Buy 1960s bungalow

Hello everyone!

I would appreciate some opinions regarding houses from the 1960s.

We have the following "problem":

We have found a house that we like quite well overall (appearance, room layout) except for a few minor details, meaning we would have to make very few compromises compared to our ideas. The house also has a great location (edge of a 3,000-inhabitant village, south side cannot be built on with a wonderful view), and the neighbors are known and okay.
It is an L-shaped bungalow from 1967 with a 730 sqm plot, 160 sqm living space, and about the same again for the basement including an integrated garage. The house is well maintained and in good general condition (good substance).
The standard land value here is 80 euros/sqm.

Our main problem:
As is typical for a house from this period, nothing has been done in terms of thermal insulation.
Of course, we have now dealt with the topic of "energy-efficient renovation," but due to the flood of information, we are actually no smarter than before, especially since there are many critical voices regarding ETICS (no amortization, mold, moisture in the facade, later disposal, etc.).

Therefore, we now ask ourselves: is it still worthwhile to buy such a house at today's energy costs without deducting the total costs related to renovation (even if you might not carry them out) from the purchase price?
The negotiation basis for this property is apparently 210,000 euros, which seemed quite expensive to us from the start. However, we do assume that the final purchase price will be somewhat lower.
If you roughly estimate the renovation costs (possibly thermal insulation, new windows, doors, new bathroom, guest toilet, kitchen, flooring, heating), you quickly reach an amount of 100,000 euros, which together with the purchase price almost exceeds the cost of a new build.
If you forego major energy-related investments, the much higher energy costs compared to a new build will apply.
You also have to consider that perhaps the roof will need work in the medium term. (At the moment it still looks good (tiles)).

What are your thoughts/experiences in this context?

Is it more reasonable to build new? We could get a 600 sqm plot in about a year for around 60,000 euros. However, the location would not be as nice.

Thanks in advance for your contributions!

Hello,

From this perspective, we now ask ourselves: is it still worth buying such a house at today’s energy costs without deducting the total costs related to the renovation (even if you might not carry it out) from the purchase price? The starting price for this property is said to be 210,000 euros, which seemed quite expensive to us from the outset. We do assume, however, that the final purchase price will be somewhat lower.

I always tell my children "you can believe that in church"

In any case, you should before making a final purchase decision involve an expert who can assess the condition and location of the building—if no such report is provided by the sellers. In addition, they can independently determine the so-called market value of the property including all buildings. This provides a good basis for later price negotiations. The real estate appraisal report addresses, among other things, any legal burdens on the property (easements, utility rights) as well as building damages and estimates the costs of their remediation. This way, you know what financial burdens may still be on you after the purchase. Additionally, an architect can realistically assess the need for remodeling and renovation and later support you with their expert knowledge during the measures.

Thus, some—but not all—of the following further questions from the checklist can already be answered at an early stage:

What is the value of the property/real estate?
Is this property even financially feasible?
What additional costs are to be expected?
Are there structural issues that possibly require deeper investigations?
Are there any real rights or encumbrances (e.g., right of way or utility rights)?
Are all documents available (land register excerpt, cadastral map, development plan, etc.)?

An expert protects you from unpredictable risks and helps to properly assess the value of a property. Appraisals are important to protect against unexpected defects and damages, etc., and against incorrect assessments of the building substance—especially in older properties. Moreover, some financial institutions require—as a protection for you—the submission of an appraisal!

Is it more reasonable to build new?

Rationally speaking, yes; but... it’s not that simple to reduce buying a property to mathematical calculations. The heart also has a say.

At this point in time, in my opinion, you cannot decide either for or against a purchase simply because only your heart is speaking. Ask the seller for an appraisal as described above, or—if your heart won’t quiet down—have one commissioned at your own expense. Only when you have a “condition report” for the property and know what renovation costs await you can you decide between heart and mind whether buying the bungalow can balance both. With this appraisal, you can also approach your bank and discuss funding options together with your trusted advisor; the government still supports energy-efficient renovation.

Not every banker appreciates the sale of KfW funds because they bring little or no commission but a lot of work. If your banker falls into this category, find an independent financier near you and discuss the appraisal contents and your wishes with them; then your financing should be on a safe footing.

Regarding the fundamental decision between an existing property and new construction, as mentioned above, it is a very personal decision. There are factors that a new build will never fulfill—many old properties undoubtedly have charm. On the other hand, it is also a weighing of values—can and do I want to afford the renovation? If the renovation seems endless—you can bring old buildings excellently up to the latest energy standards—reason should prevail. If the costs are foreseeable—in the end, it will always cost about as much as a new build—it is certainly worth considering preserving the charm.

Kind regards

Thank you for your reply!

Of course, we do not rely solely on our own impressions and thoughts. In two days, we will look at the house together with a friend who is an architect. He might be able to say something more precise already.

I do think that it is quite a challenge to spend the same amount as for a new building. As you rightly say... at the moment, we are still somewhat influenced by the first impressions, especially regarding the location and the layout. We can well imagine what can be made out of it! It is hard to remain purely objective. Somehow, you constantly look for reasons that speak more in favor than against. But when it comes to the price, the dreaming eventually stops.

Let's see what the architect says. I think that about 180,000 would be justified. But whether they will go that low, I dare to doubt. I hope that we gather enough arguments to convince them!

And if it doesn't work out, we'll manage just fine. Because we would actually prefer a little house in the Tyrolean country house style in the case of a new building. That wouldn’t necessarily be the case here.