Is a work contract due to price increase sensible before financing?

Hello dear home builders,

we have the following situation.
We are getting a plot of land in a development area that is currently being developed (approx. 100 parcels). The plot is expected to be released for construction from August 2022. We have our notary appointment next week to purchase the plot, part of which we will finance with a variable loan.

In the meantime, we have already started with the house planning and currently have an offer. We are wondering if it makes sense to sign the contract for work now? Due to the current situation, the provider says that prices will continue to rise and he will have to pass that on to us if we don’t sign within the next few days. Furthermore, it would not be advantageous for us to finalize financing now, since otherwise we would have to pay quite high commitment interest or an interest surcharge for a 2-year commitment period. On the other hand, we have the risk of rising interest rates if we wait until next year to arrange financing.
Is it at all common to arrange financing after signing the contract for work, when there is still so much time?
The whole thing is a bit of a dilemma. What would you recommend to us?
Many thanks!

Best regards
Thomas

Most of the time, this ominous price guarantee applies for a maximum of 12 months, if at all. So don’t let yourself be pressured by such stupid arguments. It is what it is, you are simply too early and almost no [GU] will guarantee you 18-month-old prices in the current situation.

Hi,

we can report firsthand that these work contracts don’t always work out as they should. We were also promised a price guarantee of 12 months. The only problem is that it is not clearly defined until exactly when this price guarantee applies. Check whether the price guarantee is valid until the start of planning/construction, etc., and confront your potential developer with this and, if necessary, document it in writing. If you sign now and can only start building in August 2022, the developer will impose a price increase on you anyway. If you don’t sign and have obtained several offers, you are at least in a stronger position during price negotiations of the respective offers. I am not an expert when it comes to construction costs, but at the moment construction costs are on a surge. Whether they will have risen further in half a year, I almost doubt. But I am happy to be proven wrong. Maybe it is just pure optimism speaking from me.