Hello 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
K
Knallkörper25 Mar 2018 11:44Meister keks schrieb:
I can’t confirm that.
There were additional costs, but only due to the snow load and the electrical distribution box.
The seller informed us about this relatively promptly.
For us, everything was included: just insert the key, unlock, move in.Then your specifications must be completely standard, or you had already negotiated and priced all special requests at the time of contract signing. The latter, according to the original poster’s description, is not possible at all. Therefore, my strong advice is: stay away.
At that time, we sent the same inquiry to 20 companies, including our floor plan and a detailed description of specifications and materials. We received 12 offers back. The cheapest all came from local companies.
C
Caspar202025 Mar 2018 12:12Fuchur schrieb:
The difference, however, is that you can get various offers if the first one doesn’t suit you. With a prefab house, it’s take it or leave it. That’s why so many people – including myself – complain about the sometimes outrageous extra charges for plumbing, electrical work, and so on.We asked about many additional charges in advance and received estimates that were then included in the contract. Before signing, we also visited the factory and took part in a sort of simplified selection process at the associated sample center (there, I think, you get the best impression of what the standard includes and what costs extra).
There is also an active community for our builder (and others too).
We wanted, and still want once the land finally becomes available, a timber-frame structure. In our region, this is quite rare outside of self-build projects.
Several of our friends, who worked with different architects, experienced far more surprises.
At one point, we also looked at projects by traditional developers; there, everything was much less transparent and the options for customization were drastically more limited compared to the prefab house sector.
tomtom79 schrieb:
And you might as well forget the tip about the architect, because it’s not the architect who sets the prices, but the construction companies, and they adjust to demand. It’s no coincidence that projects regularly end up costing more than the architect originally estimated. Just recently, there was talk in the discussion thread about a 20% increase in the last two years. No one here claimed that architects set the prices. It’s just that architects don’t pressure you or justify price changes with quarterly adjustments or systematic price corrections. Our architect’s estimate is still holding. The price developments have been factored into the estimate, so, unlike what you describe here, we were never forced or pressured into signing anything by the architect.
I don’t know if your “forget the architect” comment comes from frustration, jealousy, or the growing feeling that you paid too much to your general contractor (GC), but in my view, that misses the point. The issue was about pressure tactics—and you’re much less likely to experience that from an architect.
Regarding increases in construction costs, there are official, objective statistics available online (I believe even from the Federal Statistical Office). These figures are far from 5% and, from what I recall, mostly range between 1% and 2%. Do you really believe that the annual price hikes by a (regional or national) GC simply reflect actual increases in material and labor costs? No, it’s more a case of taking advantage of the situation to charge even more—demand conditions allow it, but definitely not to the extent caused solely by rising material and labor costs.
One last point about cost overruns when building with an architect: Of course, they do happen, and sometimes because the planner is incompetent. But often, cost overruns occur because the homeowners insist on adding extras here and there during construction. So you’re right that there is a reason for the difference between estimate and final cost—but it’s not the one you suggest. This is no different when building with a GC. With an architect, homeowners need to exercise more discipline because virtually everything is possible, and on average, the builds tend to be more complex. Our neighbors built with an architect on a very tight budget; they disciplined themselves strictly and stayed within their budget (and almost exactly at the estimated cost). The difference between estimate and final cost was 2%. The difference between their house and those built by GCs nearby is very noticeable in this specific case. Inside, they used laminate flooring and cheaper leftover tiles from a flooring contractor found through open tenders. Their budget simply didn’t allow for solid wood planks or parquet. They wanted those, but the architect said, “Technically, it’s possible, no question, but it’s not feasible within your budget. If you really want it, let’s look for savings elsewhere. But there’s not much room left because your budget is tight.”
And that’s also the job of a good planner—besides supervising construction on behalf of the client—to balance wishes, technical feasibility, and the budget. Not everyone succeeds, of course. But to pretend that every project with an architect goes 20% over budget without looking carefully at why that happened is wrong. Or, to use your words: This kind of unqualified statement is pure polemic and “something you might as well forget” [emoji6].
Caspar2020 schrieb:
Several friends of ours who worked with different architects had a lot more surprises. Well, the architect ESTIMATES the costs before the planning phase. And estimates can be wrong, otherwise they wouldn’t be estimates.
How else should they know what the clients will come up with later or what will be offered in the bill of quantities?
Hasn’t anyone here ever organized a bigger party and had to estimate how much food and drinks would be needed? If so, have you ever had too much or too little because too many people canceled or friends of friends showed up unexpectedly?
Estimates are inherently imprecise. Of course, you could also call them a surprise package. [emoji4]
C
Caspar202025 Mar 2018 17:20Of course, these were just estimates. However, in all three cases, they were too optimistic or somewhat different from the actual specifications regarding the features.
Unfortunately, two out of three did not have additional funds available or did not want to exceed their set budget. Instead, they started shifting items around in their calculations once the "buffer" was gone.
At that point, it was less about what was initially planned or desired for the final trades and the outdoor area, and more about finding someone who could do it a bit cheaper (of course, with compromises on quality) just to make the house "livable."
Unfortunately, two out of three did not have additional funds available or did not want to exceed their set budget. Instead, they started shifting items around in their calculations once the "buffer" was gone.
At that point, it was less about what was initially planned or desired for the final trades and the outdoor area, and more about finding someone who could do it a bit cheaper (of course, with compromises on quality) just to make the house "livable."
M
meister keks25 Mar 2018 17:34Yes, our features are standard with a few extras that we really wanted, so there’s no need to be embarrassed about that. I don’t need any competition comparisons. Basically, the tactic is that the lower prices only apply this year for every model in the show home park. At least that’s the case with the prefabricated house suppliers.
J
Knallkörper schrieb:
Then your features are either completely standard or you have already negotiated and priced all special requests at contract signing. According to the original poster’s description, the latter is not possible. So my strong advice is: stay away.
We sent the same inquiry to 20 companies back then. We shared our floor plan and a detailed description of features and materials. We received 12 offers. The cheapest were all local companies.
J
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