Sequence financing, building permit for attic expansion

Dear forum,

this is a beginner’s question for which I have not yet found a solution in the forum or online. We want to buy a roof shell in Berlin and convert it into an apartment. These cost around 1000-1500 Euro/sqm in good locations, with construction costs of about 2000 Euro/sqm planned. The equity capital is not quite sufficient for the purchase costs of the shell.

What is a typical sequence to both secure the shell in a timely manner and provide the bank with enough information for financing?

My current understanding:

Viewing with an architect, rough design planning, and discussion with the building authority about what would be possible. This could be used to make a rough price estimate. If you now do the planning including the building permit, half a year will have passed and you cannot keep the seller waiting that long. On the other hand, without a building permit the risk is too high and the bank will probably not give a financing commitment.

Alternatively, roof shells with building permits are often offered. The approved plans usually do not correspond to our wishes. Can one get a loan with these approved plans and a rough cost estimate of the desired planning and then submit the new building permit and construction description before the disbursement of the construction costs? The disadvantage here is that the exact construction costs are not yet available at the time of applying for the funds.

Or is purchase/conversion only possible without using the existing planning if you can pay for the entire shell from equity capital?

I look forward to answers or hints where I can find more detailed information.

Thank you very much,

Tom

If I see it correctly, the same problem exists with land purchases. Does an interim financing (variable loan, mortgage on the roof frame with standard building permit as provided by the realtor) make sense, which is then replaced by an annuity loan for the land and construction after the new building permit and the detailed plans?

Hello,

I don't understand the problem. It is like a purchase + renovation. The purchase price is clear + the expansion. Here I cannot judge whether the banks will finance this 100%.

Basically, I would say, just so you have security, a proper cost estimate and not a rough one. What if the architect miscalculated by 30k during the detailed planning and you already have financing?

It is also advisable to ask your house bank what documents they require for your project.

Good luck