Process of property purchase/financing

Hello everyone,

what is the exact process when buying a property up to moving in.

1. Find / reserve land

2. Find a construction company

3. Bank / financing
3.1 What does the bank need from us now? Only estimated construction costs, offer from the construction company, or already a contract with the construction company?
3.2 Then comes an approval from the bank, right?

4. Notary appointment?

5. Land costs shared between us and the bank

6. Entry of the bank into the land register

7. Start of construction and repeatedly borrowing from the bank to pay the construction company?

Best regards
Marko

Correct, first of all, you naturally need your plot of land. You either purchase it with your own funds or through financing from the bank. If it is to be financed, the bank will register a land charge on the property as security; as a rule, a sufficiently high land charge for the entire house financing will be registered. This must be entered into the land register by the notary (simplified). For the purchase of the plot itself, you naturally also have to go to the notary, who certifies the transfer of ownership and registers you as the new owners in the land register. If you are also financing the plot, you should of course arrange financing beforehand; otherwise, only once you know when your construction project will be realized. The loan is provided by the bank, and you can draw it down partially or all at once according to the invoices, whereby interest only has to be paid on the amount drawn down. However, the bank will never become the owner of the property; it only holds the first priority with its land charge, i.e., if you do not pay, it will have a corresponding clause inserted for immediate enforcement of the land charge (of course, it will not be realized immediately, but theoretically, it would be possible). You remain the owner until the sale or enforcement, which we certainly hope won’t happen. If you have any further questions, just get in touch. Best regards

We have reserved a plot of land and the plan is to get construction financing for both the property and the land. So, if I understand you correctly, the next thing we need is a construction cost plan. Then to the bank or Interhyp/Dr. Klein and the like. After that, the bank will tell us what other documentation they require and if approved, we will make an appointment with the notary.

Absolutely correct.

At what point do you actually secure the bank interest rate?
When I have the construction cost plan?
When I have the contract with the construction company?
When I have the building permit?

We have reserved the [property] until the end of June. What all has to happen by then.

Oh man, this topic is complicated :)

At what point does one actually secure the bank interest rate?

at the time of signing the contract with the financing bank.