Bank offer attractive or not?!

Hello everyone,

first of all: it was our first appointment at the first bank (main bank). We will still have other appointments, but I just wanted to get an assessment.

It’s about our house that we want to renovate. We are currently collecting quotes from craftsmen and calculating how much we can manage ourselves. Nevertheless, we have already estimated the costs and told ourselves that we want to budget a maximum of €200,000. (Equity was used up for notary costs and for new furniture and the parents' move, so there isn’t much left there.)

Now the bank has basically made us a first offer with 1.7% interest and a 20-year fixed interest period. A payout of €50,000 for free disposal, so without invoices.
Is something like that usual with the €50,000 without invoices or is that already quite high? I have only ever heard of €10,000 up to max €20,000 being paid out without invoices.

We also still have 2 Wohnriester contracts which we probably cannot use. We signed these back then because we thought we would build or buy. Now fortunately we are spared buying or building. Unfortunately, we were told that we cannot use the Wohnriester for renovation (it is still to be clarified regarding age-appropriate remodeling, e.g. level-access shower). Unfortunately, we didn’t think about that back then and have already put quite a bit of equity in there which we could only get out again if we repay the subsidies.

Do you have any recommendations or a first assessment of the bank’s offer?

Hello, so the house was transferred from the parents to you and is free of encumbrances?

What is the current value of the house and how reliable is the estimate of 200k? Have you obtained any offers for that?

50k available at your disposal is already considerable. However, it is important that you can renovate everything within the set budget.

Yes, exactly, it was transferred to me and is free of encumbrances. The only thing is the grandfather's right of residence, which we would have to place in second position (which is not a problem).

The house next to us was sold for €130,000, but since we have more living space, a slightly larger plot, and 2 garages instead of one, I estimate at least €150,000 at the current asking prices, maybe even more.

We are currently in the process of obtaining the offers or waiting for the offers. We have spoken with a few acquaintances and read a lot about what can be expected for which trades, and we have also included a buffer there. So the €200,000 should be realistic, maybe even less.

You just have to weigh what you want. Flexibility, so the 50k flat rate, or better conditions.

I don’t know how many square meters the place has, but 200,000€ sounds like a complete renovation: that is, everything brand new from plumbing, electricity, roof, and interior finishing.

Are you sure you really want to pay 50,000€ cash to craftsmen without a receipt?? Or do you want to buy materials yourself for 50,000€ and do the work yourself? Then you would have a receipt and could submit it. In that case, you would have negotiated incorrectly with the bank, because the offer currently obviously includes the black market or consumer goods surcharge for the 50,000€ cash amount.

Have you completely understood the Bau Riester and the disadvantages that result from it? Then the only option is actually to stop immediately, convert into a normal Riester, or dissolve it. 1.7% for 20 years is actually not bad for an almost 100% financing. The house will not be worth 350,000 € later. Does grandpa have a separate apartment and pay rent?