Tips about buying your future house: 5. What are all these “super homes for nothing” and who are their… “developers”?

Investment in a new house (some call it a villa too) is more difficult than an apartment inside the city. It requires more personal involvement and the resolution of many problems which at first glance appear as "easy". After the "first wave" of investors in this segment (2000 – 2004) and the second one (2005 – 2008), during 2010 the market clearly heads to a new direction. People are more careful and "opportunities" are analyzed thoroughly by everyone. As the crisis deepens, we all hear many "voices" about "super homes at minimal prices", plus there is a very big discussion regarding the ability of some people to build homes at really very low prices. What is the truth behind all these?

The "clever" people who succeed to build with "almost 0 cost"

The first time that I heard about this "idea for easy money" was in 2006. A colleague of mine was explaining to me how easy it was to make money: "You buy a land around Bucharest, you build two semidetached houses until the level of bricks (it is called "la rosu") and you sell with double price than your investment". "And they will not check the quality of construction, the design, the right connection to utilities?" "Boss, you are crazy, romantic and naïve. People want to buy cheap and cheap is what we should sell, almost everyone is doing the same nowadays".

Hundreds, if not thousands of "clever guys" did this business all around the country. 80% of them delivered houses "la rosu" or finished in a very bad condition, without respecting not even the basic rules for building something for human beings to stay in. Everything was supposed to be constructed fast, with very low cost materials, with the cheapest possible labor cost and 0 quality control, in order to be sold at the lowest possible price. How many of them respected the end users of these houses? Don't ask me, you will not like my answer…

Why most of these houses are not good for you

Couple of months ago, I got involved in the "task" to help a friend buy a house (call it "villa", it is the same) in the northern outskirts of Bucharest, from Pipera up to Corbeanca. Budget from 80.000 to 200.000 Euro. We checked about 70 properties,  50 of them were "turn key". According to my friend, he found:

• Too many ugly houses. Their design was…
• Very high prices. Their price did not represent a fair "money for value" deal.
• Too many "tiganie" in the construction. You know, these mistakes done by workers who don't care, leaving behind ridiculous problems that need too much time, effort (and money) to be repaired.
• Very cheap materials.
• Extremely bad interior decorations. Very bad distribution of spaces, plenty of "not possible to understand why they did it like this" things.
• Insufficient isolation.
• Very expensive price, when the house was just "as it was supposed to be".
• Locations combined with all sorts of problems. From narrow streets to problems with electricity etc.
• 90% of the houses at the stage of "la rosu" had their bricks placed so bad, that a simple earthquake would demolish them. He obtained reasonable questions regarding the quality of structure for the houses which were finished.

Rare exceptions which simply confirm the rule

He just identified 4 good properties (out of about 70) which could be an option for him. These rare exceptions simply confirmed the rule. The cost of construction in their case was much higher than the other ones, the developer was over viewing himself every stage of construction, plus he really cared about the final result, he had photos etc.

What is basic, is usually described as "advanced"

There are too many people who claim that "If you want to construct a house, the price is 300 – 350 Euro / sq.m". But they look at you like an extraterrestrial, when you ask them for:

• Civilized quality of materials
• Proper interior decoration,
• Good installations and isolation.
• No 'tiganie" by the workers (who are very good when they want, but 90% of them simply don't care and prefer to let ridiculous mistakes be visible, just in order to save 3 – 5 minutes for one more cigarette or beer)
• And everything else that a normal, civilized house should include in its "basic" package.

They call all these as "expensive" or "advanced", even… "luxurious"! This is how they reach the conclusion that "if you want a nice simple construction, the cost is 300 – 350 Euro / sq.m. If you want something "luxurious", the cost can climb up to 600" (!) By coincidence, more than 50% of the houses built within this range of price (300 – 350 Euro / sq.m.) have a big list of problems even during the first five years after their sale.

Believe it or not, they are an exception!
You can think that I am joking or that I try to promote something because of interest. Well, you are wrong! I simply have seen several prefabricated homes (not wooden ones) which can be delivered at a very low price (350 – 400 Euro / sq.m.) and still have a very good quality of materials, finishings etc. Why is that? Because they come from a factory and all their costs and construction can be easily controlled.

Be skeptical when you hear about very low prices…
I don't tell you that it is impossible, but it definitely difficult. And allow me to have my doubts about how lucky you will be in order to find the honest developer. Whenever you hear about very low prices, be very skeptical and ask the help of an engineer or an architect, in order to verify everything regarding the construction.

Important tips to refresh your memory with:

I have already explained to you how important are location, utilities and access to your property. Read more about them here.

Also I had focused on the potential added value that you will gain by investing close to a forest, a hill or a lake. Refresh your memory here.

Don't forget that a land for a house is an investment and it should be treated accordingly. Check out why here.

Last but not least, there is too much talk about major public infrastructure, sports facilities and available schools for your children, in case you buy a land out of the city. Check out the reality here.

Coming up, every Monday:

• Quality of construction: A… "painful" story…
• The "map" of Bucharest: Where is good for what

• Can we consider a land located on a plain agricultural field as "a land in the center of nature"?