House purchase with occupancy 6 months later, payment plan

Hello everyone,

we are currently in purchase negotiations for a house that is about 30 years old.

In the course of these negotiations, the real estate agent told us that it is common to pay a larger portion (not specified) already 4-6 weeks after the notary appointment with the registration of the transfer of ownership in the land register. The rest is then paid upon vacancy.

To us, this sounds very strange and solely to our disadvantage since we are already paying interest and installments without receiving any service.

Using the existing equity will also be difficult, as we need it for a new kitchen, furniture, etc.

It is also strange that the real estate agent cannot give us an amount that is being targeted.

From the seller’s perspective, the argument is that they are building new and must make partial payments depending on the construction phase. Otherwise, an interim financing on the seller’s side would be necessary.

What pitfalls should be considered?
Is this really common practice or rather the exception?

Many thanks in advance,
Andreas

For us, that sounds very strange and purely to our disadvantage since we are already paying interest and principal without receiving any service.

Yes, it is strange and unusual. The usual practice is a fixed date (e.g., when the sellers move out) or directly at the beginning, and then the sellers pay you a usage fee (similar to rent). As you described it, for me, it's a no-go.

Customary or not. Perhaps as a buyer one should simply put oneself in the seller's situation. Obviously, he lives in the house himself. He has to vacate his house, maybe he is buying another property and needs the money.

Accordingly, the purchase contract can be designed. The buyer's interest costs can then be borne by the seller or the purchase price can be negotiated down accordingly. Of course, also a contractual penalty in case of late handover by the seller.

Everything can be contractually regulated in the mutual interest.
Apart from that, the purchase process will also take several months after the notarized contract. Usually about 3 months.

As I said, everything is a matter of negotiation with the seller. What the broker says doesn't really matter to you. The facts will be fixed in the notarized purchase contract.

Feels unusual. And I would therefore use it for the negotiation if it is not generally a no-go.

But since the broker starts off the negotiation like that, a little tip: If the purchase is agreed upon, I would take care of finding the notary myself - and not give the broker power of attorney to handle everything. Otherwise, a few disadvantageous clauses might suddenly end up in the draft contract that a layperson would not recognize as unusual.

Is this really common practice or rather the exception?

So, making a contract now with handover in a year or similar is common practice, as is the seller remaining in the house under a tenancy-like arrangement. There are several questions about this here in the forum – often regarded as unusual by those asking.

From the seller's perspective, the argument is that they are building new and have to make partial payments depending on the construction phase. Otherwise, an interim financing would be necessary on the seller’s side.

The approach of payment now at contract and later moving out can also be common. At least, that’s how we did it. We were the sellers, the buyers paid about 3/4 after the notarized contract, and we lived rent-free in the house for another 9 months. The proposal for this approach came from the buyer of our house. The purchase price was therefore reasonably lower from our side because we had advantages. It was a win-win situation. Ultimately, both parties must be satisfied with the arrangements, whatever they may be. If you have a problem with that, then communicate it. Either there is another arrangement or someone else buys the house. If there are no other interested buyers, then you might be lucky to buy the house under different conditions.

Depends on the amount in my opinion. Afaik, there is a risk that in the event of the seller's insolvency, you might end up losing part of your down payment. Generally, don’t listen to real estate agents, they talk a lot when the day is long.