Is equity sufficient for a "blind" property purchase?

Hello,

the search for houses to buy has so far not been very successful in the area (NRW, rural) – the prices seem quite high compared to the new builds of colleagues (which is why they also decided on new builds), and the supply is very limited.

Well, the actually undesired option of building new is increasingly coming into focus, but with it also the feeling of lack of planning security.

Now to the facts and the basis of my question:

The city sells reasonably priced developed plots, with about 50,000 euros including incidental costs for about 650 sqm you would be involved.
The available equity currently amounts to about 170,000 euros (with about 3.6k monthly net + interest + holiday and Christmas bonuses + 2x child benefits, etc.).
The goal is to build a solid single-family house with about 130 sqm living space, a basement and a garage, with "normal" equipment, no or negligibly low own work.

Now the question, before I dive into all the talks with sellers and bankers: Are the remaining 120,000 euros after buying a plot a sufficient financial cushion to build a relatively average single-family house as described above quite hassle-free and to finance the rest without major problems? So can I buy the above-described plot quite safely or should one definitely have offers for the house construction beforehand and discuss them with the bank?***
Of course, I would prefer to separate the two transactions (plot purchase and house construction) both in terms of time and content...


***Without having concrete offers, I roughly estimate the complete construction of the house on the then existing and developed plot at about 200,000 euros in my (possibly naive) assumption – so about 80,000 euros would still need to be financed.

Hello,

So can I buy the property described above without much concern, or should I definitely have house construction offers available beforehand and discuss them with the bank?***

As it reads and as long as you don’t have any “pitfalls” in your information, the property purchase will probably not be a problem.

Of course, I would prefer to separate the two transactions (property purchase and house construction) in terms of time and content...

From the gut, I would tend to agree, especially because then you have time to calmly look for the right partner for your house construction and the real estate transfer tax only applies to the land part :D On the other hand, it may be that your banker suggests a different way based on your situation (possibly also for tax reasons).

In any case, I would always recommend a conversation with a truly independent financing broker; bankers tend to think in stereotypes all too often. You registered here in the forum from NRW, if you don’t know a financing broker, I can gladly give you a recommendation.

***Without concrete offers, I roughly estimate the complete construction of the house on the then existing and developed property at about 200,000 euros in my (possibly naive) assumption – so about 80,000 euros would need to be financed.

That’s not quite right – for a single-story house you would have to put up 220,000 euros and for a two-story house 250,000 euros; each as a KfW 70 efficiency house, completely finished and with a normal gable or hip roof.

For the garage, I would always recommend a prefabricated garage to you, because it provides more space for the car and – what I think is more decisive – is significantly cheaper. We are talking here about roughly 7,000 euros for 3 x 6 meters and about 10,000 euros for 3 x 9 meters, both with electric sectional doors. If the garage is instead built from bricks, you can also easily double that amount in your calculation.

Then there are the typical ancillary construction costs, some extras, and you surely want to lay a small access path or roll-out lawn as well. Accordingly, your financing would have to be adjusted to the following amounts:

House 220,000 euros, garage 7,000 euros, ancillary costs 30,000–35,000 euros, and a buffer for "x" special wishes; for the other above-mentioned variants correspondingly more :D

Kind regards

Thanks for your answers!

For the price estimate of the house, I based it on the assumption "living area * 1300 euros" + 30,000 euros additional costs.

With your figures, at least another 50,000 euros are added on top. What calculation basis do you use for that, or which assumptions are better suited for a rough calculation?

If it comes to it, I would of course buy the plot of land from the existing equity capital without a loan and then see with which partner (architect or general contractor) it is best to build.

@Bauexperte:
Maybe a stupid question, but what is a financing broker and how do they differ from a regular banker?
For financing, especially since the financing sum is not that high yet, I would prefer a local bank to one that can only be reached by phone or email. You can probably negotiate better with them in case of problems. And I prefer to rely more on security than the lowest price.

And yes, a prefabricated garage was also my plan. Roller lawn, however, not; I was thinking more of some topsoil + grass seeds. For the outdoor area (terrace, garden), I would have no problem if it only developed "bit by bit." I just don’t know if the terrace can also be easily added later or if it should ideally be done together with the house construction.

Next week, I probably still have a few viewing appointments with house sellers, and if nothing comes of that, I will probably embark on the adventure of "building a house"...

With so much equity, I wouldn’t worry at all about the “if,” but rather about the special requests. The typical builder probably has around 60TEUR equity.

Hello,

Maybe a stupid question, but what is a financing broker and how does he differ from a regular banker? For the financing, especially since the financing amount is not yet so extremely high, I would prefer a local bank over one that can only be reached by phone or email. It is probably easier to negotiate with them in case of problems. And I rather rely more on security than on the lowest price.

Oops, I actually assumed I had answered this question; sorry.

A banker exclusively uses the material made available to him by his employer. In most cases, a specific in-house program through an insurance company affiliated with the bank or similar. They tend to avoid KfW programs because no commission is paid; you pay for your banker's effort.

An independent financing broker looks closely at your situation – professionally as well as, for example, tax-wise. Then he puts together the optimal solution for you from the financing programs available to him, including KfW funds if interesting for you; the lowest rate is not always the cheapest for your private situation. His commission is paid by the banks financing your [BV] and: he is 100% liable for advisory errors.

An independent financing broker should – like your bank – be easily accessible for you; I didn’t mean internet financiers ;)

Best regards

The problem is that such independent brokers also earn their living by securing the most profitable contracts for themselves for you. I do not claim that there are no reasonable brokers who act in the customer’s interest, but I cannot assess it due to lack of expertise (otherwise I wouldn’t need a broker). I would prefer a broker to whom I pay a fee so that he takes over the search for me but does not benefit from the respective contracts himself. But where can I find something like that? :)