Land now - house construction next year

Good morning everyone,

thank you very much for the overall constructive criticism of our project and the many useful tips and suggestions!

Our limit is, as mentioned, a rate of €1100 per month; if we cannot achieve this goal, we will abandon the whole thing. I can assure you that we can easily manage €1100 per month, as we are currently saving €1000 per month alone (wedding + honeymoon, new car, etc.), which we would have "free" starting from May next year. In addition, there is a cold rent of about €400 at present.

Reserves for wallpaper, flooring, etc. will be available at the time of completion.

I have also looked at other offers in our area, and all are priced in the region of our offer. I have also learned that the price per square meter for buying a house here in the area is on average below €1400.

I would therefore like to return to the original question: how is it best to proceed with the financing? Take out a partial amount for the land first, or immediately the full amount (where certainly commitment interest will be incurred)?

Best regards
Michele

Our limit, as mentioned, is a rate of €1100 per month; if we cannot achieve this goal, we will abandon the whole thing. I can assure you that we can easily manage €1100 per month since we are currently saving €1000 per month alone (wedding + honeymoon, new car, etc.), which we would have "free" starting from May next year. In addition, there is a cold rent of currently about €400.

but you should not forget that your additional costs will also increase (extra insurances, taxes, etc.) and that you might sometimes be left with less than €3000... keyword pregnancy/children...

I also looked at other offers in our area and all are priced in the range of our offer. I also learned that the price per sqm for buying a house in this area is on average below €1400.

Of course, all the providers advertise the same low price... everyone wants to get the contract! That it ends up costing the customer 20,000-30,000 more is then not their problem...

If you are building in a new development area, then visit your future neighbors and talk to them about the planned/actual costs... preferably with comparable houses or as you envision your house.

How much is the land price per sqm in your area?

Reserves for wallpaper, flooring, etc. will be available at the time of completion.

Hehe, I also thought that huge chunk of money in the savings account would be left over after the construction. Now it's almost completely allocated due to unpredictable additional costs.
Just 15,000 more for the earthworks. And our plot has absolutely standard soil without any slope.
The only problem is that it is 10 cm lower than the street. That means backfilling. And the development plan demands almost 5,000 € extra because we have to align with the neighbor.

No house provider can or will tell you about such items. These are items that only come up after signing the contract. Our advisor told us that we definitely have to calculate at least 20-30,000 € additional buffer. In 80% of his clients' cases, this is indeed needed.

So don't calculate on saving money during the construction phase. That will not happen. And assume that when you plan your house, you will inevitably generate additional costs. One more window here, one more little wall there... Fireplace? etc etc. We changed a lot in the floor plan after our architect drew in our furniture because we simply don't want to live with compromises for the rest of our lives just to have saved 5,000 € during the house construction.
We had to add several windows to realize a bright living area. And building without a basement also brings challenges that require very individual solutions. You have to plan storage-oriented.

Hello,

These are items that always only come up after the contract has been signed.

Yes, unfortunately, the word "founding additional costs" is something many so-called sellers have a hard time saying :mad:

Our consultant told us that we definitely have to calculate at least €20,000-30,000 additional buffer. In 80% of his customer cases, it is really needed.

I wouldn’t have expected anything different; as I wrote, I know your provider as a reputable competitor. Also one who pays attention to the appearance of his salespeople.

No, dear community, I do not work for the provider to whom "Der Da" has given his trust ;)

However, I would like to use this post to point out that no new building can be constructed without these founding additional costs. In some cases, it may only be a few thousand euros that count, in others two-digit figures, because a soil replacement – based on the information from the soil report – is also required.

Such items no home provider can and will tell you (want to).

The fact is, he cannot say it because at the time of signing the construction contract nothing is yet known about the construction site to be provided by the customer. This important information only arises from the preliminary layout plan (height above sea level, etc.) and the later soil report.

However, every reputable salesperson will inform their customers early on about founding additional costs, because there is hardly anything more fatal/more expensive than a subsequent increase in financing. I know that this is often and gladly concealed by a high percentage of sellers. This is one of the reasons why I always and again post the list of ancillary construction costs here in the HBF ;)

Kind regards

I would also like to hear an answer to the original question: are there disadvantages if you buy and (partially) finance a plot of land and only start building the house later (months up to 1-2 years)?

Or is it better to finance everything at once?

Thank you!

Hello

That can all have advantages or disadvantages.
If you first finance the land, then the financing Bank A is in first place in the land register.
If you then want to take out a loan for the house independently, then the second Bank B can no longer be in first place in the land register.
That means the security is correspondingly lower for the bank – so the interest rates are higher.
Or you finance the house also through Bank A – then the bank knows that you have a weaker negotiating position – meaning they don’t necessarily have to give you the best offer since you are already committed...

On the other hand – if you have now found the right land – who knows when you will find another good piece of land...
That is not so easy...
And who knows what the interest rates will look like in 2 years...
The offer from the bank has to be just as good in 2 years so that you can afford it.
Personally, I would accept higher interest rates and a higher monthly burden – as long as I can easily afford them! – to realize my dream of owning my own house...

Regards
Micha :cool: