New rate twice as high - experiences

@TE: Has the notary appointment for the condo already been scheduled, or are you absolutely sure that it will go smoothly? An approval unfortunately doesn't always mean that the contract will be finalized in the end, especially since many financings are currently being rejected. Therefore, for me personally, it would be much more comfortable if there were at least other bids for the condo in the background that one could fall back on.

Especially if the financing is rather tight, e.g. €50k less sales proceeds (if you have to start looking again) can indeed become critical.

We sold a house to finance the renovation of another - we only gave the architect the order once the notary contract was signed.

Notary appointments for the purchase of the single-family house and sale of the condo are on the same day. The buyer's bank approval is in place. The draft of the notary contract is available. We "know" the buyers. It should go smoothly. It's basically the same principle as with us and the single-family house. The buyers ABSOLUTELY want to move to this area and ABSOLUTELY want our condo. Their house is already sold. They are solidly positioned and only need to borrow a small amount for our condo. I have absolutely no worries about that.

Hello How did your story end? Did you follow through with everything? What’s the next step now?

I will reply in detail later, I am currently on the move. We are buying the house, the notary appointment is at the beginning of December. It had to be postponed because the banks are taking an extremely long time. The apartment will be sold at the same time.

So. I still owe all readers and interested parties here some feedback.
I’ll try to keep it as brief as possible. Basically, I could write a book about this whole story. Since the end of August (the first viewing) the topic has dragged on:

A quick reminder of the framework conditions:

[*]For us the almost perfect house in the perfect location. Single-family house built in 1987 with 540m² plot
[*]Purchase price €540,000 plus incidental costs
[*]ETW sale for €500,000

Viewings were carried out etc. Talked to my bank guy (he’s an independent, who already arranged financing for us when we bought the ETW in 2018). Everything was set in motion.
Then all the drama began. Something was missing here, something there. Corona, home office, the banks need lots of weeks to process applications. Mortgage swap is another department, so longer processing times, etc., etc. Meanwhile, vacations on our side and vacations on the seller’s side etc. Notary appointments had to be postponed twice, etc.
In between, the whole thing went the other way around from us towards the buyer of the ETW. Incredible stress.

For us it was clear: we only sell if we also buy. That’s not always the rule. But with a wife and a 3-year-old child I’m not going to take the risk of selling our ETW but then not finding anything new.
The risk to buy and then still have to sell the ETW to someone else was something we consciously accepted. Although it was made very clear that “WE WILL DEFINITELY BUY THE APARTMENT.”

Accordingly, everything went back and forth. Meanwhile, the house was not bought twice. Conditions had changed. More equity was required, etc. Somehow it worked itself out again.

At that time it looked financially like this:
€2415 rate – a lot of money. But it would have fit. Financing was already approved – subject to the appraisal – someone had to go out and inspect the house. Notary appointment(s) were set.

Call from the bank advisor (I’ll abbreviate).
The house was appraised at €460,000 because the bank factored in a 15-20% safety discount (given the current situation). The bank would give us a maximum of €487,000 credit. Financing had previously been calculated for €581,000 including renovation etc.
So topic over. That was it. Got excited for nothing. Wife devastated. It begins again. “No more desire for the apartment,” “I was already so happy,” etc. Women, right :)

Well, called the realtor, explained the situation. The house cannot be purchased.
Next morning, realtor calls back: “I’m talking with the owners and explaining the situation.” HALF AN HOUR later, realtor call: “You can buy the house for €480,000.”
Unbelievable. Called the bank people. Also somewhat incredulous “WHAT?!” Financing adjusted to the max of the bank, so €487,000. New rate €1915 – €500 less per month.
Compared to the previous scenario theoretically about €20,000 is missing that we had planned for renovation. We’ll see about that. We still have an equity buffer we can tap if something is missing. But €500 less per month is a serious difference.

Monday was the notary appointment for the purchase of the house. Yesterday for the sale of the ETW. Everything wrapped up.

For us a rollercoaster of emotions and an extremely tough time. My wife and I have quarreled so often. The mood also often spilled over to the child so the little mouse was a bit affected too. Really tough.
But here the saying applies: All’s well that ends well.

My bank advisor also said: The “bad” appraisal was the best thing that could have happened to you. Because the value in the appraisal is only due to the bank’s “cautious” stance because of the current situation.

If you calculate with the €2415 and know it will still work out well (the ETF savings installments of €400 drop out otherwise everything stays the same) and then suddenly have €500 less cost per month that’s really something.

We really couldn’t believe it. The €540,000 was definitely too much for the house, yes. But we would have paid it because it would have been worth it to us.
Now we pay almost €70,000 less for the house including incidental costs and pay €162,000 less over 27 years. In total we therefore save a little over €230,000. Incredible.

We are now really looking forward to the new stage of life. Some things have to be done but we are also looking forward to that.
“My” craftsmen all have time in January and February so the renovation/modernization should be no problem by 3/1.

A new kitchen is already ordered (we had the clause written in the contract that we can withdraw from the purchase free of charge if the house is not purchased). Many other things are already planned and partially bought.

Now it can start :)

Sorry for the long text. But as you can see for yourself, a lot has happened. Putting it all into words is just difficult :)

Now I’m curious about your comments :)

Best regards

Congratulations, that sounds great!

So first of all, congratulations. In these times, you just have to focus on the little personal happiness. Thank you for the update!

You can definitely see that the market has already changed due to the interest rates. The sellers probably had to realize that the moon prices from before the crisis cannot be maintained.