A new build is hardly sellable at the full cost price after 1-2 years, especially when there are still free plots next door. The additional costs (especially the real estate transfer tax of 6.5%) are simply too high. On top of that, there would be the prepayment penalties. Since even the simplest houses without much fuss cannot be built for less than €320,000, they would have to get at least €350,000 with prepayment penalties and co. You can easily build new here in the area for that. So selling is not a real solution.
You can calculate/argue like that, but that was their risk when signing the contract. If I read between the lines correctly, they would break even +/- zero, only the previously invested equity would be lost. But that's always the case when you finance maximally and have to sell again after a short time. The risk only becomes visibly real in these cases.
The installment is not particularly high, according to statements under €1000. At this price, the property can also be rented out, but to what end? Hardly anyone rents a property long-term at a price where they could also pay off their own house. So there are frequent moves, which a house often cannot withstand.
Depends. Here in LP, there is always demand for rental houses due to some large employers and the university because people come here for 2-5 years and more or less know that afterwards they will work somewhere else again. There are also landlords who specifically buy such properties multiple times, renovate them, and operate them purely as rental units. So it also depends on whether there is a market for it...
He can easily pay for the house on his own; he earns enough. However, the banker simply rejected it without checking.
If I had the capital to easily pay for it and someone at the bank rejected that without checking, I would be back at the bank's secretary in 5 minutes requesting an appointment with his superior.
The current situation is that they are now trying an official examination at the bank with paperwork and so on, to get her released from the contract and for him to take over her half of the house. The €10,000 for property tax and notary are not the problem.
The €10,000 sounded to me so far as if that would indeed still be a problem, at least for one of them. What also doesn’t sound entirely plausible to me is the statement "he can easily pay" and the bank’s attitude. If you can easily pay, it would be settled within 5 minutes. The fact that the bank advisor sees it differently and paperwork is only just starting sounds to me as if it isn’t quite so easy to manage after all. The question is also … if it really is that easy to handle, why doesn’t he simply pay the full installment and buy her half?
Your argument that he would need €150,000 for that is actually not correct. The woman’s half is worth €150,000 minus (!!) the proportional loan amount, so more or less zero; otherwise, she would hardly agree to a purchase price of €1. In plain language, he effectively needs no equity to buy her share, except for notary and land register fees. The bank can hardly do anything against this except disallow the sale, which it would have to justify and would again only be able to do on account of his lack of creditworthiness.
This leads in circles; I believe if he really had the money, this would not be a problem at all.
It would be easier if one bites the bullet and sells at market price. After all, it is ready to move in immediately and practically new.
Best regards
Dirk Grafe