Construction financing - problems with bank approval

Good evening

We have a question regarding the construction financing or purchase of a building plot

The plan was to buy a plot of land that is to be auctioned in a forced sale. So we located the owners and they are willing to sell the plot to us before the forced sale.

After that, we found a bank with our financial advisor that would be willing to finance us and everything seemed to be running smoothly, now we come to the problem.

In the land register extract there is an inheritance community where person A and person B are registered. Person A's share of the inheritance is pledged to a company XY. An insolvency procedure has been opened against person A and therefore the inheritance community is to be dissolved through the forced sale.

The owners of the plot are willing to do a free sale before the partition auction for the agreed price. According to the owner, the sales authorized persons entered in the land register are not an obstacle to the sale. The heirs of this preemptive right will notarize the release of this right in the next few days. The insolvency administrator of person A is also ready to approve the free sale as well as the secured creditor of company XY. Thus, any other encumbrances in the land register can be removed in the foreseeable future.

The owners are going to the notary next week and he will draw up a purchase contract which will state that the encumbrances in the land register will be deleted.

Our bank then needs the current land register extract showing no encumbrances in the land register, the owner wants a binding commitment from the bank and we cannot proceed. The auction date is in two weeks, by then we will not get a free-of-encumbrance land register extract and therefore no commitment from the bank.

Our question is how do we proceed now, what else can be done to get a binding bank commitment.

Please maybe you can help us further Thank you in advance

Sorry for all the spelling mistakes and the simple wording

What kind of binding commitment does who want to have? I don’t understand it.

The owners want a binding commitment from the bank that they will finance us; only then will they make a purchase contract.

And the bank wants the current land register excerpt without encumbrances, which will only be applied for at the notary this week through a release authorization at the land registry office. That of course takes until everything is registered in the land register, and by then the foreclosure will already have taken place.

Normally, it should be sufficient for the bank that the notary certifies the deletion approval is available and the clearing of the land register has been requested. Karsten

I share this opinion as well, our financial advisor is absolutely convinced that we need it, which I also understand, but the land register excerpt can also be submitted later under the condition that the amount will only be paid once the current land register excerpt is available.