Cost planning, comparison options and identifying savings potential

Hi Allstar83,

that is not even a question - I am very aware that I have to expect costs there and I am not naive about it. However, I do not expect to have much leeway regarding the costs incurred. The developer of the residential area operates a civil engineering company and also has disposal options for the soil if it cannot be deposited on the property - maybe he can offer a fair price.

Hi Allstar83, this is not a question at all – I am very aware that I have to expect costs and I am not naive about it. However, I do not assume that there will be much flexibility regarding the costs incurred. The developer of the residential area runs a civil engineering company and also has disposal options for the soil, provided it cannot be used on the property – maybe he can offer a fair price.

My thought was rather, in the course of forward-looking planning such as the placement of the house, to keep the expenses already low. The title does say saving potential :)

Hi Allstar83,

then I misunderstood you. Yes, the point is valid and I will pay attention to that. My idea was that maybe the dimensions of the house are kept small, so the footprint remains small and thus earthworks should also be cheaper. Since we are allowed to build two stories, the space lost in this way could be regained by the upper floor.

1. How can I compare offers as efficiently as possible without spending a fortune on planning costs each time?

By tendering and specifying the items to be priced. This requires a lot of preparation and an existing plan – previous posters have already shown valuable ways to save during planning.

2. How can I identify cost traps or simply expensive items in the offer? I am aware that an offer includes a large number of individual items, but maybe there are experienced builders who can list the "Top 3 of typically overpriced services."

See above – by making items basically comparable. The question is what you do with that insight. Do you want to negotiate down individual items or have them carried out differently? The former does not reflect reality, as companies distribute their margin differently across items; the latter only happens if someone is willing to accept the expensive interfaces in construction coordination.

3. Is price negotiation actually promising nowadays? I have a bit of the impression that construction companies nowadays tend to simply refuse negotiations – the next prospect is practically already at the door.

Of course price negotiation is promising – with respect and understanding for the other party, offering something that keeps their interest high – it is just a bit more difficult in a market with high demand. You just have to be able to do it.

4. If point 3 is answered positively: On which items can savings most easily be made?

This is the wrong approach for a price negotiation, especially in the current market situation. Besides, you will probably just get lower quality – whether in materials or workmanship. The question is: What can you offer besides money to become a particularly attractive customer for your counterpart? Find that and then price negotiation will also work. Tip: Unpleasantly demanding, nitpicky behavior that insists in advance on norms and regulations is counterproductive. If the other party recognizes that they have a binding, reliable, and self-confident partner in you with whom problems can be solved straightforwardly, the chances of a discount compared to the offer increase. This is also commercially understandable, as quick and good customer communication saves the professional a lot of resources.

Hello Hampshire,

thank you very much for this very valuable contribution. In fact, the approach in industries I am familiar with is also the behavior I usually use. I do not see service providers as people/entrepreneurs who have to rightly shrink their actual profit margin in brutal price dumping. I am very aware that companies not only have to pay their employees and materials but also have to make a profit.

Unfortunately, I am not familiar with the field of house construction and fear being too naive. However, your explanations help me a lot. Therefore, thank you very much!

Depending on whom you are building with, you have different needs regarding your negotiation partner. Depending on the role and company, the counterpart has different tasks, problems, goals, and decision-making powers. This is not specific to construction but applies in every industry – in construction, you have a wide range of negotiation partners, from intermediaries to employed salespeople to owners. Besides industry knowledge, which is certainly helpful for better assessment, the knowledge of the counterpart is particularly important in every negotiation. As a client, please do not forget that not every provider delivers comparable quality. As a layperson, it is important to develop a good gut feeling. Indicators of good quality include, for example, a good tone within the company and on the construction site, clear directness in answers, credibly satisfied customers, noticeable passion for the profession... So rather don’t choose the cheapest option, but aim for the "somewhat less equipped" house with higher construction quality at the same price.