ᐅ Secure a Fixed Price for a Prefabricated House?

We had a quite interesting and informative conversation with a prefab home provider. Unfortunately, we don’t have a suitable plot of land yet, so the advisor suggested that we could lock in the current price for one year. Should we do that, or is there some kind of catch? We don’t want to end up having a house *in the works* but still no land to build on 🙄

Best regards

I would never sign such a contract without owning the land first. We once visited a model home park and were overwhelmed by an inexpensive provider offering all kinds of bonuses—however, only if we signed relatively quickly. Without land, of course, that seems like pure suicide to me.

In the current situation, it is incredibly difficult to find a suitable plot of land at affordable conditions. Unless you live in a very rural area and/or off the beaten path.

First of all, I wouldn’t sign anything there! It all might sound very tempting, but it simply doesn’t make any sense.
Why would anyone buy a house without land? Maybe the building won’t even fit on the property, and then what seemed like a bargain ends up being an expensive, unplanned project.

Land first, then house!

There are building regulations for houses for every plot of land. Since you don't yet know the plot, you don’t know what you are allowed to build. Therefore, don’t sign anything yet and keep looking for land. Also, look for developer projects, which are finished houses including a portion of land.

Basically, the construction contract is not tied to a specific plot of land. It is an independent agreement that is valid even without land. If the house is not accepted, there is often a penalty of 10% of the purchase price.

Many prefab house manufacturers offer a so-called "land withdrawal right." This is meant to suggest to the uninformed buyer that they can easily exit the construction contract if they don’t find a suitable plot within a certain period. However, these withdrawal rights are full of conditions. Often, the buyer is required to involve a real estate agent in the land search or to consider offers from partner providers of the prefab manufacturer, and so on. So, caution is advised here. Also, with prices already high, it is questionable whether a fixed price agreement is desirable in the first place.

Neuling2 schrieb:

We had a quite interesting and informative conversation with a prefabricated house supplier. Unfortunately, we don’t have a suitable plot yet, and the consultant suggested that we could *lock in* the current price for one year. Should we do that, or is there some kind of *catch*? We don’t want to end up with a house *in progress* but still no land 🙄

Best regards

No, even they can’t create land.

Reputable prefab house suppliers will contact you themselves when they can build on a plot.

The catch is: they offer you unsuitable land that you don’t want to build on. As a result, they charge a penalty fee of, for example, 5 or 10%, because “you could have built, but didn’t want to.”