New buildings are rare. Would you rather try to get hold of an existing building and renovate it? Many builders do not have this choice at all. What to look out for when buying an aging property.
Build new or buy used? Real estate buyers currently have little choice. Building plots are rare, new houses and apartments from construction companies are often already sold before they are even finished. What remains are older houses from the stock. According to the Association of Private Builders, many homes from the 1960s to 1980s are currently coming onto the market. But is it worth buying and renovating such a house? Does buying a used property have advantages over building a new home?
It is important to carefully weigh the pros and cons. “The fact that it meets today’s technical and energy requirements speaks for the purchase or construction of a new property,” says Corinna Kodim from the House Owners’ Association
The buyer usually acquires an existing building as seen. “In the vast majority of cases, the seller excludes the guarantee in the notarial purchase contract. This is intended to prevent the seller from being liable for possible defects after the sale,” explains Peter Burk from the Institute for Building and Living in Freiburg. Defects that are fraudulently concealed are not covered by the warranty exclusion. But there is still a risk for the buyer.
No purchase contract should be signed without a detailed inspection of the house. “However, many prospective buyers overlook the fact that not only the number of rooms, layout and location are important when choosing a property, but also the building fabric, type of construction and technical equipment,” says Peter Burk. No one would buy a used car without seeing the engine or taking a test drive.
But houses are often bought without the boiler room being inspected, let alone the heating and building services being tested at all. Defects can cause significant additional costs due to necessary renovations.
“Typical defects in older houses are moisture, lack of waterproofing, wood damage, defective windows, defects in the roofing and plaster damage,” says Ulrich Zink from the Federal Association of Old Building Renovation in Berlin. “Depending on the type of building and construction, however, the defects vary.” He generally advocates giving older houses a second chance. It is not only advantageous to bring them up to date for economic reasons, but also from an ecological point of view.
In times of climate change and rising energy prices, investments in existing buildings make an important contribution to climate protection. Those who maintain and develop them conserve scarce resources. This is not only sustainable and ecological, but the owners of existing buildings can also increase the value of their property, according to Zink.
When comparing prices, it is not generally possible to say whether new or used properties perform better. “That depends heavily on the location and condition of the houses,” says Peter Burk. “A seller who offers his well-maintained home in an attractive area on a large lot usually knows what it’s worth.” It could be cheaper if properties are not up to date and still have to be renovated. “Then the purchase price might be a little lower, but then you need additional money to make the property fit,” says Burk.
The financial risk should not be underestimated if, for example, pollutants or toxic chemicals were installed. And that is often the case. “The topic of construction chemistry started in the 1960s,” explains Burk. He advises never buying an older home without first having it inspected by a proven independent expert. He also explains why: “For decades, pollutants that are harmful to health and the environment have been installed. They have to get out of the house or at least be safely housed in, which means additional work and higher costs.”
Marc Ellinger, builder advisor at the VPB and head of the Freiburg regional office of the consumer protection association, recommends not only having the house checked for such substances, but also having the costs for the legally required documentation and disposal of pollutants calculated as precisely as possible in advance. It is not uncommon for it to turn out that a conversion with the necessary clean-up of harmful substances can end up being more expensive than demolition and new construction.
But not only pollutants can become a problem. “The worst is moisture damage, which is deep in the masonry or in the wooden structure and can endanger the statics,” says Corinna Kodim. “Here too, in the worst case, the house could be torn down.”
A disadvantage of older houses is often insufficient thermal insulation and a lack of soundproofing. “Even the year the house was built can provide clues as to how and with what building materials the house was built,” says Burk. “It was only from around the 1960s that fire, noise and heat insulation and moisture protection in the basement were taken into account when building and building physics received the place it deserved in house construction,” explains Burk.
However, that does not mean that every house has to have such typical defects. According to Burk, many houses from these years of construction have since been renovated and modernized. Many have received full thermal insulation, new windows and doors, a new floor structure with impact sound insulation, central heating, a new roof and much more.
If the older home is well maintained and largely in good order, turning it into a comfortable and energy-efficient property can be a worthwhile project. Kodim: “The floor plan and the size of the rooms are largely predetermined. But with a little creativity, a modern home can be designed from it.” The advantage: The buyers can move in immediately after the purchase and gradually modernize the property. A long and uncertain construction period – as with new construction – is eliminated.
Burk advises to first modernize the areas that directly affect living comfort. This is usually the interior. “Many buyers start with bathrooms, kitchens and floors, install a modern heating system and bring the electrical installation up to date.” There is still time later for windows, roof renovation and facade insulation.
According to the Building Energy Act, new owners have to carry out some renovation work. “This includes replacing the oil or gas heating system if it is more than 30 years old, insulating the roof or the top floor ceiling, and insulating heating and hot water pipes,” Kodim lists. The buyer is obliged to do this after a change of ownership. “These measures serve to improve the energy balance of the building.”
Renovation and conversion of existing properties often end up being more expensive than expected because special requests from buyers creep in. Ulrich Zink therefore advises creating a precise program at the beginning so that it is clear where the journey should go. “Especially now, when building materials are expensive and construction professionals are scarce, it is important to calculate everything well in advance so that the renovation of an existing property does not turn into an uncalculated adventure.”
(This article was first published on Monday, January 16, 2023.)
