Hello,
I have the following problem. The company we want to build with (let’s call it Stadt und Land) gave me a financing offer two weeks ago (10-year term) and then submitted an application to Ing-Diba. We also plan to take out two KfW loans totaling €50,000.
Now, this week I received a much better offer with a similar interest rate but for a 30-year term through my insurance company.
My problem is that the building planner naturally sees his commission at risk and insists on receiving it (he is very firm about this). So, he initially sent me two alternative offers from Ing-Diba, but they only have a fixed interest rate period of 15 years (Ing-Diba does not offer longer).
Just now, he called me and said he could arrange the same offer as the insurance company (also through the insurance) and thinks it is only fair that he gets the contract since he has put so much work into it.
Here’s the catch! Since the KfW loans were approved for Ing-Diba, we have to apply for switching banks with KfW (the fact that these funds can only be assigned once and are then blocked for 6 months was not mentioned by the guy).
The building planner told me on the phone that we have no choice but to sign the contract with him because we need his signature to access the KfW funds or to transfer them to another contract.
It feels a bit like blackmail. I now suspect that if I do not sign the contract with him, we will only encounter more problems during the construction, and I have a really bad feeling about this right now.
Wouldn’t it be fairer to award the contract to the person who first gave me the best offer?
Should we perhaps look for another building company? Maybe even an architect?
I’m a bit at a loss and have completely lost motivation for building by now, but I’m really glad that we haven’t signed anything yet (construction contract, etc.), only a power of attorney for the bank.
I hope someone can help me out. ((
I have the following problem. The company we want to build with (let’s call it Stadt und Land) gave me a financing offer two weeks ago (10-year term) and then submitted an application to Ing-Diba. We also plan to take out two KfW loans totaling €50,000.
Now, this week I received a much better offer with a similar interest rate but for a 30-year term through my insurance company.
My problem is that the building planner naturally sees his commission at risk and insists on receiving it (he is very firm about this). So, he initially sent me two alternative offers from Ing-Diba, but they only have a fixed interest rate period of 15 years (Ing-Diba does not offer longer).
Just now, he called me and said he could arrange the same offer as the insurance company (also through the insurance) and thinks it is only fair that he gets the contract since he has put so much work into it.
Here’s the catch! Since the KfW loans were approved for Ing-Diba, we have to apply for switching banks with KfW (the fact that these funds can only be assigned once and are then blocked for 6 months was not mentioned by the guy).
The building planner told me on the phone that we have no choice but to sign the contract with him because we need his signature to access the KfW funds or to transfer them to another contract.
It feels a bit like blackmail. I now suspect that if I do not sign the contract with him, we will only encounter more problems during the construction, and I have a really bad feeling about this right now.
Wouldn’t it be fairer to award the contract to the person who first gave me the best offer?
Should we perhaps look for another building company? Maybe even an architect?
I’m a bit at a loss and have completely lost motivation for building by now, but I’m really glad that we haven’t signed anything yet (construction contract, etc.), only a power of attorney for the bank.
I hope someone can help me out. ((
D
Doc.Schnaggls9 May 2014 13:52Hello Baschti,
Do I understand correctly that the, let’s say, seller of Stadt and Land is also acting as the broker for the financing?
And this friendly person is now basically putting a gun to your head?
Unbelievable...
If I were you, I would document this situation in writing and forward it to the relevant Federal Financial Supervisory Authority for review.
I am a banker myself, but I have never experienced such an outrageous behavior (very close to blackmail...) towards a potential customer.
The compliance department at Ing. Ing-Diba would surely be very interested in this matter as well.
If I were you, I would seriously consider whether this person is the right partner for probably the biggest investment of your life...
In my case, that would be the end of the line after such an incident!
Best regards,
Dirk
Do I understand correctly that the, let’s say, seller of Stadt and Land is also acting as the broker for the financing?
And this friendly person is now basically putting a gun to your head?
Unbelievable...
If I were you, I would document this situation in writing and forward it to the relevant Federal Financial Supervisory Authority for review.
I am a banker myself, but I have never experienced such an outrageous behavior (very close to blackmail...) towards a potential customer.
The compliance department at Ing. Ing-Diba would surely be very interested in this matter as well.
If I were you, I would seriously consider whether this person is the right partner for probably the biggest investment of your life...
In my case, that would be the end of the line after such an incident!
Best regards,
Dirk
W
wadenkneifer9 May 2014 14:12Hello,
this all sounds really unbelievable.
I have a few questions though:
- Has the construction contract been signed? Is there a termination clause? Oops, I didn’t read that part about the contract. What does the bank authorization include?
- Have you submitted a request to Ing-Diba so far, or have you already signed a loan agreement?
- If the loan agreement has not yet been signed: how could Ing-Diba have already "blocked" the KfW funds?
Other than that, I can only agree with Dirk.
Best regards
Michael
this all sounds really unbelievable.
I have a few questions though:
- Has the construction contract been signed? Is there a termination clause? Oops, I didn’t read that part about the contract. What does the bank authorization include?
- Have you submitted a request to Ing-Diba so far, or have you already signed a loan agreement?
- If the loan agreement has not yet been signed: how could Ing-Diba have already "blocked" the KfW funds?
Other than that, I can only agree with Dirk.
Best regards
Michael
B
Bauexperte9 May 2014 14:27Hello Baschti,
I’ve been waiting for a post like this for a long time. I could share many similar examples on this topic. However, such examples would probably be seen as unfair criticism of competitors; that’s why I generally avoid discussing my experiences in this sensitive area.
Dirk has outlined the right steps for you; what you do with his advice is entirely up to you. The same goes for whether you decide to sign the construction contract.
Based on your experience, it becomes very clear why going for something cheap often ends up being very expensive. Only the timing of this realization comes quite early. I would say, unexpectedly, you have luck on your side.
Regards, Bauexperte
I’ve been waiting for a post like this for a long time. I could share many similar examples on this topic. However, such examples would probably be seen as unfair criticism of competitors; that’s why I generally avoid discussing my experiences in this sensitive area.
Dirk has outlined the right steps for you; what you do with his advice is entirely up to you. The same goes for whether you decide to sign the construction contract.
Based on your experience, it becomes very clear why going for something cheap often ends up being very expensive. Only the timing of this realization comes quite early. I would say, unexpectedly, you have luck on your side.
Regards, Bauexperte
baschti schrieb:
Hello,
I have the following problem. The company we want to build with (let’s call it City and Country) gave me a financing offer two weeks ago (10-year term) and then submitted a request to Ing-Diba. They also want to include 2x KFW funds amounting to 50,000€ (about 54,000 USD).
But here comes the hard part! Since the KFW funds were allocated to Ing-Diba, we now have to request a bank change at KFW (the fact that the funds can only be assigned once and are then blocked for 6 months was never mentioned by the guy).
The building planner told me on the phone that we can’t avoid signing the contract with him anyway, because we need his signature to access the KFW funds or to transfer them to the other contract.
Should we maybe look for another construction company? Possibly even an architect?
I am a bit at a loss right now and have pretty much lost interest in building, but I am really glad we haven’t signed anything yet (construction contract etc.), only a power of attorney for the bank.Hi,
If I understand correctly, you have NOT signed a construction contract yet. Also, as you say, so far you only have an OFFER from Ing-Diba—nothing signed. Is that correct?
If that’s the case, you are completely free to decide and can still choose your building partner and financer yourself. The advisor is probably just trying to put pressure on you so he doesn’t lose his “additional commission,” as you already mentioned.
Have you signed anything with Ing-Diba yet? If so, you should have received documents confirming approval. Upon receiving these documents, to my knowledge, you have a limited right of withdrawal (in our bank, it was two weeks).
If you have received these documents, I recommend calling KFW about the possible blocking of the funds. My gut feeling says the advisor is misleading you here.
Regardless, I wonder if you want to continue working with this advisor. Try searching via Google for the City & Country website (if you want to stay with them) and look for advisors near you (or something similar). There is probably more than one in your area.
By the way, I’d recommend not rushing anything. Invest the money to have the building specification reviewed so you know what potential additional costs may arise.
For example, when we were looking for a building partner, we spoke with seven companies. Back then, we were still planning a basement. City and Country budgeted 2,000€ (about 2,150 USD) for removal and disposal of the excavated soil. All other providers, without knowing this figure, told us that costs would be between 15,000 and 25,000€ (about 16,100 to 26,850 USD). Ultimately, this meant City and Country alone faced a serious risk of additional financing needs. The advisor’s casual comment: “I always assume 2,000.”
Doc.Schnaggls schrieb:
Hello baschti,
am I understanding correctly that the seller, let’s say Stadt und Land, is also acting as the intermediary for the financing?
And this nice person is now really putting you under that much pressure?
Unbelievable...
If I were in your position, I would document this situation in writing and then forward it to the relevant Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) for review.
I work in banking myself, but I have never experienced such a gross disrespect (very close to blackmail...) towards a potential customer.
The compliance department at Ing-DiBa would surely be very interested in this issue as well.
If I were you, I would seriously consider whether this person is the right partner for probably the biggest investment of your life...
For me, after such an action, that person would be out!
Regards,
DirkYes, that’s pretty much how I feel right now… I think I’ll sleep on it and then decide, and maybe also get another offer from an architect because we actually want to build the house as it is. Whether the mortgage insurance (BU) will be with them is, in my opinion, still very uncertain.
Do you really think I should take such drastic steps? In the end, I can’t really prove anything since everything happened over the phone...
wadenkneifer schrieb:
Hello,
this all really sounds incredible.
I do have a few questions though:
- Has the construction contract been signed? Is there a termination clause? Oops, I didn’t catch anything about the contract. What does the bank authorization cover?
- Have you submitted an application to Ing-DiBa so far or already signed a loan agreement?
- If the loan agreement hasn’t been signed yet: how could Ing-DiBa have already “blocked” the KfW funds?
Otherwise, I can only agree with Dirk.
Best regards,
MichaelNo, I wanted to sign with Stadt und Land at the second meeting, but I blocked that immediately… so far everything is only planned, nothing signed.
No, we only submitted a loan inquiry and have commissioned their representative to do so (which seems to be standard practice at Stadt und Land), but apparently Ing-DiBa submitted a request to KfW directly, though we assumed this was non-binding… well, hindsight is always 20/20…
Bauexperte schrieb:
Hello baschti,
I’ve been waiting for a post like this for a long time. I could describe many similar examples on this topic. However, such examples might be seen as unjustified criticism of competitors; therefore, I generally avoid sharing my experiences in this sensitive area.
Dirk has shown you the right steps; what you do with his recommendation is entirely up to you. Likewise, whether or not you sign the construction contract.
Your experience clearly illustrates why “cheap in the end always means expensive.” The only difference is that the realization comes quite early. I think, unexpectedly, luck is on your side here.
Best regards, BauexperteBauexperte, what do you mean by “cheap in the end always means expensive”?
Many thanks for all the answers. I need some time to digest this shock. Just now, my insurance agent—or rather, his finance employee—called me. The employee from Stadt und Land actually passed on the insurance offer I had sent by email directly, without any changes, to an insurance field agent (talk about banking secrecy and data protection!), and wanted the same terms and the commission... The field agent then called my insurance agent, who in turn called the Stadt und Land employee and made it clear that he can forget about getting the same conditions as the insurer itself… moreover, it’s outrageous to use such methods.
I really don’t know what to do anymore... Maybe this is all standard practice in the industry, I don’t know...