House move - How to plan interim financing?

Tip: I don’t know where in Cologne, but 450,000€ for 130 sqm terraced house (like new, top energy rating) at 1,000€ per sqm seems very low to me. Even though real estate prices are sometimes falling, I would still go into negotiations with 595,000€. Because at least here, the same prices as in 2022 are still demanded and apparently paid for like-new properties (from 2010). Such properties are currently very popular due to the slump in new construction. So definitely go in at 595k and let yourself be negotiated down to 550k if necessary. But always start higher. You could also find someone for 600k.

I think you misunderstood. The new house is supposed to cost 450,000€. We also expect our current house to be worth about 550,000€.

Regarding the cats, this is our decision and it is final. An interim move is out of the question.

Wow... if it were about children, people would probably say, "Well, they just have to accept it, they will find new friends, that's life..." I grew up with cats... during vacation someone just put their bowl down for them, that was it. And if they didn’t come back from the forest during hunting season... you just got a new cat... no one would think of getting a psychologist if the cat had to move...

There are simply people for whom their animals are more than just an object that you can easily replace. Such an attitude is simply… PS: I also wouldn’t put children through a relocation in between. At least not once they are of school age.

Tip: I don’t know where in Cologne, but €450,000 for a 130 sqm terraced house (like new, top energy rating) at €1000 per sqm seems very low to me. Even though real estate prices are partly falling, I would still start negotiations at €595,000. At least in our area, the same prices as in 2022 are still being asked for and apparently paid for newer properties (from 2010 onwards). Such properties are currently very popular due to the slump in new construction. Therefore, definitely start at €595k and if necessary negotiate down to €550k. But always start higher. You could also find someone for €600k.

I would be a bit "careful" here, although there is no rush for now. Still, prices are rather falling in Cologne as well (see quarterly report, which is available on the GARS page of the expert committee).

The assumption that the asking price still equals the selling price is only partly valid. From direct experience, I can say that nowadays properties are mostly sold below the asking price, and sometimes significantly so. Overpriced properties also tend to stay on the market for a very long time. Of course, there are factors that can make a property more attractive again (energy standard, features regarding heating, etc., and also location). BUT you also have to realize that the potential buyer pool in this price segment becomes relatively small.

That may be true, but if real estate prices fall in the city, they also fall in the countryside, which is currently primarily due to the interest rate environment. At 4%, many can hardly finance a house for €500,000 anymore. However, I cannot observe declining prices at least in our residential area so far.

Nevertheless, the new house should also cost less for that reason, so that we have a safety buffer.

Called the bank today and unfortunately, there is first of all some sobering news.

For a bridge loan, the current interest rate would be over 7%!!! That is quite a lot and involves considerable risk. Basically, I see 3 options for us now:

1. Purchase through a bridge loan and then sell the old property
If we don’t manage to sell our house, the bridge loan will become a problem, it would eat up our equity and afterwards would hardly be financeable. At €450,000, about €32,000 interest per year would be due.

2. Sell first, but with the condition to stay in the house for a maximum of 2 more years.
This would avoid the bridge loan, but on the one hand, we would first have to find a buyer who agrees to these conditions, and then we would have 2 years to find a new house and if we’re unlucky and don’t find anything, the only option left would be to move into a rental, which we want to avoid. Also, the loan would then have to be completely repaid with the sale, so less equity overall.

3. Move into a rental house and sell afterwards.
That would at least be cheaper than the bridge loan, since rental houses in the countryside cost about €1000-1500 per month. We could live there for about a year or so and calmly sell the old house. Because of the cats, renting an apartment is not an option. Rental houses are, however, very rare and searching for one will likely prove difficult.

The bridge loan seems very risky to us at the moment and is really expensive. We also consider the second option risky, even though 2 years is a long time. At the moment, option 3 appeals to us the most, but honestly, we have little hope of finding a nice rental house.

Do you possibly have any other ideas?

So, in our rural area there are hardly any single-family houses for rent, but plenty of nearly new semi-detached houses for rent. There should be some of those where you are too, right?