Living space suddenly only usable space?

Hello everyone,

We want to purchase a property in Baden-Württemberg, purchase price after initial negotiation 420,000 with 150 sqm living space / 550 sqm plot from 1973. In addition to the living space, there is a garage and 80 sqm usable area with 2.4m height raw construction and unfinished swimming pool (this apparently deters many...), i.e. unfinished space.

The house is in need of renovation according to the initial negotiation
- entrance area has a broken tile -> moisture
- in another basement room, you can see moisture on the suspended ceiling (terrace is above)
- roof needs to be redone / insulated
- house wall / basement wall must be insulated
- heating system
- electrical system
- bathrooms (obviously very old..)
- ...

After the initial negotiation (with the above defects, brother-in-law comes from the construction industry and assessed them), the following became apparent upon inspection of the building file:
Two rooms and the roof structure were counted as living space. However, this is not permissible because living space is a habitable room and according to the state building code, the height of 2.3m for habitable rooms and 2.2m for habitable rooms in the attic is not met. As a result, the living space is reduced from 150 sqm to 100 sqm and the usable area is logically 50 sqm higher. Additionally, the missing height has the consequence that although the roof structure is developed, it should not have been converted into living space. Normally, such a change of use is possible without involving the authorities (procedure-free) if the rules / law are followed, but since the height is a prerequisite, this is a roof conversion without a building permit. Upon inspection of the building file, the authority noticed this and said "now we actually have to take action," i.e. ban on use / fine / dismantling /...

In the conversation with the realtor, he was very surprised and said that he wanted to discuss this again with the owner. Note: the price negotiation is also done by the realtor. During the conversation, a counterproposal in terms of price was made, to which the realtor rather laughed.

Since we are taking on an enormous risk (e.g. mandatory raising of the roof instead of roof insulation / new tiles), the following would interest me for the final negotiation:

- Is it actually normal that a bank always wants a living space calculation from the seller for a loan? Shouldn’t they become somewhat suspicious if suddenly 400,000 is demanded for a single-family house with 100 sqm? Or can the buyer simply make a living space calculation themselves and there are enough fools who don’t look closely?
- What price factor can you generally bring up when you distinguish between living space and usable space? Is living space worth twice as much as usable space?
- We simply calculated the purchase price 440,000 minus land value 100,000 (at land reference value=180€) and then deducted 33% of the property value (33% of the sqm). Ergo about 326,000 including land value. Our counteroffer was 350,000€, to which the realtor smiled. Does the realtor just want to negotiate here or is the land reference value really a wrong key figure (even though it is asked for everywhere in valuations)?

I would appreciate your feedback.
Best regards

After the first hearing (with the above-mentioned defects, brother-in-law comes from the construction industry and assessed them), the following became apparent upon inspecting the building file: Two rooms and the attic were counted as living space. However, this is not permissible because living space is a habitable room and according to the state building code the height of 2.3m for habitable rooms and 2.2m for habitable rooms in the attic is not complied with.

Who determined what on what basis? 1. What is stated in the building file and in the building permit? 2. How was it measured? 3. What exactly was the result of the measurement? 4. Did you base it on the state building code of 20.06.1972? These are my questions for now. Now on the subject of "object value." There are no clear guidelines for that. The market alone regulates it. The house has the value that a prospective buyer assigns to it. If now a potential buyer comes and says "I don’t care which centimeters some guy measures," then he pays the asked price. If I, as a buyer, don’t want to fuss too much with the property, I simply buy it and use it as it has been used for almost 50 years. You are looking for a reason to lower the price. As a seller, I would already send you away now and simply end the conversations because I would find the discussion "too stupid." I did the same with my ex-wife with our last house. Someone came for the attic and said the windows were 2cm too small for the fire department. The discussion ended quickly... ...and the house was sold to the next interested buyer.

There is some truth to that. The offered house is as it is. You know it, you know the asking price. Make an offer or leave it. Don’t discuss the house, it is as it is.

You can't use the standard land value ... it lags far behind the market prices ... not even the municipality itself sold us land for this value ...

And regarding the question with the
bank: they don't care if you buy a house for 500K that is only worth 300K ... unfortunately.

The only thing that counts is whether you can pay back the 500K ... with the last house we bought, they sent an expert from the bank ... who had zero clue and basically only checked if there was even a house there ....

And regarding the question with the bank: they don't care if you buy a house for 500K that's only worth 300K ... unfortunately.

In my opinion, you can't say it like that. For the loan, it is indeed crucial what value the bank assigns to the property. If you pay 500k and the bank only sees a value of 300k, with 200k equity you are just at a loan-to-value ratio of 100%, and the conditions reflect that... So they do check (at least that was the case for me), whether the appraiser really knows what they're doing – that may vary ;-)

Well, as I said, each bank can come up with something completely different.... a consultant once just entered the address, the year of construction, and the size of the house we wanted to buy back then, and the value came out 100K below the actual value... because the luxurious features from energy ratings to 3 masonry stoves to the pool were somehow irrelevant in the calculation... so the financing can go either way....

The same now with the new build... I say the house I put there will be worth 800K (for example), so I take out a 350K loan, the rest is equity... the bank says great, let's do it... whether I then put up a solid wood cabin with bells and whistles or a cheaper prefab cabin, unfortunately the bank doesn't know... they only come by when the house is finished, what do they do then if it doesn't add up? nothing.