Wednesday, 27 August 2014

Fixing the financing and the meeting with the notary

The bank sent me all the paper work a couple of weeks ago and my financial broker wanted to set a meeting asap. Unfortunately this had to wait until the middle of the next week due to work but this was still well within the eight days limit that the offer was valid for. I had to do a PostIdent (a confirmation of identity using a passport at a local post office) but that is very simple and I could get that done right away. At the meeting with the financial broker we went through the contract and he answered any questions I had, which were very few, in fact the contract was amazingly simple, particularly when compared to others I have seen recently. It also turns out that I don't have to fill in all the claim forms, I can simply forward the receipts to him and he does it for me.

The bank paper work also contained the document that is needed by the notary and should be sent in advance, as this was Wednesday evening and the notary meeting was the following Monday I drove to the notary's office very early on Thursday to drop off the document by hand. Thankfully that appeared to be enough time because all was in order for the meeting. The seller of the land was there and the notary read the entire 20 pages of purchase contract out loud in front of the two parties. Occasionally he stopped and decoded the legalese German into normal German for me and removed a few paragraphs that have no meaning in this case. Then we marked out the plot of land on the map and signed all the documents. Technically I'm not the owner of the land until the developer is finished and it can get it's own entry in the land registry but it's close enough. I now own a small piece of Germany!

Despite being a rather formal procedure the meeting with the notary was quite friendly and straight forward. I suspect that if you speak German better than I do it would be rather useful if you need more clarification. It's pretty expensive though at 1.6% of the purchase price!

While we were waiting for the notary I took the opportunity to ask the developer (just back from holiday) about the schedule. He said that everything was in schedule and the last meeting should be today, then they can do the tests they need next week and then start work the week after. He estimated eight weeks until the plot would be ready. With a bit of a margin that's the beginning of November. Hopefully they can stick to it and we can get the ground work done before the ground freezes!

Sunday, 10 August 2014

Setting the meeting with the notary and confirmation from Allkauf

It's been a week since I signed up with Allkauf. The agent for the land wanted to set a date for signing the land registry with the notary. Unfortunately my financial broker warned that it can take a bit more time to get the necessary energy efficiency certificate for the plan from Allkauf (needed for the low interest rate loan from the government). Thankfully the agent was happy to put the meeting back a week which should give us plenty of time.

The firm doing the ground testing for water table and strength have been in contact but can't do anything until the whole area is divided into plots. This is important as the affordability of the basement is dependent on the cost of the groundworks (which will be estimated from this result).

Allkauf called me on Friday to check to see if all was going ok and if I needed an appointment with the. For now that's not necessary but it's nice that they're keeping in contact. At home there was the confirmation form Allkauf HQ of everything we had discussed the week before.

They also gave me a log-in for their client website. At first glance it's all pretty daunting with lots of required tasks for the client. But taking it one stage at a time I hope it will be manageable.

Choosing a house

The next step was to choose a house. In Germany there are many firms who produce prefabricated houses. These are not the prefab buildings that most British people will be familiar with; post-war short term poorly insulated and often damp housing, that like the temporary prefab class rooms usually are used well beyond their intended life-span.

The prefab housing in this case refers to walls and roofing sections that are built in a factory under controlled conditions, sent to side on the back of a truck and then assembled (usually) in a matter of days. You can build prefab houses from concrete sections but wood is far more common. I ended up speaking to five companies in detail. Some were simply too expensive but two (and maybe a third) had houses that were in budget and could give me the house I want. All promised to walk me though the procedure, had long guarantees and short build times. What was more worrying was the disparity in extra costs that each firm calculated for the budget, in some cases there was a 30% difference in that value.

In the end I went for Allkauf. They are a prefab, wood-build housing firm and part of the biggest group in Europe. They had a good deal on a house about the right size, with a good price for a basement, an included garage and kitchen. I've also included the gable (as seen in the picture) and a fireplace both of which are extras.

They are only responsible for getting the house constructed and exterior finished. The interior is down to the client. They do provide most of the material (drywall, insulation, screed, flooring, tiles, paint) but it all needs to be installed. They have expansion packets that include the labour certain installations. 'ProTime' provides the installation of the electrics, heating and plumbing. Other packets would do the screed and drywalling etc however I hope to be able to do some of this myself and even if I do get professionals in (say for the screed) then it will certainly be cheaper to do so independently.

The Allkauf seller was very good and patient with my poor German. They also work directly with a local finance broker who was able to provide a deal as good as any I had been able to get from the three banks and two brokers I had spoken to. After some cold feet the night before I signed the agreement to start the process.

The plot

Like the houses in NRW good plots of land do stay on the market for long. In fact most of the house building firms offer a 'plot service' to help find suitable land. No sooner had I started going through appointments than a plot became available in a small village less than 20mins drive from work. It has good fixed line internet speeds, LTE, gas and a direct bus to the central station.

I didn't waste any time and set an appointment to meet the seller. It's currently a sports field that will be split into twenty-something individual plots. I reserved a corner plot furthest from the L-road (similar to a B-road in the UK). Not that the L-road has much in the way of traffic but it does come with noise restrictions that have to be considered.

Work should start in August once some migratory birds have left for the winter. The road and sewer connection should be built in the months following. Hopefully the plot should be available for the start of construction in November.

The next step is finding the house building firm and getting the financing sorted out.

Why build?

I've been drawing my dream house for as long as I can remember. As a young adult I developed a secret addiction to architecture documentaries and home development and improvement shows. Over the years my ideas and tastes started to come together into a grand design of my dream home. However as time passed there was the growing realization that, like the Aston Martin in the driveway, the house would remain a dream.

This is not going to be the realization of that grand dream but I hope that it will be the realization of a more modest but equally important one. Now that I have a permanent and stable job the plan was to finally stop paying rent and buy a house. I live in North Rhine-Westphalia, the most populous part of Germany and with the interest rates so low the normally frugal Germans are busy investing in property. With my modest means I am at the crowded end of the property ladder, the few houses that do come onto the market are quickly snapped up, usually well above the asking price.

So I was left with the option of going for something much smaller or finding a plot and building on it using one of the numerous house building firms that exist in Germany. The financial risks associated with building are significant, but it's the only way I will be able to afford what I want and so I will have to accept an element of risk and minimize it where possible.