Financing options for acquiring grandfather's house

That can also go terribly wrong. I know a case where someone suddenly needed money for financing 5 years after a privately agreed arrangement, and then there was a dispute because the house was divided well below its value. I would always officially arrange something like that, just like with any external business partner. Emotions and large sums are always tricky.

Yes, but that kind of thing only ever happens to other people. Within one's own family - never! :)

When money is involved, friendship always ends, so always make everything legally watertight/documented.

Yes, something like that always only happens to others. Within one’s own family - never! :) When money is involved, friendship always ends, so always make everything legally watertight/documented.

For that reason, I would also handle the pure purchase price in the usual way. So take out a loan and pay out siblings and father. If your father then lends you this money at a favorable rate to pay for renovation work, then that is another matter. First of all, you need factual numbers. I would definitely do the electrical work in any case.

I thought it was redundant to mention that such a procedure is, of course, watertight documented with a notarial contract.

Apart from that, there are more than enough examples where friendship does not end over money. However, one only hears/reads about the negative cases.
It is the same as with renting. On the internet, everyone always knows someone who has problems or had problems with rent dodgers, etc. But these are only a few thousand per year. The many millions of positive cases are often ignored.

In our family, there was also a similar case, or rather, I actually have two in mind right now. Generally, it was settled by "determining the value, paying out the other parties." As far as I know, everything was also notarized and legally settled. To make the payout, a loan was taken out on the house to my knowledge (whether they took out more right away for a few renovation measures, I no longer remember). I don’t know all the arrangements of the second case, but I do know that no bank loan was taken out there, but it was contractually agreed that the "payout amount" would be paid off over time. (Ultimately, that is a kind of private loan agreement with the person to be paid out, I assume?). I don’t know the exact details here.

Otherwise, regarding renovation: According to the [Gebäudeenergiegesetz], there are certain renovation obligations when ownership changes to achieve a minimum standard. To my knowledge, these also apply when inherited or sold/gifted within the family. There are some who say, "If we have to do it anyway, then do it properly," but of course, you can also try to cover only the "bare minimum." However, in your place, I would read up on or seek advice on what minimum would be required of you.

I thought it was unnecessary to mention that such a procedure is of course airtight documented with a notarized contract.

Apart from that, there are more than enough examples where friendship does not end when money is involved. But you only hear/read about the negative cases. It’s the same as with renting. On the internet, everyone always knows someone who has had problems with rent dodgers, etc. But these are only a few thousand per year. The many millions of positive cases are often ignored.

A proper arrangement will at most cost you some money. An arrangement where someone might eventually feel disadvantaged costs you the relationship with a family member. And a lot of nerves. Your financial gain is always also the financial loss of the other party. "We could have sold the house back then and gotten sum X for it" can be the end of family peace. It would never be worth it to me.

Conversion of the heating system and bathrooms would probably be the most expensive, if at all possible (there is already underfloor heating on the ground floor). I also have no idea whether one should renew pipes, etc., in this context, because with a house from the 70s, it would be inevitable anyway.

Underfloor heating is quite good already; you can quite easily switch to a heat pump if the building envelope is sufficiently good.
As for the water pipes, it depends on the material. If copper, I would replace them immediately due to copper corrosion. Electrical wiring... depends on how the house is currently equipped. If you have to open up the walls anyway because of the water pipes, I would at least seriously consider it.