ᐅ Process for Purchase, Demolition, and New Construction + Is This Timeline Feasible?

Hello everyone,

I would like to get your opinion on the following situation, as I lack personal experience:

We want to build a new single-family house. For this, we have already purchased an existing (very old) house plus the land; we signed the purchase contract with the notary two weeks ago. No money has been transferred yet, and from everything I’ve read, the property registration in the land register will likely take several months.

At the same time, we have already signed a planning contract with a local general contractor and received initial plans for the new build. They indicated that due to high workload, the earliest possible construction start might be December 2021, which is absolutely fine with us.

Regarding financing, we have had preliminary discussions with Baufi24, Dr. Klein, and two regular banks. The feedback everywhere was essentially that financing should not be a problem due to sufficient equity / land charge from the purchase of the old house and land, but without an approved construction contract/plan, there is naturally no loan yet (I am no longer completely sure about the exact wording).

I now have the following questions (possibly basic due to lack of experience):

• How exactly does the land charge (Grundschuld) work for financing? The purchase price was about €230,000 (230 k€), which we paid in cash thanks to an early inheritance. The new build will cost approximately €520,000 (520 k€) in total, including additional construction costs, so about €750,000 (750 k€) overall. We would like to register the €230,000 (230 k€) as equity/land charge for financing the remaining €520,000 (520 k€). Is this possible even though the old house will be demolished? In theory, the bank could also say: “You have eliminated the value of the old house, so we only recognize the value of the land, and therefore not €230,000 (230 k€) but only €100,000 (100 k€).”
• The planned timeline from our side is roughly as follows, but I am unsure about the duration of the processes and would appreciate feedback:


• Signing with the notary – end of March
• Property registration transferred – max. 6 months later → end of September
• Demolition – ~October
• Finalize financing as soon as construction plan is approved and signed – ~October
• Construction start – ~December

Thank you very much in advance for your answers!

Do you have a company for interior demolition and demolition?

Yes, we already have a quote for the demolition (demolition + disposal) for about 30,000 euros. Two other demolition companies have also been contacted, and we are still waiting for their feedback.

And an appointment? That was our breaking point.
Take a look at the quote to see which pollutant classes are included in the disposal.

No fixed date yet, but the one with the concrete offer had no objection to scheduling the demolition around October. I spoke with the other two companies, and they told me there is still some time before then. Therefore, I hope the October timing will not be an issue.

The point about the pollutant classes is valid; this was not detailed in the one specific offer (which is from a somewhat distant paternal relative).

I am not an expert in this field.

But from what I understand, the bank determines the amount to be registered as a land charge in favor of the bank. This means the land registry will show the bank with a certain amount. If you can no longer repay the loan and the house is sold, the bank then has the right to receive this amount.

If a second bank is involved in the financing, a land charge will also be registered for the second bank.

I am not sure whether the bank recognizes the purchase price as equity. If the house is demolished, I assume that possibly only the land is recognized as equity.