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Reisefee8124 Mar 2018 23:41Hello everyone,
we are looking for advice on what the typical process of building or buying a house from prefabricated house manufacturers should look like.
Our story: About 12 weeks ago, we decided to invest in a home for our family with two children. Our initial online research showed that something might be possible within our budget, specifically with a prefabricated house provider. Our next step was to visit a smaller model home park nearby. There, we met a very friendly and, from our layman’s perspective, seemingly competent salesperson from prefabricated house provider O (we’ll just call them that). He asked about our budget (which we had roughly calculated with our bank beforehand) and ran some numbers. He finally told us that with our price expectations (based on internet research and our own ideas of a house) and planned personal contributions, it might just work. BUT: there was a 3.5% price increase coming this month (January 18) — he showed us the calculation to emphasize how much money we would lose if we didn’t act quickly. He then presented a document for us to sign. It was a letter guaranteeing the current price according to the official price list but giving us the right to withdraw if we did not secure the chosen plot of land (which was still up for public tender) or if financing fell through. Regarding financing, he also said he had an ace up his sleeve and wanted to lock us in with an on-site appointment with an (of course) independent financial broker who would work for us free of charge. We felt rushed — this was supposed to be the first conversation. We thought it was unbelievable — provider O was off our list.
What can I say — other providers had a similar approach, as we found out during other model home visits. At provider F’s model home in Fellbach, we found exactly the house we had imagined in terms of layout. The salesperson, also very business-minded, made a good impression, but our enthusiasm quickly vanished when he urged us to sign the construction contract because of the current price increase (February 2018). To top it off, he wanted to print the offer he had just calculated at the computer and backdate it by 14 days — his reasoning: legally, the customer must have at least 14 days to review the offer and possibly revoke it. Since the price increase deadline was already past, we could not wait the full 14 days but only until the next day. WHAT??? Is that even allowed? Candidate number two also dropped off our list of serious providers.
Our last visit to a model home nearby was with provider B, which was our second appointment there. During the first contact, the salesperson took a lot of time, and we talked for two hours about possible house options based on our wishes. He calculated what we could afford based on our current income situation but did not give us a concrete price. He promised to clarify this and present initial plans by the next appointment. To build what he called a “mutual basic trust” (after all, we could tell stories about what the bank said we could afford), he insisted we speak beforehand with an independent mortgage broker to establish the actual financing framework. Overall, we had high expectations of company B, as the first meeting was pressure-free and online research was almost exclusively positive. A recent test comparing fair prefabricated house manufacturers reinforced our positive impression — this seemed like a fair and honest partner. However, at the end of today’s appointment, this provider also wanted us to secure the current prices and save 30,000 euros (around $33,000) by signing a construction contract. Of course, we would sign an addendum in case we did not find a plot or financing fell through. We have not yet seen an offer or house plans. He said he would prepare those only at the next meeting, which was supposedly urgent. He did not keep the promises from the first visit.
We are now honestly wondering if it is common to sign a construction contract even though
A) I have not secured a plot yet (which can significantly affect the actual costs)
B) I do not have concrete financing plans (we definitely do not want to exclude the option of the L-Bank loan — all financial advisers actually advise against it!)
C) Or even have seen an offer with the provider’s prices and service details???
To us, this just feels like a scam. I myself work in sales, and my clients would tell me off if I used such methods. Signing first and then seeing what services you actually receive from me...
How do we find a reputable provider who enables a “normal” house-building process? Are we possibly approaching this the wrong way? Who has had similar experiences, and how did it turn out?
I want to make it clear that I do not generally object to being informed about possible price increases — in fact, I see it as a sign of competence when a salesperson informs customers of major changes. But the way they pressure us into signing is very off-putting.
How can we get offers to compare without ending up at the “contract table” facing binding attempts every time?
We would be very grateful for advice, experiences, or guidance from other homebuilders.
Best regards
we are looking for advice on what the typical process of building or buying a house from prefabricated house manufacturers should look like.
Our story: About 12 weeks ago, we decided to invest in a home for our family with two children. Our initial online research showed that something might be possible within our budget, specifically with a prefabricated house provider. Our next step was to visit a smaller model home park nearby. There, we met a very friendly and, from our layman’s perspective, seemingly competent salesperson from prefabricated house provider O (we’ll just call them that). He asked about our budget (which we had roughly calculated with our bank beforehand) and ran some numbers. He finally told us that with our price expectations (based on internet research and our own ideas of a house) and planned personal contributions, it might just work. BUT: there was a 3.5% price increase coming this month (January 18) — he showed us the calculation to emphasize how much money we would lose if we didn’t act quickly. He then presented a document for us to sign. It was a letter guaranteeing the current price according to the official price list but giving us the right to withdraw if we did not secure the chosen plot of land (which was still up for public tender) or if financing fell through. Regarding financing, he also said he had an ace up his sleeve and wanted to lock us in with an on-site appointment with an (of course) independent financial broker who would work for us free of charge. We felt rushed — this was supposed to be the first conversation. We thought it was unbelievable — provider O was off our list.
What can I say — other providers had a similar approach, as we found out during other model home visits. At provider F’s model home in Fellbach, we found exactly the house we had imagined in terms of layout. The salesperson, also very business-minded, made a good impression, but our enthusiasm quickly vanished when he urged us to sign the construction contract because of the current price increase (February 2018). To top it off, he wanted to print the offer he had just calculated at the computer and backdate it by 14 days — his reasoning: legally, the customer must have at least 14 days to review the offer and possibly revoke it. Since the price increase deadline was already past, we could not wait the full 14 days but only until the next day. WHAT??? Is that even allowed? Candidate number two also dropped off our list of serious providers.
Our last visit to a model home nearby was with provider B, which was our second appointment there. During the first contact, the salesperson took a lot of time, and we talked for two hours about possible house options based on our wishes. He calculated what we could afford based on our current income situation but did not give us a concrete price. He promised to clarify this and present initial plans by the next appointment. To build what he called a “mutual basic trust” (after all, we could tell stories about what the bank said we could afford), he insisted we speak beforehand with an independent mortgage broker to establish the actual financing framework. Overall, we had high expectations of company B, as the first meeting was pressure-free and online research was almost exclusively positive. A recent test comparing fair prefabricated house manufacturers reinforced our positive impression — this seemed like a fair and honest partner. However, at the end of today’s appointment, this provider also wanted us to secure the current prices and save 30,000 euros (around $33,000) by signing a construction contract. Of course, we would sign an addendum in case we did not find a plot or financing fell through. We have not yet seen an offer or house plans. He said he would prepare those only at the next meeting, which was supposedly urgent. He did not keep the promises from the first visit.
We are now honestly wondering if it is common to sign a construction contract even though
A) I have not secured a plot yet (which can significantly affect the actual costs)
B) I do not have concrete financing plans (we definitely do not want to exclude the option of the L-Bank loan — all financial advisers actually advise against it!)
C) Or even have seen an offer with the provider’s prices and service details???
To us, this just feels like a scam. I myself work in sales, and my clients would tell me off if I used such methods. Signing first and then seeing what services you actually receive from me...
How do we find a reputable provider who enables a “normal” house-building process? Are we possibly approaching this the wrong way? Who has had similar experiences, and how did it turn out?
I want to make it clear that I do not generally object to being informed about possible price increases — in fact, I see it as a sign of competence when a salesperson informs customers of major changes. But the way they pressure us into signing is very off-putting.
How can we get offers to compare without ending up at the “contract table” facing binding attempts every time?
We would be very grateful for advice, experiences, or guidance from other homebuilders.
Best regards
This sounds quite familiar to me and was one of the reasons I ended up working with an architect.
My advice: never let yourself be pressured with such tactics. They should print out the detailed scope of work and the contract for you so you can have them reviewed by a lawyer or an expert. That is definitely something I would do—I did the same with the architect’s contract, for example. With "Stadt und Land" here in this region, it was really intense; the expert threw up his hands and advised us not to sign without corrections. But there have also been reasonable general contractors. I have seen these withdrawal clauses related to contracts falling through quite often back then, sometimes with steep “compensation fees.” I wouldn’t get involved with this nonsense about low prices. It might seem like a good deal, but how do they justify €30,000 (about $32,000) in extra costs due to price increases? Just check the average price increases in the construction sector online—they certainly are not 10% or even 5%. I recall them being around 2% or so (please verify).
Other than that: you’re already asking the right questions with points a) to c). Now think about whether you would buy a car under these conditions, for example, without knowing what features it has...
I know this too—somehow common sense tends to take a break in situations like this. But with some distance, things become clearer. I think it’s good that you’re approaching this with healthy skepticism. Many, many people sign such documents completely trusting.
No idea if this will work, but if the sales reps come at you with trust and sweet talk, why don’t you ask them to provide the scope of work and contract text in advance—and have them sign a document stating that, if the contract is finalized, the old prices will apply for 14 days? If the provider is trustworthy, they should be willing to do that, right? And why should trust always be one-sided and to the customer’s disadvantage?
Never sign a supposed “bargain” under time pressure—that usually ends up costing much more in the end. Just my personal opinion [emoji4]
My advice: never let yourself be pressured with such tactics. They should print out the detailed scope of work and the contract for you so you can have them reviewed by a lawyer or an expert. That is definitely something I would do—I did the same with the architect’s contract, for example. With "Stadt und Land" here in this region, it was really intense; the expert threw up his hands and advised us not to sign without corrections. But there have also been reasonable general contractors. I have seen these withdrawal clauses related to contracts falling through quite often back then, sometimes with steep “compensation fees.” I wouldn’t get involved with this nonsense about low prices. It might seem like a good deal, but how do they justify €30,000 (about $32,000) in extra costs due to price increases? Just check the average price increases in the construction sector online—they certainly are not 10% or even 5%. I recall them being around 2% or so (please verify).
Other than that: you’re already asking the right questions with points a) to c). Now think about whether you would buy a car under these conditions, for example, without knowing what features it has...
I know this too—somehow common sense tends to take a break in situations like this. But with some distance, things become clearer. I think it’s good that you’re approaching this with healthy skepticism. Many, many people sign such documents completely trusting.
No idea if this will work, but if the sales reps come at you with trust and sweet talk, why don’t you ask them to provide the scope of work and contract text in advance—and have them sign a document stating that, if the contract is finalized, the old prices will apply for 14 days? If the provider is trustworthy, they should be willing to do that, right? And why should trust always be one-sided and to the customer’s disadvantage?
Never sign a supposed “bargain” under time pressure—that usually ends up costing much more in the end. Just my personal opinion [emoji4]
Yes, unfortunately this now seems to be common. I have had similar experiences, although not with all providers. In the initial conversations, I clearly stated that we just wanted to gather information and that I definitely would not sign any contract before receiving a detailed cost breakdown including our main modification requests to the “catalog house.” No one ended the conversation, and the topic of signing was not brought up again. However, only about half of the providers followed through with the agreed steps for a second meeting, which then did not happen. In the end, we are now working with an architect, and this was the right decision.
I can only warn against signing anything before you have a plot of land and very clear ideas about the house. The cancellation clauses are often not worth the paper they are written on, and penalties can come up quickly.
I can only warn against signing anything before you have a plot of land and very clear ideas about the house. The cancellation clauses are often not worth the paper they are written on, and penalties can come up quickly.
It is likely that price increases can be expected in the first few months of the year. It is also true that sellers use this as a pressure tactic. However, if this is a concern for you, which is completely understandable, you should not give in to the pressure. Just take a look at local home builders: they are usually not under as much pressure to demand an immediate signature. Additionally, they often offer more affordable construction since travel and advertising costs are kept to a minimum.
T
toxicmolotof25 Mar 2018 01:46Normal: Yes
Correct: No
Good: No
Sensible: No
To put it briefly... you go into a store and buy a house... contract value somewhere between 200,000 and 500,000 EUR. You have a contract in front of you after about two to three hours.
I don’t know about you, but I spent more time researching a 400 euro (about $430) sun umbrella.
So: Everything done correctly and never, ever let anyone pressure you into anything.
But what I find much more important: If you can afford a prefab house (including all additional costs!!), it’s also perfectly fine if it’s from a general contractor / main contractor.
Correct: No
Good: No
Sensible: No
To put it briefly... you go into a store and buy a house... contract value somewhere between 200,000 and 500,000 EUR. You have a contract in front of you after about two to three hours.
I don’t know about you, but I spent more time researching a 400 euro (about $430) sun umbrella.
So: Everything done correctly and never, ever let anyone pressure you into anything.
But what I find much more important: If you can afford a prefab house (including all additional costs!!), it’s also perfectly fine if it’s from a general contractor / main contractor.