ᐅ The Same Old Problem – Turnkey Contracting vs. Individual Contracts

Good morning, dear new building community!
I am facing the classic decision... whether to go for a turnkey build or to contract everything separately...

First, here are my key data:
Plot size – 805 m2 (8,663 sq ft) available
Living area – 160 m2 (1,722 sq ft)
Roof – gable roof 22°
Floors – 2 full floors
Basement – fully cellar
Heating system – air heat exchanger
Heating – underfloor heating on ground and upper floors
Windows – plastic frames, triple-glazed
Bathroom – shower/bath/2 washbasins on upper floor
Toilet – WC/shower on ground floor, prepared connections in basement
Garage – double garage 9 x 5 m (30 x 16 ft)
Floor plan – simple, rectangular without slopes or offsets, symmetrical
Dormers – none

For the above building project, we have received a turnkey offer of €345,000.
I am now very uncertain whether I can actually save anything by contracting the entire build separately... I also know that the construction industry can be quite hectic, and one often a) waits ages for quotes, and b) has trouble finding anyone with availability.

I am skilled in crafts myself (trained carpenter) and also have many acquaintances in the construction industry (bricklayers, carpenters, electricians, etc.). Unfortunately, you still have to present figures to the bank... which in turn require reliable data... leaving aside the mental strain...

After extensive research and discussion, I have gathered many opinions and perspectives. The following comments from my friends and acquaintances have been on my mind day and night:

- Don’t contract the trades separately, you won’t save anything; in fact, it might even be more expensive. General contractors negotiate completely different prices than you can (structural engineer)
- Based on experience, contracting separately at this scale leads to additional costs of about €100,000. General contractors negotiate very different prices than you can (architect)

Since these statements come from very experienced people, I think there must be some truth to them...
What is your opinion?
Be brave and contract separately?

I just want to sleep well again... well, I guess I can forget about that for at least a year anyway.

Thanks for your advice!

We separated the house and the basement contracts, which ultimately saved us €4,000 and involved a lot of hassle, effort, and stress. Would I do it again? No! Is this statement generally valid? Definitely not.

With a lot of effort, you can probably save money by hiring individual contractors. However, for a 40-hour job and possibly long travel times, I would not recommend it. You are often needed on-site to discuss and coordinate details, and so on.

We basically built our home as a turnkey project. However, we did subcontract some trades ourselves.
For example, we replaced the staircase but ordered it from the same general contractor. We had also been in contact with several other staircase suppliers beforehand. We definitely saved money on the staircase, but invested quite a bit of time upfront.
Tiling work was excluded from the contract due to the many special requests from the homeowners. Coordination was still ensured, as the tiler worked through almost all the general contractor’s houses one after another.
Exterior landscaping, internal infrastructure, and the garage were contractually separate anyway.

Some other trades might have been better subcontracted directly, but only with professional support from an independent construction manager or site supervisor who would handle the tendering and coordination process. Doing everything yourself would have been impossible for us both in terms of time and expertise. We were lucky that my wife was on parental leave and took over all the organization and phone calls, and that I work close to the construction site with flexible working hours, allowing me to drop by occasionally.

Whether this ultimately saves money is questionable, as having a choice usually leads to a focus on a different level of quality.

Hello Bauherren2014,

Our cost estimate wasn’t prepared by the architect using some tables based on the enclosed volume but by the construction engineer, who relied on experience from many other bills of quantities. This worked really well for us. I had also allocated extra funds for special requests.
With a general contractor (GC), you know the price, but what you actually get is detailed in the scope of work, which can be written well or poorly, or interpreted in various ways. Negotiating the scope of work can be quite difficult. Some GCs don’t even consider certain requests or ideas, or they quote prices that effectively kill the request right from the start. I’m currently seeing this with friends negotiating with a GC I had also shortlisted back then.

BratacDD schrieb:
So our cost estimate was not calculated by the architect using any tables based on the enclosed volume

It wasn’t for us either, yet in the end, things just didn’t add up for some reason. But as I said, that’s another story and there were several clarifying discussions.
That doesn’t mean it always goes like that.
Overall, the design with separate contracts worked for us and we would do it again. Of course, we would change a few things, you learn as you go.

BratacDD schrieb:
With a general contractor (GC), you know the price, but what you actually get is defined in the scope of work, which can be good or bad, or interpreted differently.

Exactly. That’s why there is always advice to have the contract reviewed beforehand.

BratacDD schrieb:
And negotiations over the scope of work can be very tough. Some GCs won’t even consider certain wishes or requests, or they write prices in a way that quickly stifles those ideas.

In that case, I would seriously reconsider building with that GC.

We also built using separate trade contracts (my father-in-law was the architect) and saved a significant amount of money. However, the savings were then invested in higher-quality finishes, so in the end, we actually spent even more.

The advantage is that you can really choose the craftsmen or companies yourself. A tradesperson can even be located 150km (90 miles) away – if they need work and offer a good price, they should get the job. Including landscaping, high-end finishes, and all additional construction costs, we are now at about €1,700 per square meter (around $158 per square foot) without a basement. General contractors had wanted to sell us the house for about €500 per square meter (about $47 per square foot) more.

Despite the extreme stress—my wife took on the role of construction manager with support from her father—we would do it the same way again.