ᐅ Procedures Followed by Banks When Purchasing an Existing Property
Created on: 9 Mar 2020 11:38
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Pinkiponk
I hope this topic fits within the forum; if not, the thread can be closed quickly.
Some of you may already know that we are planning to sell our current house to finance our new home. I have recently received some information from potential buyers that I find difficult to evaluate, and I’m surprised that banks apparently have such a strong influence on the purchase of an existing property.
Supposedly, the bank wants…
…a calculation of the living/usable area
…a detailed floor plan with measurements of all levels, cross-section drawings
…a visit from a bank employee or an appraiser (I’m not sure which)
The calculation of the living/usable area and the detailed floor plans of all levels are not allowed to be done by ourselves; this must be done by a professional company.
…Furthermore, the bank of one interested party, without having seen the house or being informed about renovations/refurbishments, without any information on equipment or features, estimated our house to be worth “xyz” euros.
Are you familiar with this as well? This “interference” by the bank in the contract negotiations or the requirements for the seller to provide documents to the bank are completely new to me. I only know it this way (as is the case with my husband and me): you disclose your salaries, income, savings accounts, insurances, etc., and then you either get the loan or you don’t. When we bought our house, we informed the lending bank about our salaries, and that was it. Which house we bought, with which square meters and rooms, was never of interest to them.
Thanks in advance for your replies.
Some of you may already know that we are planning to sell our current house to finance our new home. I have recently received some information from potential buyers that I find difficult to evaluate, and I’m surprised that banks apparently have such a strong influence on the purchase of an existing property.
Supposedly, the bank wants…
…a calculation of the living/usable area
…a detailed floor plan with measurements of all levels, cross-section drawings
…a visit from a bank employee or an appraiser (I’m not sure which)
The calculation of the living/usable area and the detailed floor plans of all levels are not allowed to be done by ourselves; this must be done by a professional company.
…Furthermore, the bank of one interested party, without having seen the house or being informed about renovations/refurbishments, without any information on equipment or features, estimated our house to be worth “xyz” euros.
Are you familiar with this as well? This “interference” by the bank in the contract negotiations or the requirements for the seller to provide documents to the bank are completely new to me. I only know it this way (as is the case with my husband and me): you disclose your salaries, income, savings accounts, insurances, etc., and then you either get the loan or you don’t. When we bought our house, we informed the lending bank about our salaries, and that was it. Which house we bought, with which square meters and rooms, was never of interest to them.
Thanks in advance for your replies.
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Pinkiponk9 Mar 2020 13:02Originally, we wanted to sell the house without a real estate agent. Now we are considering whether to hand it over to a bank or savings bank agent because, given the situation described above, the bankers could sort everything out among themselves. Perhaps their valuation would be more consistent internally, which might make the sale go more smoothly. What do you think?
Make a copy of the building file from the local authority. That way, you should have most of the documents ready, and then everyone can receive a digital copy. The buyers can then calculate the living area or other relevant information from the documents themselves.
Of course, you can also choose the buyer who causes the least trouble and doesn’t bother you with viewings.
In the end, however, supply and demand still apply, and it depends on whether you have enough interested parties. Request prompt (usually non-binding) financing confirmations from the banks of potential buyers. Whoever can provide this quickly without much fuss will be shortlisted.
You need to put pressure on the buyers, not the other way around.
Of course, you can also choose the buyer who causes the least trouble and doesn’t bother you with viewings.
In the end, however, supply and demand still apply, and it depends on whether you have enough interested parties. Request prompt (usually non-binding) financing confirmations from the banks of potential buyers. Whoever can provide this quickly without much fuss will be shortlisted.
You need to put pressure on the buyers, not the other way around.
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nordanney9 Mar 2020 13:17Pinkiponk schrieb:
What do you think?Do you know what the real estate agent will say? Dear client, I am happy to prepare a property brochure, but I still need the following documents from you... On top of that, depending on the federal state, you will also have to pay a significant brokerage fee. Moreover, they don’t coordinate this among themselves.
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Pinkiponk9 Mar 2020 13:37Great, thanks. I will do everything as you suggested. Except for applying pressure — these are all such kind, young people with adorable little babies and children. I want to relieve them as much as possible.
We sold my sister’s house last year. The prospective buyers were a financially stable, dual-income family.
After we had settled everything among ourselves, we received an email from the financing bank stating that a property inspection would still take place because there were no pictures of the bedrooms in the listing.
I asked the bank if I could simply provide the missing photos. The bank agreed, told me which pictures were needed, and we were able to resolve the issue.
The buyer told me that this is now common practice with banks due to new regulations, which basically require the property’s value to roughly match the bank’s lending value. This is a security measure for the bank.
Whether this is actually the case, those of us with banking experience will probably know.
After we had settled everything among ourselves, we received an email from the financing bank stating that a property inspection would still take place because there were no pictures of the bedrooms in the listing.
I asked the bank if I could simply provide the missing photos. The bank agreed, told me which pictures were needed, and we were able to resolve the issue.
The buyer told me that this is now common practice with banks due to new regulations, which basically require the property’s value to roughly match the bank’s lending value. This is a security measure for the bank.
Whether this is actually the case, those of us with banking experience will probably know.
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Pinkiponk9 Mar 2020 16:43Yaso2.0 schrieb:
The buyer told me that this is now the case with banks, because the new regulation requires that a house’s loan value roughly corresponds to the bank’s lending value as a form of collateral for the bank.
Whether this is actually true, I'm sure the bankers among us will know.However, the lending value is usually much lower than the market value, or is that wrong? Additionally, this means the bank effectively determines how much a seller can ask for their existing property without ever having seen it, right?Similar topics