Follow-up financing experiences. What has this brought upon you?

Well, borrow 500k and pay the cheeky but still usual 0.25% per month = €1250. It shouldn't be too hard these days to reach these amounts. Plus a thousand for rent. But why write off so much money just like that ... wouldn't be my approach either.

Then you let yourselves be blackmailed for 7k instead of simply banning the company from the site and threatening damages claims. For your shell builder, the whole thing was a great deal. You get bids issued with validity until the start of construction; otherwise, it’s normal procedure for companies to raise prices after the binding period expires. In total, you’ve messed up quite a bit, and the new (tiny) car for the house will probably no longer be possible in the end.

Thanks, that really makes me feel much better. [emoji1319] That’s what I appreciate about this forum: there’s always a smart aleck who knows better than all the involved architects, lawyers, etc. – after all, they’re all just idiots here. Banning from the site, claiming damages [emoji23][emoji23][emoji23] YMMD. Well roared, lion!

Unfortunately, reality looks a bit different. Don’t watch so much Suits, Boston Legal, or Ally McBeal and think that has anything to do with reality.

What are you even talking about when you mention binding periods, bids, price increases, and (tiny) cars? Please first look up what a change order is, and how these are to be handled according to the VOB before giving hasty advice. The contract was concluded in November of last year, the offer was tendered via the specification, the specification is pending. The contractor still has the option at any time to submit change orders for items he believes are not covered by the specification or in case of increases. The architect must react to this and review their legitimacy, rejecting if necessary. Until a response from the architect arrives, the contractor may suspend work. Doesn’t matter whether justified or not. He can thus stall indefinitely, repeating this for other items arbitrarily. And then you come with banning from the site and your wisdom [emoji23]. Construction delay notices come before you can say the word, resulting in unilateral termination of the construction contract, with damage claims against you. Doesn’t matter whether he gets them or not. You must first respond, pursue the legal dispute, and face a construction site that doesn’t progress even a millimeter because of it. Usually, these procedures end in settlement, even if Mike Ross and Harvey Specter like to show you otherwise on TV. Sorry, with so much naivety combined with know-it-all attitude, I really lose my composure.

That we were blackmailed, I know myself. But thanks for rubbing it in my face again. Otherwise, I wouldn’t have noticed *facePalm*

Ultimately, it was a fairly rational decision: continue exposing yourself to the stress and delaying games, or draw a line under it, write off the money, and realize that having the right and getting the right are two different things. Get up, wipe your mouth, straighten your crown, move on. Even if some smart remarks come from the comfort of the couch with a phone in hand.

But as the saying goes: those who have the damage need not worry about the ridicule.

Serious question at the end: what was the intention of your post?

P.S.: 6 months delay in shell construction means paying rent for 6 months longer. Look at the rental index around Nuremberg. Please look up provision interest if you don’t know what that is. You can’t draw down the loan; you pay for that. The rest is arithmetic.

Still, all the best for your building project. I wish you not to get into a similar situation, not so much because it might disillusion you, but because it simply wears you down and costs nerves – and I wish that on no one, not even anyone who greets me with malice.

Brief addition: actually I can agree with many of your posts and often find them very valuable. But this one really annoyed me because it just seemed condescending, sarcastic, and not very constructive. I actually lack understanding for that, hence my reaction, which admittedly is not an expression of calmness either [emoji6]

Well, borrow 500k and pay the cheeky but still usual 0.25% per month = €1250. These amounts shouldn’t be too hard to reach nowadays. Plus a thousand for rent. But why someone would just write off such a large amount of money... wouldn’t be my approach either.

Well, what do you mean by cheeky. It’s not a secret of the bank but is always advertised. Of course, especially with new builds, it’s an issue that is often overlooked. The typical 6-12 months interest-free period used to be enough. During the construction boom, it looks worse. And sorry, anyone who has to pay back their full loan after the period has ended also planned poorly. By the way, the bank also has to manage and finance the money and hedge the interest rate risk and credit risk of the borrower.

Well, did say where his delay comes from, which has at most half to do with poor planning. 3% nominal per year commitment interest is common and therefore actually unavoidable, but fair is something else. Of course, the bank has to have compensation if it cannot lend the money elsewhere - that is how commitment interest was once meant to be understood. However, in times when interest rates themselves are well below 3%, the interest rate is cheeky and highway robbery.

Well, what do you mean by cheeky. It’s not a secret of the bank but is always advertised that way. Of course, especially with new construction, it’s an issue that is often overlooked. The typical 6-12 months interest-free period used to be enough. During the construction boom, it looks worse. And sorry, anyone who has to pay their full loan after the period has ended also planned wrong. By the way, the bank also has to allocate and finance the money and secure the interest rate risk and credit risk of the debtor

Cheeky, because this sentence still comes from times of a different interest rate level. 3% for availability is quite a statement. Many are down to 0.15-0.17.

Planned wrong ... nothing is planned wrong here. Before the shell construction, apart from the fees for engineers, it’s just small expenses due. At this point, there is simply still a lot of money in the (loan) account. It’s no different for us. Land was paid from equity and so far no additional 50k has been incurred, which has also been advanced from own funds and will only be reimbursed by the bank with the first payment request. Not a single euro has been drawn yet and the next step is the earthworks, if the building permit would finally arrive.