Equity - Reserve for Unexpected

As mentioned, a buffer is already included in the calculation. And I thought we can't just include uncertainties in the loan like that? Doesn't there always have to be a trade behind it so that the bank credits the added value to the house?

Hello,

We are comparing our offer from the current developer (a big green one from the Hanover area) with that of a smaller other one from Cologne, which we have liked even better so far.

Does the first one start with *H* and the smaller one with *M* or *S*?

We still have to pay for a move from the 15,000, one or two lamps, one or two pieces of furniture, maybe already something for the outdoor facilities and such things. And these are just the things I can think of. I’m just afraid of forgetting some essential cost points.

That is bad – the 15,000 euros should actually be kept purely as a reserve in the background. If you don’t need it by the end of the construction phase, that’s good and you can use it otherwise. But until then it should remain untouched!

Our developer will or has already planned financial buffers to some extent, for example earthworks, construction power and such things. But of course it’s hard to estimate in advance whether this buffer is realistic. We have soil surveys on the radar.

You shouldn’t expect too much from that; I know the BB of the green provider quite well. That, of course, relativizes the statement of the financing advisor; I assume you have his card from the seller of the provider?

What you describe are items typically found with most serious providers. And, if I remember correctly – unless he recently changed his BB – you have to pay for the construction power yourself. Were you near Neuss at a show house?

From Yvonne’s list you can by the way cross out points 2 and 5 with this provider; that’s basically it and you see why I always recommend a cushion of at least 10,000 euros.

Construction expert, many thanks also to you for the detailed answers. The rough planning is so far the draft on which we continue to plan. We know that we will have about 150–160 sqm of living space, but we are still moving windows around, making them wider, relocating doors and such things. Therefore, the purchase price is certainly not final yet and so far we only have this one offer...

You’re welcome.

You should also keep it that way with this provider; with each offer it gets more expensive. And – what drives me absolutely up the wall: if a replanning is required after signing the contract – no matter whether you or your seller or a department within the provider itself causes it – you pay. Knowing from whom you got the offer, I would also strongly advise you to have this provider’s contract reviewed externally.

Rhenish greetings

You are of course right with the "H", construction expert, thank you for the valuable tips! We were actually in the show house near Neuss. In the last meeting (2nd appointment for preliminary house planning) we were also a bit surprised that we had actually discussed that the price would be reduced somewhat (e.g. because clinker brick was planned in the first design, which is no longer being done). In the end, the price was indeed cheaper than the first time, but only because the painting and flooring work were excluded. When I then said the price would move in an acceptable direction if it included the garage, the gentleman was suddenly able to include it in the total price without increasing the price!? We felt a bit fooled...

The other provider starts with "A", has its headquarters in Bad Honnef, but a sales office in Cologne. This one appeared to calculate more thoroughly and we liked the houses visually better. Also, the floor plan was a bit more practical. However, we are still missing a cost framework here...

What do you suggest, how many offers should we seriously compare? Are two or three enough, with which you really have in-depth talks?

What an undertaking!

Oh, by the way, forgot to mention: The financial advisor is independent, not from H. We had indeed already had a conversation with an "expert" referred by H, but after the second meeting with the independent advisor, we decided to continue planning with him. His calculation put us in a much better position and seemed more solid. We were even more reassured when this independent expert said he rarely sees follow-up financing at H.

Construction expert, regarding your overview of ancillary construction costs; can you say which of the costs (especially those from the area of construction preparation) are usually included in the offer by a "normal"/reputable developer? Or do I, for example, always have to be able to pay €3000 for surveying out of my own equity? I am unsure whether these are costs that I finance together or that I have to pay directly out of pocket.

The other provider starts with "A," has its headquarters in Bad Honnef, but a sales office in Cologne. This one appeared to calculate more thoroughly, and we liked the houses visually better. Also, the floor plan was a bit more practical. However, we are still missing a cost framework here...

Then I know whom you mean. This provider, whom I have always considered very reputable until now, surprised me last December; I also know their contract documents well. He and my partner were the last ones competing for a work contract for a not exactly small single-family house on a slope. When he realized he was about to lose the contract, he adjusted his offer price to my partner’s; simply lowered it. I was—and actually still am—astonished because we are not talking about a few euros but about a five-figure amount.

What an undertaking!

You are probably facing the biggest investment of your life! This decision should never be taken lightly. Rhenish regards