Bank guarantee for "cash payer"

Hello dear homebuilders,

this spring I will build a small bungalow with a prefabricated house manufacturer.
As a "cash payer" I would receive a guarantee from your savings bank from the manufacturer. The following question arises for me:

1. I only receive the guarantee after paying the invoice (100%) – how can I protect myself to ensure that the guarantee really comes? For example, is it possible to make a transfer that goes into the builder’s account, but is only "released" once I receive the guarantee?

2. Is a guarantee sufficient for a small prefabricated house over 6 months?

3. What happens if the company becomes insolvent during the warranty period?

I know, many questions but maybe some of you have already dealt with a similar case.
Anyway, many thanks for your answers.
Dieter131

What kind of guarantee would that be?

Hello Dieter 131,

what type of guarantee is it supposed to be? Is it a performance bond or a warranty bond?

Hello Freiburgers,
thank you very much for your response.
It is a contract fulfillment guarantee from [Sparkasse Pforzheim], because only after payment does the production (approx. 8 weeks) of the house parts (wooden studs) take place and then the actual house construction.
Only... after the transfer there is a vacuum and pure trust for some time until the guarantee is in my hands.
Thanks again in advance.
Dieter

I would be cautious with 100% prepayment, why not pay according to the construction progress?

Guarantee

Making a payment before work has begun is unusual in my opinion. Of course, the construction company may demand this, but I would not agree to it.

Even with performance bonds, clauses can be included stating that the guarantee only comes into effect once the agreed sum has been paid accordingly. In this respect, the guarantee could be provided beforehand and payment made after receipt. Under no circumstances would I make such a high down payment without having any security against it. The 100% probably refers to a partial amount of the total price, a partial payment. I cannot imagine that the entire house price must already be paid in advance. In my view, that would be completely unjustified and unacceptable.

How long does the house manufacturer need to produce and assemble the parts? That doesn’t happen overnight. Many people think that a prefabricated house can be built very quickly. The assembly is quick. But how long does the production of the parts take? Months can pass here as well. And interest is due on the amount paid in advance.

Thank you very much for the information. That already helps me considerably and I agree that the guarantee clause is the most elegant/secure option, although of course a residual amount remains open as additional security until completion. The times are planned as follows: 8 - 10 weeks production 4 days house construction (on an already existing base slab) 4 weeks for interior work plumbing/electrical/underfloor heating. Additionally, a few days still have to be calculated for the ground-source heat pump (drilling, securing, supply lines). But what was important was the idea with the clause and that helps me a lot. Thanks + best regards Dieter