Cost explosion even before it really gets started

  • Erstellt am 2019-01-26 13:37:12

Ruhrgebiet23

2019-01-26 13:37:12
  • #1
The following situation: We bought a semi-detached house from the 1950s. Planned: Renovation of the old building (100 sqm) and extension (68 sqm over 2 floors, flat roof).

We already bought in 02/2018. At that time, we hired an (acquaintance, experienced) architect for the complete range of services. Shortly after signing the contract, we were informed that his new employee, fresh out of university, would take over our supervision. From the beginning, we told him that we could invest up to 300k euros in the project. In 02/2018 a cost calculation was then prepared.

After 8 months of approval time at the authorities, we started with the extension in the second week of January. For the loan application, our financial broker requested a signature on the cost calculation two weeks ago. We asked orally whether it was still up to date. For the shell construction, we only received one offer (70k euros) and signed it. The statement was that it would fit into the calculation (not transparent to us, as the calculation was not listed according to trades). Now we met last week and reviewed offers. We photographed them and made a cost breakdown. For some trades there are still no offers and only estimates, and we are now already at 350k euros although some of our wishes have not yet been considered in the service specifications (e.g., windows in anthracite instead of white). Of course, we contacted the architect directly, and he only said that we are indeed already higher and that he would ask again about offers and price reductions.

Then the first interim invoice from the shell constructor arrived the day before yesterday, and it is 10k euros above the signed offer. Since we had not been given a copy of the offer after signing and could not wait because of the discount agreement (the offer had already arrived at the architect 6 days earlier before we received it by email), we transferred the money. After requesting it, the old offer was then sent by email, and we noticed the enormous deviation (especially over 90 instead of the planned 34 m^3 of excavation was indicated!).

We have now written again emphatically by email that we simply cannot spend more than 300k euros (of course we have privately calculated a buffer of 25%, but that cannot already be used up in the planning!) and demanded that both architects (!) should check again whether the individual costs can be reduced (further offers, talk to tradespeople, possibly do work ourselves). Hopefully they will do so now. And yet I wonder how we should proceed because we feel that our specifications apparently simply dissipate. Or is all of this “normal” and should we just relax a bit?
 

Ruhrgebiet23

2019-01-26 13:49:49
  • #2
Attached is the cost estimate.

 

Müllerin

2019-01-26 13:50:25
  • #3
Uh no, that's not normal and I would have a word with the "rookie".. just 50k over without consultation, where does he live?

By the way, if your invoices only go to the architect for review, he has to stamp them(!) and your discount period starts from that date.
At least that's how we've handled it, the bank needs 3 days to process the payment, otherwise it wouldn't have worked for us often.
I hope that's legally okay, we never received any complaints anyway.
 

Zaba12

2019-01-26 13:50:56
  • #4
I mean what do you expect? Your offers are 1 year old. Just because you signed a year ago, the trade is still allowed to make adjustments. The market keeps developing and the equity prices are also rising for the trades. You and I build with individual trades. It should actually be clear that you do not have a budget guarantee, right? And yes, you keep hearing that cost estimates go wrong.

EDIT: But it is not the costs, rather the cost estimate is completely off.
 

Müllerin

2019-01-26 13:54:19
  • #5
Oops, I overlooked that the first offers are almost 1 year old... then it’s clear that it becomes more expensive.
 

Zaba12

2019-01-26 13:55:01
  • #6
But that’s not the reason. The cost estimate is off. I spoke with a few tradespeople. Renovating and remodeling is far more expensive than building new.
 

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