Purchase of a single-family house

Hello,

after reading along in the forum for a long time, I have decided to briefly describe our case as well, and I would appreciate responses and short assessments.

My boyfriend (32) and I (also 32) have been looking for "homeownership" for about 2.5 years. In these 2.5 years, we have gone through all kinds of phases – at first we dreamed of a new build, but the situation with plots in our preferred area looks bad (no new areas opened up, few building gaps too expensive), so last year we increasingly looked at existing properties and also viewed a lot of them. However, most were simply too much in need of renovation, and since we both have little time and no training or experience in handiwork, we would prefer something "move-in ready."

Long story short: last week we found a nice property located in the ideal location for us. The price, however, is steep, and we hope for willingness to negotiate (price is given as a negotiation basis).

Here are the key facts briefly:

- House from 1980, since 1999 flooring, windows, insulation, and heating in 2008 were renewed
- Plot 700 sqm ([square meter price of the surrounding plots: 280 euros/square meter]), south-facing slope location
- Living area 250 sqm
- Price (negotiation basis) 360,000 euros, however 3.57 percent broker fee (real estate transfer tax for us 4.5 percent)

Our combined income: 5,100 € net
Available equity: 90,000 euros

The house is in really good condition; however, we will still inspect it with an expert.
However, our limit has so far always been 350,000 €, and it is hard for me to give up this, albeit rather psychological, limit, especially since after long internet research I got the impression that a loan of around 300,000 euros is apparently extremely exotic and most people seem to find houses between 200,000-300,000 euros...

My question is: Is an amount of about 300,000 euros feasible with our income? Is it "madness" to take out a loan of this amount? Are there perhaps people in a similar situation?

If I, for example, could only work part-time because of children, our income would decrease to about 4,100 euros.

I would appreciate an honest assessment and an "outside perspective!"

Thank you in advance!

Kate

I'll write down a few thoughts.

First of all, the price is very high, but if you subtract the land value (just under €200,000), not much is left for a house of this size. €160,000 for a house of this size is at least suspicious to me. Around here, the land prices are sometimes even much higher and the houses on them are also traded at higher prices.

Speaking of size, do you really want 250 sqm of living space? All of that also needs to be cleaned, or rather lived in. That might not be a problem now, but in old age, you'll have more trouble than joy with it.

I don't see the loan amount of €300,000 as a problem. Sure, you take on something, but if it's a good property, it's worth the risk :)

Your problem is, it doesn’t stop at €360,000... the broker still wants €12,000 and then the government another €17,000. Also, smaller changes in the house, usually you might want a different floor, etc.

And I have to say, for a 30-year-old house, that’s pretty tough. However, I don’t know anything about the renovation status. Oh yes, costs for the expert, etc. also come on top. You could really build your own for that.

We moved out to the countryside and accepted a 30-minute drive to the city, and reduced the usual land price to about €120/sqm instead of €400/sqm. Then the house suddenly became possible, and instead of 400 sqm towel size, we have almost 800 in the countryside.

Maybe there were a few questions in there, :)

Hello Kate,

Here are the key data briefly:

- House from 1980, since 1999 the floor coverings, windows, insulation and in 2008 the heating were renewed
- Plot 700 sqm (square meter price of surrounding plots: 280 euros/square meter), south-facing slope
- Living area 250 sqm
- Price (negotiable) 360,000 euros, however 3.57 percent broker fee (property transfer tax here 4.5 percent)

The house is in really good condition, however we will still inspect it with an expert.

At first glance, your details read very positively – now comes the "BUT" –
I don’t need to tell you anymore that you have to bring in an expert. This is all the more important because only he alone can assess the offer and possibly identify pitfalls. The plot share will not be reflected 100% in the offer price, probably only proportionally to the built-up area and decreasing for the adjoining garden area. Only in this way can the – in my eyes – favorable selling price of the seemingly well-maintained detached house be explained, because in new construction a detached house of the size 250 sqm would already cost around EUR 15,000 more than your investment sum. Always assuming it really is 250 sqm of continuously maintained, pure living area and not – as is not uncommon in the sale of existing properties – including utility areas and possibly a utility cellar at 100%.

I would appreciate an honest assessment and an "outside perspective"!

You should be able to manage the financing, even if children come into play; nevertheless, I remain consistently reserved here because every financing must be considered individually, and you should have this conversation in "private" with an independent financing broker.

As far as the additional costs of the favored property are concerned, sales prices generally represent an offer and this offer must meet a person willing to accept it. It is your decision whether you accept or rather reject – the "psychological" limit will expand if this detached house exactly matches what you wish for and can manage and if your expectations are confirmed by the expert you bring in.

Wait for the inspection with the expert, or the appraisal report, and see to what extent the seller is willing to accommodate you; it also depends on whether it is a distress sale or if the seller has all the time in the world.

Best regards

Thank you for your detailed and interesting answers!

@DerDa: You exactly address the dilemma that I/we find ourselves in. Moving a bit further out to the countryside and building... or buying close to the city. At the beginning of summer, we were already ready to buy a plot about 20km from "our" city, but then the realtor suddenly remembered, after we had visited the plot with all family members and approved it :) , that the seller had already sold it without his knowledge and hadn’t informed him. – So we had to start from scratch again... Such stories have happened to us abundantly in recent years, so I actually have had enough of the realtors in this area by now (exceptions prove the rule!). Just as we said, let's wait through the winter and then look again, this house caught my eye! Actually, you are right, and a new building would have been my dream for a long time... however, there are also risks involved since I really don’t know anything about the construction industry and a lot of time needs to be invested. It now seems that buying might be "less problematic"? How do you handle it, do you "have" houses built (turnkey, shell house)?

The living space is a tricky matter. The building expert made me realize that possibly the basement (2-story bungalow, the lower floor is half basement) is included. I urgently have to ask about that. Since we need 2 workrooms in the house, the size would be quite good, the overall room layout would fit perfectly, also a fireplace, underfloor heating, and conservatory are included. Overall, we had wished for about 170-180sqm, it could be about right if the rest is basement.

@Bauexperte. Good question about the living space... I suspect the "partial basement" is included, I urgently need to find that out. Regarding the emergency sale, I have received conflicting statements from an acquaintance who lives nearby (the "people" wanted to sell because of a professional move), but neither the realtor nor the seller shows any hurry (tactic?), on the contrary, they talk about moving in next spring. I am curious about the appointment with the expert, but it will take a while; however, I will provide feedback here (also because I myself am always interested in reading how these stories turn out). The feedback on the financing amount sounds positive, thanks, of course it still needs to be planned carefully. We have no problem getting the sum from the bank (we had already inquired for another property), as said, it’s about the feeling, especially compared to my sister-in-law and brother-in-law, who built a beautiful turnkey house with a 900sqm plot in the countryside for a total of 250,000 €, including a double garage... that definitely makes you think!

But before I write novels...:

Thanks again and have a nice Sunday :)

P.S. The roof is NOT new by the way and the renewed heating system still uses oil – I wonder how much one can reduce the purchase price without sounding too nosy?

Hello Kate,

The living area is a bit of a thing. The building expert made me realize that possibly the basement (2-story bungalow, lower floor is half basement) is included. I urgently need to inquire about that.
Since we need 2 study rooms in the house, the size would indeed be nice, the overall room layout would fit great, also fireplace, underfloor heating, and conservatory are included. Overall, we wished for about 170-180 sqm, could add up if the rest is basement.

@Bauexperte. Good question about the living area... I suspect the "partial basement" is included, need to find that out urgently.

The finished basement may be counted towards the living area; the rest falls under usable basement space.

The indication that it is a bungalow confirms my suspicion regarding the price structure. A bungalow is always more expensive to build than a normal detached house – even in the 1980s ;)

Regarding the matter of the urgent sale, I have contradictory statements from an acquaintance who lives in the neighborhood (the "people" wanted to sell because of a job relocation), however, the realtor and the seller do not indicate any urgency (tactic?), on the contrary, they talk about moving in next spring.

Just stick to yourself – if you "had to" sell something, preferably quickly – would you disclose a so-called "emergency" to a potential buyer? If it becomes known, it puts the seller in a worse position... certainly if there is time pressure. Therefore, he will keep the true reasons under wraps as long as possible.

... compared to sister-in-law and brother-in-law, who built a beautiful turnkey house in the countryside with a 900 sqm lot for a total of €250,000, including double garage... that really makes you think!

Beware of hasty comparisons! How big is the detached house, how far from any connection, etc.? For what you have in mind – 180 sqm living area – you have to reckon around EUR 285,000 for a new build of a KfW 70 efficiency house. Plus EUR 35-40k ancillary construction costs, plus EUR 10k reserve for possible foundation extra costs, plus painting and flooring, plus outdoor facilities, plus EUR 16k for a double garage, plus reserves for extras – plus land! Also in Saarland ;)

P.S. The roof is not new, by the way, and the renewed heating system is still oil – I wonder how much you can negotiate the purchase price down without sounding presumptuous?

A roof on a bungalow – if it needs to be replaced – will be an expensive investment; it depends on the total roof area. With oil heating you have the disadvantage – if you don’t keep an eye on prices in the summer – that you always have to buy at a high price. But it also doesn’t make sense to replace a new oil heating immediately at the beginning; in my opinion, that would be an unnecessary waste of money.

How much you can negotiate the price down primarily depends on the expert’s report and secondly on your negotiation skills. I – just subjectively – would let it be known "between the lines" that you know the seller is moving; of course, this has to come across credibly and your counterpart must not lose face! However, your counteroffer should not be outrageous but stay within a reasonable range – here the expert will also give you a figure. The rest is simply groping in the dark.

Good luck!

update:
Our purchase did not work out because the necessary investments in the house were too high for us, luckily we had an expert with us during the second viewing - I can only recommend this to every buyer.
I thank you for the support here in the forum!

At the moment we are back to square one, so to speak, but the offer here in the city (and within about 5 km radius) in the affordable range is very limited :( and outside is out of the question for us due to work and hobbies.
We have been eyeing an old villa from the 1920s for ages - at least I know that EVERYTHING has to be renewed ;) In any case, unfortunately the old houses have the nicest plots! Appointment with the realtor is next week.

I will continue to report, maybe someone will recognize themselves or maybe our experiences will help a "silent" lurker.

Many greetings from Kate