Financing - first bank has declined

725000 is the purchase price? Then it should actually work out well if you only have to take out ~80% of that

Or is 725k including taxes? Then I would have it recalculated, you pay all the taxes (the bank doesn’t cover those anyway) and bring less equity for the actual house

You’ve probably done that, but I heard from our financier back then that there were such financings (presumably part then as a private loan?!) where even the taxes came from the bank as a loan... of course, that no longer works currently

725,000 is the purchase price? It should actually work out well if you only need to borrow about ~80% of that

The 725,000€ is everything together, so land price + house construction costs + incidental building costs.

And how can the bank then only value it at 500k if you build instead of buy?

I'm confused... is someone building that for you or are you doing everything yourselves?

And how can the bank then only estimate the value at 500k if you are building instead of buying? I'm confused... is someone else building that for you or are you managing everything yourselves?

A general contractor is building the house for us. I think the bank looks at the resale value and unfortunately it is low in this area.

And the financial advisor doesn’t inquire at your local bank? Mine did. Besides, it is in his interest to arrange financing for you.

He ultimately only uses a tool to request terms.
Proper inquiries to a bank should only be made after approval by the builder and the local bank may not even be included in the tool.

And how can the bank then value it at only 500k if you are building instead of buying?

I’m confused... is someone building this for you or are you doing everything yourselves?

This happens, for example, if the bank values the plot using the standard land value and this lags behind the actual price development. Or if the building is valued as too expensive, for example because value-enhancing features are not known.
It is generally a problem to put an expensive, high-quality house out in the middle of nowhere. You also have to accept that the house will be like a new car – losing 30% of its value upon moving in.

But: Just go to the next bank. It can happen.
For example, we were rejected by HVB back then because there was a right of way according to the notarized purchase contract at the property boundary, so a strip of ~50cm was declared a protection strip. That was somehow too risky for them. Well, then not.

A general contractor is building the house for us. I think the bank looks at the resale value, and unfortunately, it is low in this area.

So your bank means you’re not allowed to build a Beverly Hills house in the Bronx???