We are thinking about buying a plot of land

Hello everyone,

I am new here and would like to get your opinion.

My husband is 36 and has a monthly net income of 2500 euros.
I am 31 and earn 2000 euros net.

We have a 3-year-old daughter.

Now we are considering buying a plot of land and building.

The fully developed plot should cost 84500 euros for 589 sqm. It is without a builder contract.
We want to build a house on it with a maximum of 125 - 130 sqm. It will be a gable roof house with an elevated knee wall. (We are currently waiting for the prices and floor plans from the builder.)

Our equity currently amounts to 82000 euros. We save at least 1000 euros a month. Mostly more.

Our bank advisor said that for about 220,000 euros we would have to pay a rate of 800 euros. Which is not much since we currently pay a cold rent of 951 euros.

We are thinking about not using all the equity in order to still have a buffer for one or another spontaneously occurring problem.

How much equity would you use? We want to spend a maximum of 300,000 euros in total. (without furnishing and landscaping)

So for house + plot + incidental construction costs 300,000 euros.

Is that realistic and with what interest rates can one currently expect?

Best regards

Yes, the more equity you invest upfront, the higher the loan-to-value ratio. However, there are also expenses that do not hold value for the house (EBK, furniture, notary fees, etc.).

The experts will surely advise on how much amount to withhold for the construction.

You want to pay 220k for the 130 sqm purely?

If I were you, I would get alternative offers. Also gladly from brokers. That way you get a feel for how much equity investment makes sense to get a good rate. Sometimes 90 or 85% loan-to-value ratio is enough for that.

Definitely make sure to arrange a long fixed interest rate and rights for special repayments.

Good luck!

300,000€ including all ancillary construction costs and land - the land alone is already not covered.

There is the notary, not only for the purchase but also for the land charge. Plus the land registry office.

Then the property transfer tax.

Soil survey.

Surveyor.

Insurances.

Construction supervision.

Internal development (i.e. supply and disposal lines from the property boundary to the connection room in the house).

At least the access path to the house should also be made. Otherwise, you run through the mud for months.

A non-negligible five-figure amount can quickly be gone there.

We withhold over 13% equity of the estimated gross total project (including all costs, fees, and charges) for unexpected expenses.

You want to pay 130 sqm for the pure 220k?

In your place, I would get competing offers. Also gladly from brokers. That gives you a feeling of how much equity contribution is sensible to get a good condition. Sometimes 90 or 85 % loan-to-value ratio is already enough for that.

In any case, make sure to get a long fixed interest rate and special repayment rights.

Good luck!

Thanks for your answer!

Honestly, I didn’t understand the first sentence.. Sorry, since I’m new, I don’t know all the commonly used abbreviations here :)

Our house bank already grants us the special repayment rights and an annual repayment change!

€300,000 including all incidental construction costs and land is simply not going to be enough.

There is the notary, not only for the purchase but also for the mortgage. Plus the land registry office.

Then the land transfer tax.

Soil survey.

Surveyor.

Insurances.

Construction supervision.

Internal development (i.e., supply and disposal lines from the property boundary to the connection room in the house).

At least the access road to the house should also be done. Otherwise, you'll be walking through mud for months.

That's quickly a significant five-figure amount gone.

We keep over 13% equity of the estimated gross total project (including all costs, fees, and charges) reserved for unexpected expenses.

Thank you very much for your response!

Although I don’t want to build "at any cost."

Either €300k is enough or I won’t do it, that’s it :)

We are talking about a 125 to max. 130 sqm house here. Without a garage. The building specification of the developer is already very good, so apart from underfloor heating on the ground floor and a decentralized ventilation system, there are no special requests.

Maybe I’m just too naive. But I think the "pure" building will cost a maximum of €170k. And €50,000 for the incidental costs you mentioned should be sufficient!

I will receive the price quotes in about 10 days, and of course, I will report on how close my estimate was ;)

Hello Yaso 2.0,

I’m afraid that EUR 170,000.00 will not be enough for the house. EUR 50,000.00 for ancillary construction costs, on the other hand, should be sufficient.

You write that the construction description is very good. What is especially important in the construction service description(s) is also what is not included. That then costs extra.

Just as a hint, take a look, for example, at the electrical equipment. Are the specified sockets, lamp connections, antenna connections, telephone sockets enough for you....
For example, we alone spent EUR 13,000.00 on additional electrical equipment for our single-family house – and our construction company is already one of those that include more than the standard in the base price.

How about foundation costs?

Is the ground load-bearing?

If you are building with a basement, is drainage around the house enough or does a basement made of WU concrete have to be built?

I am looking forward to your offers.

Regards,

Dirk