrieb:
With dialing code 067xx?

Company known? Green font on black background? If yes, what can you tell me about them? (Feel free to send a private message if this should not be discussed here.)
Bauexperte schrieb:
How much money are you willing to invest?

I think this is not the right place to discuss exact figures! I would put it this way: this is for my son (as mentioned at the beginning), and I will invest what is necessary for our idea of a house. Of course, the land should not be more expensive than the house. According to your cost example, such a house would cost about €220,000 to €240,000 (approximately 245,000 to 270,000 USD), which for me is definitely within reach (+ land, + additional costs).
Bauexperte schrieb:
Much more important is the choice of the truly important components in building a detached house: how thick is the slab foundation, which bricks are used, how is the roof constructed, which windows are installed, what technology ... etc. Which craftsmen are involved, how is the construction supervised, what guarantees does the builder offer ... etc. And very important: how is the advice and how is it handled after signing the contract? The range within these components goes from cheap to extremely expensive and only shows after moving in.

See introduction, but which companies will carry out the work, I cannot answer at this stage. I will definitely do construction supervision, whether with a developer or a construction supervisor. A good friend already convinced me of that! :-)
Bauexperte schrieb:
No, this is a typical misconception.

If you award through an architect—which does not mean it is a bad choice—you must tender all trades at least three times and have appropriate knowledge, if you do not want to be completely dependent on the architect’s success or failure.

Why three times? I could just “freely” invite all companies from the yellow pages for each trade, conduct meetings with an expert, and then decide. Does your construction consultancy not work this way? Or do you have fixed companies you work with?
Bauexperte schrieb:
BT means you purchase house and land from a single source and pay the price in a maximum of seven stages. You can influence the floor plans; the rest is handled by the BT; so, a more or less relaxed sit-back experience.

Yes, comfort is one side of the coin. But seven steps? So far, I have only seen or been explained payment schedules with significantly more stages.
Bauexperte schrieb:
Classic construction supervision—and I do not mean large nationwide providers or their salespeople—takes this work off your hands. For example, this is how we operate. We or our architect first look at the plot and then clarify the building regulations. Then we conduct consultation talks and plan the layout with our architect in the next step. While the drafts are being prepared, we decide among our possible builders—based on their proximity to the construction site and a full portfolio—which builder will build the house. With the second drafts, we usually present a fixed-price offer; the first draft often changes. Hitting the mark perfectly is very rare. Classic construction supervision accompanies a client from the first meeting until move-in and—if all goes well—even beyond. We live on recommendations 😉

That basically sounds good. Would you offer these (or parts of your) services also near Bonn or between Bonn and Cologne? Which companies do you collaborate with there? Surely it is possible to submit your own sketches or amateur plans?
Der Da schrieb:
Hello,

you did the first thing right. You are skeptical and question what you hear.
I write to you as a client, someone who has already made a decision about whom to build with.

First about these bundled offers... Only one thing I would recommend now, even though everything went smoothly for us: an external building supervisor. This is simply more objective and can argue differently. Normally, this role should be taken by our site manager, but he was a weakling and afraid to report defects, which I ended up doing myself.

Thanks for the real-world experience. External construction supervision certainly makes sense and is planned on my side as well. Here I have to praise two companies. In my opinion, they gave very fair advice regarding additional costs. Both included services like soil reports, surveying, and insurance packages. The consultants (or a consultant) openly told me I must bear the earthworks costs separately (the justification was understandable), and they pointed out additional costs such as utility connections, real estate agent, notary, landscaping, reserves for unplanned costs, etc. This leads to a considerable amount of additional costs. This is one reason to consider how I might optimize costs somewhat by self-contracting based on architectural plans and external site supervision.
Bauqualle schrieb:
.. that is not wrong, that is absolutely correct .. what on earth do the HOAI service phases have to do with this? You should read my post very, very carefully again .. thanks
emer schrieb:
That is also wrong. It depends on which service phases of the architect you use. If all phases, it will be more expensive. But especially the construction supervision phase is much more extensive, which drives up the price.

To both of you, right and wrong. Sorry, I did not express myself clearly here. So far, the idea regarding construction supervision was to have a house designed by a friend (who is not an architect!) and then have an architect handle the building permit, execution plans, and statics. Then have an independent expert conduct site supervision and possibly have DEKRA carry out an additional inspection. However, I almost fear this will not be much cheaper?!

@Bauexperte: I will be out of the country for a few days starting this weekend but would like to learn more about your construction consultancy. Feel free to contact me privately.

Best regards

Gerd Heymann
emer20 Jun 2013 22:15
Bauqualle schrieb:
.. that is not wrong, that is absolutely correct.. what do the service phases of the HOAI have to do with this? you should read my post very, very carefully again.. thanks

Of course the architect's service phases are relevant here. You don’t have to use all of them to complete a house with an architect. Utilizing all the services of an architect is much more extensive, and therefore more expensive. The cost savings when building with a contractor usually come from, for example, minimal site supervision or construction monitoring.

An architect-designed house does not necessarily have to be more expensive than a well-planned house from a builder. Or do you think that just because someone orders a house from a catalog, the usual architect fees are not subsidized as well...

Otherwise, I would seriously question the justification for architects, since every builder offers their customers the option to customize a catalog house. Using these options also drives the costs of such a house towards the costs of a custom-designed architect house.

The same house with the same level of service, regardless of the partner, does not differ significantly in price. I can read my statements as often as I want.
B
Bauqualle
21 Jun 2013 07:23
GHeymann schrieb:

I’m afraid that probably won’t actually be any cheaper?!?
.. it is really possible to build an affordable house .. just !!!! .. this requires an enormous amount of personal effort and is not easy, and since you are not a professional yourself, you need an extremely good expert ... as I already mentioned .... either you want a bicycle or a Maserati ... both serve the same purpose, only the costs are a bit different ... 🙄
B
Bauqualle
21 Jun 2013 07:48
emer schrieb:
Of course, the architect’s services phases are related to this.
.. NO! .. once again .. NO!!! you should carefully reread the previous text..
emer schrieb:
The cost savings from building with a contractor usually come from, for example, very minimal site supervision or project monitoring.
.. absolute nonsense ... what industry do you actually work in? Anyway, there is no point in debating your opinion and attitude because you are not an expert ...
B
Bauexperte
21 Jun 2013 11:24
Hello Gerd,
GHeymann schrieb:

No external thermal insulation composite system (ETICS) (this is important to me)
That already narrows down the options.
GHeymann schrieb:

By the way, no one ever reveals the costs per building component (trade). That would make it easier for me. Then I could compare providers for the basic shell including screed, heating, sanitary, and basic electrical installations.
This is because these are usually mixed calculations. If you want to see all trades broken down in detail, you should contract through an architect.
GHeymann schrieb:

I feel the same way; it’s too risky for me. I’ve read quite a bit about the practices of a well-known prefabricated house manufacturer!
If it is fairly and transparently formulated for the prospective builder, it’s a good concept. I also prefer working with planning contracts, but sometimes there’s no other way.
GHeymann schrieb:

So can we assume that with offers of €1,350.00 (EUR) somewhere is being cut at the wrong place, or the company won’t exist long enough to cover the warranty period?!
You could assume that, but that would be too simplistic since there are always two sides to the coin.

Some providers specialize consciously in catering to "bargain hunters"; the surprise usually comes after signing the construction contract. Some who overdo it—see IBG—end up in insolvency proceedings. You’d be amazed at the educational background of those who signed with this low-cost provider. (I know this because I have declined several offers to complete started construction projects.)

Other providers deliberately position their offer at the lower limit of the energy-saving regulations and technical requirements as a starting point for discussions. This is legitimate and not inherently problematic or doomed to fail but often feels expensive when it comes to buying additional services. The success of the building project depends largely on the choice of the executing general contractor—mostly franchisees.
GHeymann schrieb:

Known company? Green text on black background? If yes, what can you say about them? (Private message is fine if this topic should not be discussed here.)
Yep, that is exactly the provider.
GHeymann schrieb:

According to your cost example, such a house would cost about €220,000.00 to €240,000.00 (EUR). That is certainly feasible for me (+ land, + additional costs).
I always try to assess the mindset and attitude of potential builders early on; hence my question. Your answer shows me that you have a good understanding of what your project will cost.
GHeymann schrieb:

I will definitely do construction supervision, whether developer-led or through site management. A good friend has convinced me of this long ago! :-)
Good! That spares me lengthy repetitions 😀
GHeymann schrieb:

Why tender three times? I could simply send out invitations for each trade "randomly" to all firms listed in the yellow pages, conduct the discussions with an expert, and then decide.
I think you’re using informal language as is common online 😀 —but do you realize the time and costs (for the expert) involved? Quantity is not the solution; quality is. It’s sufficient to tender each trade about three times—from earthworks to final move-in, that's 16 trades plus architect, structural engineer, energy consultant, soil expert, surveyor, and construction supervision. The architect must prepare the bills of quantities so the requested services are verifiable and comparable for you. This already involves many hours, and a good expert usually charges from about €55.00/hour upwards.
GHeymann schrieb:

Does your construction consultancy not do the same? Or do you have fixed companies you work with?
Yes and no.

Yes, if our client wants more involvement and wishes to tender trades individually. Then they work with our second architect, who also handles site management; of course, external expertise is always welcome.

No, if our client wants a fixed-price contract. Then the choice of general contractor depends on the site location and the workload of our contractors. In this segment, we work exclusively with regional and execution-known contractors; here, long-term experience is paramount. Another pair of eyes is always welcome.
GHeymann schrieb:

But seven steps? So far, I’ve only seen or been explained payment plans with many more stages.
You’re mixing things up—I was referring to developer contracts. That’s different because you buy the land and construction as one package; the land belongs to the developer. These developers are bound by real estate agent and developer regulations and issue invoices in no more than seven installments, one of which is usually over 30%, since the land price is included. By the way, other providers work similarly, whether they own the land or not.

General contractors on the market usually work with more payment stages—up to 20 in some cases. It is important to ensure that payments are made only after progress on site.
GHeymann schrieb:

That basically sounds good. Would you also offer these (or parts of your) services to areas as far as Bonn or between Bonn and Cologne? And is it possible to submit your own sketches or amateur plans?
Take a look at our homepage via my signature; so yes.

If sketches are already available and suitable for cost calculation, there’s no objection to submitting them—of course, with further information concerning the desired specifications.
GHeymann schrieb:

So far, I was considering having a friend (not an architect!) draw the house
A draftsman?
GHeymann schrieb:

and then have an architect prepare the building permit application, working plans, and structural calculations. Then have an independent expert carry out site supervision and possibly have DEKRA carry out a final inspection. However, I fear this might not really be cheaper?!
In terms of architecture fees, it won’t be cheaper; that is correct, because the architect must prepare the drawings for the building permit and, after hopefully receiving a permit free of conditions, convert them into working drawings. In other words, they have to input the drawings into their system—of which there are many.

In my experience, building with an architect is not cheaper. On the one hand, because they provide initial cost estimates that get more precise only once tender documents are available; on the other hand, working with an architect often leads to reallocating supposedly “saved” money into higher-quality finishes. In the end, a piece of house always costs “X,” regardless of who builds it.
GHeymann schrieb:

@Bauexperte: I will be out of the country for a few days starting this weekend but would like to learn more about your construction consultancy. Private message is fine.
We can definitely do that; I leave it up to you whether by private message or phone.

Regards, Bauexperte
emer21 Jun 2013 13:59
Bauqualle schrieb:
.. NO! .. once again .. NO!!! you should read the previous text carefully again ..
.. absolute nonsense ... which industry do you actually work in? In any case, there is no point in discussing your opinion and attitude because you are not an expert ...

There’s no need to get so worked up.
After all, sugar is always more expensive than cheaper sugar.