New single-family house - How to proceed with financing?

Hello everyone,

we plan to start building a single-family house on our building plot next year.
I have already spoken to several general contractors and arranged appointments.

What is the general process for signing the contract for work and the loan agreement?

So far, I have always assumed:
1. Final offer
2. Request loan with offer and cost breakdown from the general contractor for incidental construction costs
3. Sign the loan agreement
4. Accept the offer and sign the contract for work

With the 2-week cancellation period, it can certainly partially overlap and be optimized timewise.

After a phone call with a general contractor, the following general procedure was explained to me:
1. Final offer
2. Accept the offer and sign the contract for work; the contract contains a termination clause in case the loan does not come through
3. Request loan with the offer and the necessary documents? from the general contractor
4. Sign the loan agreement

How was it for you, how do you see it?

I had always assumed: 1. Final offer 2. Request loan with offer and cost breakdown from the general contractor for ancillary building costs 3. Sign loan 4. Accept offer and sign the contract

We had 1 2 4 3 It was also more practical in that the bank almost immediately had all documents. I would definitely not run to the banks first with the signed construction contract. For us, that cost 2 months (?) of parallel work with Interhyp, an independent financial advisor, and several local banks and savings banks – in some cases only inquiring by phone and immediately dismissed.

I had informed myself about the topic of conditions in the contract for work and if so, you have to have it drawn up by a lawyer. Otherwise, it may happen that it has no legal validity.

The wording is also very important. For example, if it says “[falls keine Finanzierungsbestätigung zustande kommt],” he could get you one with bad interest rates through a partner and the condition would be fulfilled.

There are also two variants: right of withdrawal (§346-350 Baugesetzbuch) and suspensive effect (§158 Baugesetzbuch). With the right of withdrawal, it is said that if the financing does not come through, you can withdraw. This means that at that point a valid contract has been concluded and you may have to pay for services and expenses already incurred.
With the suspensive effect, the contract only comes into effect when the conditions (financing) are fulfilled. Thus, there is no legally valid contract and no withdrawal is necessary.

Personally, I would never conclude a contract worth several hundred thousand euros without valid financing. We told the general contractor he has to wait that long. Of course, he does nothing beforehand either, but that is also okay.

Most unscrupulous providers will try to make a contract as quickly as possible.

In principle, you should already know what construction budget you have and will receive. You don’t always get what you think you will. You don’t always have enough of what you think you need. Therefore: already be open now and discuss equity, salary, and desired installment with the bank. Also, do not overlook the desire to have children. Only then will you know how much house you can plan.

Hello everyone,

we plan to start building a detached house on our building plot next year.
I have already spoken to several general contractors (GC) and arranged appointments.

What is the general procedure for signing the contract for work and the loan agreement?

So far, I have always assumed:
1. Final offer
2. Request loan with offer and cost breakdown from the GC for incidental building costs
3. Sign loan agreement
4. Accept offer and sign contract for work

With the 2-week cancellation period, it can certainly sometimes overlap and be optimized in terms of timing.

After the call with a GC, I was explained the following general procedure:
1. Final offer
2. Accept offer and sign contract for work, contract includes a cancellation clause in case no loan is granted
2. Request loan with offer and necessary documents? from the GC
3. Sign loan agreement

How was it for you, how do you see it?

Our GC explicitly advertises that documents for financing are provided in advance.
In the end, the bank wanted to see more than what they normally provide, but these documents were also provided to me in advance, without a signed contract.
We then signed in the end before the financing was finalized (it took longer for us because my husband is a foreigner), but we had a clause in the contract "Subject to: financing," so if we really could not secure financing, we could have dissolved the contract. Of course, no work began at the GC until we had lifted this clause in writing. We did that when signing the loan agreements. We only signed the contract earlier (with the reservation) because a price increase at the GC was imminent, which was to be avoided.

We will first make a planning contract so that the building application is submitted. Costs are 5% of the house costs. These will be deducted from the construction contract. And while the [Baugwnehmigungszeit] (approx. 6 months) is running, we take care of the construction contract and the financing.