Negotiate performance description and construction financing

Hello everyone,

we have decided to build a semi-detached house. We have spoken to the agent for the plot and have reserved it. We have also spoken to the local builder and received an offer.

At the moment, everything is somehow moving very fast. We have just found the right builder and are currently having the scope of services and contract reviewed by an independent expert, and our financial advisor is preparing everything for the bank. We are wondering whether we should ask our financial advisor to slow down a bit until the expert’s report on our house plans is available or if this can continue in parallel. After all, it could be that additional costs may arise, and we do not know whether the bank will simply accept our estimated buffer of 25K euros... What do you think about that?

[INDENT]Framework: total costs 335K, equity 100K, security 17K (not included) and our desired financing sum would be 260K
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Best regards,
FamPre

what is a financial advisor? Does she cost money or is it just the woman, a relative or something like that?!

without any data, no one can tell you if your 260K loan is enough or not. 100K equity is already good, 260K loan on top is a reasonable amount. it will be about 1000€ installment per month (of course, more is always possible).

you should first read about what costs arise during construction. for a semi-detached house you also need a future neighbor who wants to build together. all information can be found online.

having the offer checked by an expert is reasonable, but the very first one?! you haven’t signed anything yet?!

it seems to me that you don’t know anything about building at all yet, but already want to go all in. start small first. is your plot even approved for a semi-detached house? is the size enough, can the plot be divided, does the development plan even allow it? have you agreed with your building partner/neighbor (do you even have one?) which house type and size it will be?! is this house type approved in the development plan?

once that is clarified, you can slowly look at what specifications you actually want. as public servants you should actually already know such things...

Hello everyone,

this is not our first offer and we have already seen many others. The plots are explicitly intended for semi-detached houses. The semi-detached house is also approved according to the development plan. That's not what this is about, as it is purely about the topic of financing here.

The buffer should be accepted by the bank. But look at it this way: You could take the 25K€ as a buffer from your own capital (then with 75K€ equity investment at total costs of 335K€ you would still have <80% loan-to-value). Your "financial advisor" should actually advise you accordingly. Maybe you should better also additionally consult one or two "financing advisors" specializing in construction financing. You should not have any financing offers ready for signature prepared until you have a good feeling for the total costs. Inquiry about conditions or determining a possible financing framework is reasonable. A good advisor should be able to explain all this to you. To get a good feeling for the total costs you can expect, the forum here offers plenty of reading material.

We received a buffer at no additional cost in our financing. It was not an issue at all and did not play any role in the loan collateral.